Primer: Six Things Happening Right Now With Financial Regulation


| 8/12/2010 9:25:22 AM


Tags: Politics, financial regulation, credit rating, FDIC, Consumer Financial Protection Bureau, Volcker Rule, ProPublica Lindsay Beyerstein, Media Consortium,

Money Hands Big

News about the Dodd-Frank financial reform legislation has come in smatterings. We’re well aware that there were people who weren’t impressed with its strength when it passed, and much of the bill leaves a lot still to be determined by regulators in subsequent rulemaking (By one law firm’s count [PDF], it requires 67 studies and 243 new rules to be created). And that leaves us with many moving parts, so here are a few—in motion right now—that pique our interest:

Regulators discuss how to shift away from reliance on credit rating agencies

Credit rating agencies played a critical role in the financial crisis. Triple-A ratings on risky subprime mortgage-backed securities—later downgraded to junk status—indicated just how easily the three major rating agencies, hungry for market share, were pressured into handing out ratings that were influenced by the wishes of big banks.

This week, regulators met to discuss how to meet a mandate in the Dodd-Frank financial reform legislation requiring that regulators stop relying on rating agencies to gauge the amount of capital banks must hold in case of big losses. They have a year before they must implement alternative measures.

But according to The Wall Street Journal, that discussion about alternative measures—which has now been opened for public comment—is holding up efforts to craft new capital standards for banks, which “will likely prolong uncertainty” for at least a year.

joe_4
8/23/2010 1:30:41 AM

Are we investigating here??? How about the slightest tip of the hat to the fact that the SEC is a rubber stamp institution, only investigating a handful of infractions each year. Over 5000 whistleblower complaints in one year... less than twenty leading to prosecutions. If there is selective prosecution of companies, or completely absent prosecution... why would we ever trust them with overseeing oil companies reporting their assets correctly. Does anyone here trust this regulation bill? Also, treat me like a paid robot... an untrustworthy shill for someone sending me a check. I didn't know this was legal, but I can make some bank posting comments that are in favor of the author's viewpoints for many sites. I almost took a job on Elance.com, until I realized that the job was nothing more than a propoganda pump... and they wanted me to work the handle for cash. Always assume the person you are reading is getting paid to win your opinion, or to make it seem that the majority is on a different side than your best judgment would lead you to believe. Trust your judgment.