StanCollender'sCapitalGainsandGames Washington, Wall Street and Everything in Between



Financial Regulation

Two cheers for Dodd

11 Mar 2010
Posted by Edmund L. Andrews

 

      It's not clear to whether Senate Banking chairman Chris Dodd simply lost his patience or was told by his Democratic brethren to end the fruitless attempt  to negotiate with Republicans over financial regulatory reform.

     It doesn't matter.  The important thing is that Dodd finally called it quits and announced on Thursday that he will unveil his own bill on Monday without any Republican support.

     If that means there is no financial reform this year, because Republicans block it by filibuster, it will be a setback for much-needed fixes to catastrophically broken system of regulation.   

      But the way things were going, this bill would have been worse than no bill.  There comes a time when you need to tell the obstructionists to put up or shut up.   As in health care reform, Democrats bent over backwards to lure Republican support for regulatory overhaul.

Dodd's failed reform

03 Mar 2010
Posted by Edmund L. Andrews

        I was  on the road and essentially off-line all day yesterday, so forgive me for being late to comment on Senator Chris Dodd’s newest and most bizarre proposal for some kind of consumer financial protection agency.

     In his third bid in as many days to win over a few token Republicans, the Senate Banking chairman is now proposing to create an enfeebled new consumer regulator inside the Federal Reserve.

      Say what????  This is the same Chris Dodd who, four months ago, accused the Fed of being “an abysmal failure” as a regulator and unveiled a bill that would have stripped it of virtually all its supervisory powers.

     "Over the last number of years when [the Fed] took on consumer-protection responsibility and regulation of bank holding companies, it was an abysmal failure," Dodd declared  at a press conference in November 9.

Posted by Edmund L. Andrews

I hate to join the pile-on against Goldman Sachs, the Wall Street firm that everybody loves to hate.  But items like this make me want to pull out my hair in frustration.

    The Financial Times reports tonight that Goldman has apparently won part of the mandate to manage the initial public offering of AIG's Asian life insurance unit -- AIA -- in Hong Kong.  The offering is expected to be for $10 billion or more, and Goldman will be one of seven investment banks to sell it.

     As far as I know, Goldman didn't do anything improper to get this deal.  It's a big IPO, Goldman is a top player in the league tables and this is one of its core competencies. 

     But still.   Goldman Sachs, more than any other firm on Wall Street, has managed to profit on almost every angle of the biggest single trainwreck (AIG) in the biggest financial crisis this country has ever seen.

Posted by Andrew Samwick

Earlier this month, I described the aspects of the financial crisis that I really didn't see coming, one of which was the misaligned incentives of the major credit rating agencies.  Yesterday, the SEC made this announcement:

The Securities and Exchange Commission today voted unanimously to take several rulemaking actions to bolster oversight of credit ratings agencies by enhancing disclosure and improving the quality of credit ratings.

That sounds like a good first step, but SEC oversight is only as good as the SEC's ability to resist manipulation by those it oversees.

Posted by Stan Collender

The White House couldn't let the one year anniversary of the fall of Lehman go by without it being "celebrated."  At the very least the president had to say that things are much better now -- and they are -- than they were a year ago.  He also had to say something to demonstrate to (please forgive me for using this phrase) "Main Street" that he knows it's still not happy.

But the real purpose of the speech was to refocus the financial services reform debate in Washington.  The president may have been speaking to Wall Street executives, but the real audience was members of Congress, especially Democrats, some of who in the next few weeks will be marking up various pieces of financial services regulation legislation.  He had to show that the general issue hasn't gotten lost in the health care debate and to say that the effort is still needed even if things seem to be better ("Normalcy cannot lead to complacency").

Immediately after the speech, the discussion on CNBC -- the financial channel that thinks it talks to and sometimes for Wall Street -- focused more on how what the president proposed could be implemented rather than whether it was needed.

 



Recent comments


Advertising


Order from Amazon


Copyright

Creative Commons LicenseThe content of CapitalGainsandGames.com is licensed under a Creative Commons Attribution-Noncommercial-Share Alike 3.0 United States License. Need permissions beyond the scope of this license? Please submit a request here.