Posts filed under “Regulation”

How to Fix the Financial System

Hey, put a BandAid on that, or it might get infected!

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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.

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Sources:
The Global Financial Crisis: A Plan for Regulatory Reform
The Committee on Capital Markets Regulation, 5/26/09

http://www.capmktsreg.org/

http://www.capmktsreg.org/pdfs/TGFC-CCMR_Report_(5-26-09).pdf

How to Fix the Financial System
Damian Paletta
Real Time Economics, May 26, 2009, 12:01 AM ET

http://blogs.wsj.com/economics/2009/05/26/recommendations-for-the-supervision-of-financial-markets/

Category: Bailouts, Markets, Regulation

FDIC Bank Failures (by Week)

In light of Friday’s BankUnited Failure, and our earlier post on rising foreclosures, here is an updated version of a chart I ran previously from Ron Griess of The Chart Store, showing bank failures: > Bank Failures reported by FDIC

Category: Credit, Regulation

Regulation In The Automobile Industry

Bloomberg News reports about the governments restrictions on emissions. (Political Capital)

Category: Regulation, Video

Fighting Derivatives Regulation

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

Category: Bailouts, Derivatives, Regulation

Why It’s Time To Reform Investment Banking’s League Tables

A lack of transparency and overall credibility in so-called league tables for investment banks mean it’s time for reform and standardization of the ranking system, DJ Newswires columnists Rob Armstrong and Alessandro Pasetti say.

5/18/2009

Category: Bailouts, Regulation, Video

Recall Why TARP Funds Were Necessary

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

Category: Bailouts, Credit, Investing, Regulation

Debunking The Notion Of Too Big To Fail

Interview and analysis with Mariner Kemper of UMB Financial regarding about the testifying of Sheila Bair before the congress on the too big to fail situation.

4:16

Bloomberg

Category: Bailouts, Regulation, Video

FDIC’s Bair on U.S. Banks, Executives: Political Capital

Sheila Bair on Political Capital with Al Hunt

Preview

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Click for full video

bair-al-hunt

Category: Bailouts, Credit, Regulation, Video

FDIC Bair: Bank Chiefs Need to Go

“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

Category: Bailouts, Markets, Regulation

Why Are We Bailing Out Insurers?

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

Category: Bailouts, Corporate Management, Markets, Really, really bad calls, Regulation, Taxes and Policy