E.C.B. Stress Tests Seen as Bolstering Confidence in Banks

But applying the leverage ratio may reveal a yawning hole at European banks, according to an analysis by Sascha Steffen, an associate professor at ESMT European School of Management and Technology in Berlin, and Viral V. Acharya, a professor of economics at New York University. They first assumed European banks had to write off all the nonperforming loans that are not covered by reserves. Then they calculated how much equity capital the banks would then need so that their equity capital equaled 4 percent of total assets. In that situation, the banks in the sample would have a theoretical capital shortfall of nearly $350 billion.

Carl Icahn’s Bad Advice: Stock Buyback

Rather, he says, the critical incentive for buybacks has been that chief executives are paid primarily in stock. Share buybacks may remove capital from the company, but when they raise the stock price, they enrich the boss.

.. As for Apple, in the late 1980s and early 1990s, when John Sculley was chief executive, the company spent $1.8 billion buying back its own stock. That was money it could have really used when the company then stumbled and needed to issue junk bonds — and issue $150 million in convertible preferred stock to Microsoft — just to survive.

Enforcer at Treasury Is First Line of Attack Against ISIS

Mr. Cohen, a fastidious Yale Law School graduate who is known inside the White House as the administration’s “financial Batman,” is a first line of attack against the Islamic State. His title is under secretary for terrorism and financial intelligence and he may be more important in the fight against the Islamic State than the Tomahawks fired off American warships or the bombs dropped from F-16s. He has become a fixture in Mr. Obama’s Situation Room.

.. Before the Islamic State rose to prominence, Mr. Cohen was best known in the administration as the point man in shaping and carrying out a set of sanctions meant to cripple Iran’s economy and force its leaders into talks to halt its progress toward developing a nuclear weapon. “It’s safe to say that without David’s relentless efforts, we would not be where we are in terms of getting the Iranians to the negotiating table with the chance of reaching a diplomatic solution,” said Antony J. Blinken, the deputy national security adviser.

..  13 years ago Treasury’s intelligence operations consisted of a single person sitting in a cramped room churning out reports for senior officials. Today Mr. Cohen presides over a 700-person, $200 million-a-year counterterrorism office within Treasury that was created after the Sept. 11, 2001, attacks. He likes to point out that it includes the only in-house intelligence unit in any finance ministry in the world.

.. “I never dreamed of this job in particular because it didn’t exist,” Mr. Cohen, 51, said during the interview, conducted in his cavernous office at Treasury, next door to the White House. “But it is my dream job. I’m able to touch pretty much every single national security issue we’re facing.”