Wednesday, March 24, 2010

Financial regulation overhaul is the next biggie: did health care set the tone?

From Bill on major issues
Take a look at “Business Insider” article today by John Carney, “Sorry, America: The Latest Round of Financial Regulation Won’t Fix Anything”, link here.

His opening sentence is prescient: “Financial regulatory reform got a huge boost from the passage of health care reform”. So then could a lot of other regulatory reforms and mandatory insurance. Later, contrary to George Soros, he ways that regulation won’t work, that investors and counter-parties should be wary of bankers who don’t show “humility” (instead of male swagger), and that we could dispense with ratings agencies. (Let amateur bloggers do the ratings and risk the libel suits.)

Yet Tom Braitwaite in Washington writes in Financial Times, “US financial regulation set to succeed”, link (registration required).

The Treasury Department’s official paper on the topic is “Financial Regulatory Reform: A New Foundation”, pdf, link here.

The House link for “The Financial Services Oversight Council Act of 2009” is here.

Facing GOP objections on the Senate floor later, the Senate panel passed a bill to implement financial regulation reform March 22, with the story by Brady Dennis and David Cho in the Washington Post (web url) here.

It’s hard to find news sources that summarize the provisions, and the precedence that could be set for others. This article says “In seeking to recast the rules that have long governed the financial sector, the bill would in part establish a bureau inside the Federal Reserve to protect consumers and set up a council of regulators to survey threats to the financial system. The legislation would also bring financial derivatives under government oversight and empower officials to seize the biggest financial firms if they face collapse”.

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