Posts filed under “Regulation”

S.E.C. Commissioner Stein’s Blistering Remarks

Remarks Before the Peterson Institute of International Economics

Commissioner Kara M. Stein

Washington, D.C.

June 12, 2014

Thank you, Adam, for the kind introduction.  I also would like to thank the Peterson Institute for International Economics for hosting me today.

I, like all of you in this room, believe we need to have strong, vibrant capital markets if we want to have a healthy, job-creating economy.  Our capital markets must be built on a foundation that is strong enough to withstand the next storm.  During the Great Recession, we started a discussion about how to help insulate us when the next crisis comes.

The next financial crisis may come from any direction.  My job is to help figure out where the next crisis may come from, and how to minimize the damage it would cause.  That means we must identify systemic risks and mitigate them.  Today, we have convened to continue this conversation and discuss what the SEC can do to better prevent the buildup and transmission of risks that can take down our entire financial system.

I’m going to begin our discussion today with a quick reminder of how we got here.  And then, I’m going to focus on the three key areas where the SEC can play a critical role in addressing systemic risks.  First, we need to step outside of our silo and think broadly and cooperatively with our fellow regulators, both domestic and international.  Second, we need to focus on improving the stability and resiliency of the short-term funding markets, including securities lending and repurchase agreements (repo).  Third, we need to re-examine how we evaluate capital, leverage, and liquidity within the financial institutions and funds we regulate.

With the financial crisis in the rear view mirror, many forget the forces that converged in 2007. Some even deny the impact of the recession, optimistically viewing our financial markets and our economy as inoculated from a virus that spread quickly and wreaked havoc on a global economy.  Yet, studies demonstrate that the Great Recession continues to affect both attitudes and behaviors.  A recent survey found that the generation entering the workforce now – the Millennials, who are 21 to 36 years old – have the same fiscally conservative views as the generation that exited the Great Depression.[1]  Millennials are skeptical of the financial markets and long-term investing, yet we increasingly depend on them to invest and drive our economy.

I, too, am crisis-scarred.  And I share a dream with these Millennials.  I dream of never facing another financial crisis.  I want to do my part to avoid ever having to face another one.  The events of 2008 are indelibly etched into my memory.  In 2008, while I was working for Senator Jack Reed, our country’s economic leaders began closed-door briefings with members of Congress. Concerned about the unfolding financial crisis, the Chair of the Federal Reserve and the Secretary of Treasury pleaded for help and for an unprecedented financial intervention to stave off another Great Depression.  They wanted tools to protect our Nation from an invisible force that came to be known as systemic risk.  A comprehensive strategy was developed to stabilize our economy and unlock the credit markets in order to save our financial system.

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Category: Bailouts, Really, really bad calls, Regulation

Why Does US Cell Phone Service Suck?

Yesterday on my commute to work, I became annoyed with the spotty coverage and slow connection provided by Verizon Wireless. I tweeted my frustration. Imagine my surprise when AT&T’s social networking Tinkerbell responded to me: “Connect when and where you want with our reliable 4G LTE!” I found that amusing. The reason I switched to…Read More

Category: Really, really bad calls, Regulation, Taxes and Policy, Technology

Category: Regulation, Think Tank

Spreading Sunshine in Private Equity

Spreading Sunshine in Private Equity Andrew J. Bowden, Director, Office of Compliance Inspections and Examinations Private Equity International (PEI), Private Fund Compliance Forum 2014 New York, NY May 6, 2014   Andrew J. Bowden is the Securities and Exchange Commission’s Director of Office of Compliance Inspections and Examinations (OCIE) and will lead its National Exam…Read More

Category: Regulation, Think Tank, Venture Capital

Simplicity versus complexity in financial regulation

Category: Regulation, Think Tank

Fiduciary Duty of Brokers

Source: WSJ

Category: Finance, Legal, Regulation

Depositor Discipline of Risk-Taking by U.S. Banks

Depositor Discipline of Risk-Taking by U.S. Banks Stavros Peristiani and João Santos Liberty Street Economics April 14, 2014   This post is the second in a series of six Liberty Street Economics posts on liquidity issues. The recent financial crisis caused the largest rise in the number of bank failures since the unprecedented banking crisis…Read More

Category: Credit, Federal Reserve, Regulation, Think Tank

The Broken SEC Enforcement Mechanism

Today, I am compelled to direct your attention today to a column by my Bloomberg colleague Jonathan Weil, titled “The Best SEC Speech Ever.” The speech that Weil referred to in the headline was the retirement speech of Jim Kidney, a 25-year veteran trial attorney at the Securities and Exchange Commission. Three things stood out…Read More

Category: Legal, Regulation

SEC: “A Tollbooth on the Bankster Turnpike”

Jim Kidney’s SEC Farewell Speech   Now what you have all come here for. To hear some final words from Jim Kidney. Emphasis on FINAL. I originally planned this to start at noon so I could give a four hour speech getting even. But sadly, it is not to be. I went through my grudge…Read More

Category: Legal, Regulation, Think Tank

Michael Lewis on Charlie Rose

Michael Lewis discusses his latest book: “Flash Boys: A Wall Street Revolt.”

Category: Regulation, Trading, Video