Posts filed under “Regulation”

Financial Overhaul Plan ?

Yesterday, I lamented that “So far, the Obama administration approach to bailouts has been to keep running Bush Economic Term III.” The reference was to the continuation of the Bush policies, by many of the same people involved in that prior, ruinous bailout approach.

Soon, we shall find out if Team Obama’s “Change we can believe in” is for real, or whether it is business as usual. The administration is set to release in mid-June a series of regulatory overhauls — call it “Re-Regulation” — of the entire financial system and the causes of the credit crisis and economic meltdown:

“All that — and more — is on the table as the Obama administration prepares to overhaul the regulatory apparatus that failed to prevent the gravest economic crisis since the Depression. Under consideration is a new agency to regulate mortgages and credit cards, as well as tighter federal oversight of hedge funds and insurance.” (NYT)

As you might have surmised, I have a few questions for the policy makers:

• Will the main economic advisors to the WH — Summers and Geithner — convince President Obama to cave in to the banking industry lobbying efforts?

• Are Derivatives going to be properly regulated, mandated as exchange traded products, transparently reported and required to have appropriate reserve requirements?

• Will Investment banks and Commercial (depository) banks be separated (a return to Glass Steagall)?

• Can the Fed continue its unprecedented power grab?

•  Will non-depository loan originators be brought under full Federal Reserve banking supervision?

• In the future, will compensation packages be based upon volume of risk assumed or on profitability?

• Why haven’t the largest shareholders — mutual funds, pension plans, and large institutional investors — upheld their fiduciary obligations to their investors? Why have the funds ignored issues of corporate governance, Boards of Directors, cronyism, etc.?

• Will iBank leverage be forced to return to historical norms?

• The excessive deposit concentration, with the majority of US checking and savings accounts held by just a few mega-banks be allowed to continue?

• Is “Too big to fail” going to remain the operative policy? When will “Too big to succeed” be recognized as a major problem?

• The FDIC is the regulator with the best track record in this crisis — will they expand their authority?• Is the SEC ever going to receive adequate funding and staffing to do their jobs? an we reverse a decade of regulatory neglect at the agency?

Here’s where the rubber meets the road . . .


Busted Banks Rebuff Regulation (June 1, 2009)

Administration Is Near a Financial Overhaul Plan
NYT June 1, 2009

Category: Bailout Nation, Bailouts, Credit, Derivatives, Regulation

Busted Banks Rebuff Regulation

Front page of the NY Times goes over the shameful behavior of banks — one of the primary causes of the entire crisis — using bailout money to pay lobbyists to maintain the regulatory status quo. Its yet another reason for why they should have been put into bankruptcy once they became insolvent. So far,…Read More

Category: Bailout Nation, Bailouts, Credit, Regulation

Blaming Clinton?

Interesting Sunday Times Magazine article on Bill Clinton. The part I found most intriguing was about the regulatory acts that the Clinton administration was  responsible for: “One thing that thrived during Clinton’s presidency, the economy, has wilted of late. The economic boom of the 1990s created nearly 23 million new jobs during his eight years,…Read More

Category: Bailouts, Politics, Regulation

The Rise of A Financial Stability Regulator

Just as the Great Depression led to the creation of new institutions and financial practices, the Obama administration is on track to impact financial regulations. One of the new concepts involves a financial stability regulator, David Wessel explains.


Category: Regulation, Video

How to Fix the Financial System

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…Read More

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.


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