Posts filed under “Regulation”
Hey, put a BandAid on that, or it might get infected!
The Committee on Capital Markets Regulation has a proposal to fix the financial. I only gave it a quick look through, but what I saw was pretty milquetoast:
Here’s the highlights — a list of obvious fixes — via Real Time Economics:
-Keep two or three regulators for the financial system – the Fed, a new U.S. Financial Services Authority, and an investor and consumer protection agency. The USFSA “would regulate all aspects of the financial system, including market structure and activities and safety and soundness for all financial institutions.”
-Mandate centralized clearing of credit default swaps. To the extent that some CDSs stay outside a centralized clearing process, the committee calls for higher capital requirements to “compensate for increased systemic risk of these contracts.”
-Don’t make a hasty decision to raise capital requirements across the financial sector until more analysis is done. But the committee does recommend higher capital requirements for megabanks, such as those with more than $250 billion in assets.
-Strengthen the “leverage” capital ratio, and debate whether the leverage ratio should be based on common equity rather than total Tier 1 capital.
-Give the Fed temporary authority to evaluate confidential information supplied by hedge funds.
-Relax acquisition rules to make it easier for private equity firms to pump money into the banking sector.
-Create a comprehensive policy called the Financial Company Resolution Act, that would be allowed to put any financial company into receivership, not just “systemically” important ones.
-Ban or limit high-risk mortgages from being securitized.
Nothing about beefing up the SEC, or anything remotely controversial.
The Global Financial Crisis: A Plan for Regulatory Reform
The Committee on Capital Markets Regulation, 5/26/09
How to Fix the Financial System
Real Time Economics, May 26, 2009, 12:01 AM ET
Astonishing: “Brooksley Born, the former U.S. commodities regulator who lost the fight to police over-the- counter derivatives a decade ago, said the banks that caused the financial crisis are trying to stop the overhaul of the market. “Special interests in the financial-services industry are beginning to advocate a return to business as usual and to…Read More
Now that the bulk of the crisis has passed, and the panic has subsided, the banks want to return the money, no strings attached. Return the cash, leave the regulatory environment alone, write downt h warrants, and move on with our lives. My response is, “Not so fast.” Let’s not forget how this occurred: A…Read More
“Management needs to be evaluated . Have they been doing a good job? Are there people who can do a better job? I think the review needs to go with both the management and the board as well, absolutely . . . I think there will be an evaluation process. We’re requesting it as part…Read More
Will someone please explain to me why we are giving $22 Billion to Insurers? “The Treasury Department will make federal bailout funds available to a number of U.S. life insurers, acting on the embattled sector’s long-running effort to get government help. The Treasury is prepared to inject up to $22 billion into the insurers under…Read More