Posts Tagged: financial regulatory reform

A vote from Illinois for Dodd-Frank

Lisa Madigan

Illinois Attorney General Lisa Madigan supports the Chris Dodd-Barney Frank financial regulatory reform bill because it will now be more difficult for the federal government to preempt state regulations. According to Greg Hinz of Crain’s Chicago Business, Madigan likes the fact that the bill will allow states to make their own financial regulations and to sue banks for lack of compliance with federal laws. The Senate is expected to pass financial regulation today.

Madigan’s endorsement is important: she’s included in a group of high-profile state AGs (more…)

Congress kills TARP…long live TARP

In order to pay for financial regulatory reform, Congress transferred what funds remain from the Troubled Asset Relief Program a/k/a TARP (a/k/a the $700 billion bailout of Wall Street marked by its unpopularity — and success in stabilizing the financial market). Paul Merrion of Crain’s Chicago Business reports that this is unlikely to affect banks that have applied for TARP money, such as Chicago’s ShoreBank. (more…)

Illinois banks balk at capital requirements

Steve Daniels of Crain’s Chicago Business reports that the Illinois Banking Association is lobbying against a piece of the financial regulatory reform bill that would force some Illinois banks to raise more capital. The provision, pushed by Federal Deposit Insurance Corp. Chairman Sheila Bair, regulates trust-preferred securities. (more…)

Preventing The Next Financial Disaster

The Washington Post’s Steven Pearlstein has a clear, and I think correct, analysis of Treasury Secretary’s Tim Geithner’s shortcomings: (more…)

Wall Street’s Top Cop (Sort of) Returns

The Washington Post’s Zachary Goldfarb has a balanced piece on whether the Obama administration’s Securities and Exchange Commission is doing anything to fight corporate crime after years in the wilderness. (more…)

Should the Federal Reserve Get Even More Power?

David Leonhardt has a helpful New York Times Magazine piece that explains various financial regulatory reform proposals and concludes that it will be up to regulators themselves, not new regulatory rules, to prevent the next financial crisis. The analysis, though, minimizes an important element of these proposed reforms: how different the Federal Reserve is from other federal agencies that do financial regulation. (more…)

TARP Not Working For The Little Guys

The Washington Post’s Binyamin Appelbaum and David Cho report that while the nine huge banks that took part in the Treasury Department’s Troubled Asset Relief Program have repaid their loans, “hundreds of community banks” have not returned their TARP money. Some of these community banks are “struggling with losses on real estate development loans,” while others were dubiously selected as bailout recipients.

This news about community banks is a disquieting plot twist in the narrative that TARP is a surprise success. The quick return to profits by the biggest banks (Goldman Sachs, J.P. Morgan, etc.) coupled with the failure of community banks could lead to greater consolidation in the banking industry. If dozens of community banks go under, consumers must go to a big banks, that likely do both commercial and investment banking. So financial firms “too big to fail” will become even bigger. Perhaps the final legislative outcome of Chris Dodd’s financial regulatory reforms will address this problem.

What Now For Tim Geithner

John Cassidy’s New Yorker profile of Tim Geithner mostly makes a single argument, with that argument contained in the  sub-head: “Timothy Geithner’s financial plan is working — and making him very unpopular.” This has become the prevailing wisdom on the Geithner beat — summarized equally well a few weeks ago by the Wall Street Journal’s Deborah Solomon. This part of Cassidy’s conclusion, though, is fresh and interesting: (more…)

An Uncommon White House Push For Wall Street Regulation

In the week of a Republican taking Ted Kennedy’s old Senate seat — and subsequent speculation of how Scott Brown’s victory will change health care reform — Barack Obama has wanted to change the conversation to financial regulatory reform. Yesterday,the New York Times’ reported that Obama wants any regulatory reform bill to create a new federal agency that will protect financial consumers. Today the Times’ Jackie Calmes and Louis Uchitelle report that Obama supports a proposal by Paul Volcker, chairman of the Economic Recovery Board, that prohibits commercial banks from trading financial securities for their own accounts. Obama’s proposal comes after a year of basically ignoring Volcker and the former Federal Reserve chairman’s fondness for the repealed Glass-Stegall Act, That depression-era bill separated commercial banking from investment banking — an aim similar to Obama’s proposal.

An oft-stated criticism of the health care reform process and, to a lesser extent the stimulus bill, is that Obama didn’t play a more active role in crafting legislation. Financial regulatory reform might be a chance to see if a more active White House role leads to better, more coherent bills.