Where Financial Reform Starts

I’m going to keep this summary of the Roosevelt Institute report and guides, all the interviews and the major posts “sticked” to the top of this page while financial reform is running, to be used as a resource for all (I’ll update it as needed):

Roosevelt Institute Resources

The Make Markets Be Markets Report.
The Current State of Financial Reform, March 26th, 2010.
Six Critical Elements of Financial Reform.

Interviews

An Interview About Off-Balance Sheet Reform with Jennifer Taub.

An Interview About the Volcker Rule with Jane D’Arista.

An Interview About the Ratings Agencies With Jerome Fons.

An Interview About Spinning Out Derivatives Desks with Michael Greenberger.

An Interview About Auditing the Fed with Dean Baker.

An Interview About the End User Exemption with Stephen Lubben.

SAFE Banking

Demos’ Guide and FAQ for the SAFE Banking Act.

Consensus

As Rob Johnson points out in his excellent American Prospect article on financial reform, it’s surprising how much consensus there was in the 2000s on what big things need to move in regulation:

On this point, there is a clear consensus among experts at the Bank for International Settlements and the Financial Stability Board, though not within the U.S. Congress. Reform of “too big to fail,” at minimum, would include systems for resolution of failed financial companies that are harmonized internationally; a vast increase in the capacity of regulators to assess the real-time condition of large, complex institutions; exposure limits on cross-firm asset-holding to deter contagion; and derivatives reform so that balance sheets can be understood and monitored.

A simple menu of what we need includes:

– Derivatives reform;
– Off-balance-sheet reform;
– Rating-agency reform;
– Restructuring of housing finance;
– Separation of risky activities from the financial safety net;
– Separation of activities that have inherent conflicts of interest within a firm;
– Legal resolution powers for large failed institutions, with consistent cross-border standards;
– Significant increase in resources and salaries for supervision, examination, and regulation;
– Consumer financial protection.

Will we get those from this bill? Some yes, some sort of, and some no. Will there be a cultural change, either on the regulatory side or the Wall Street side? Definitely not for the second, and we’ll see on the first. And will this simply be use returning to the financial sector of 2005-2007 with some additional regulatory powers? I certainly hope not, but we’ll see.

Here’s what I tell myself: it took 30 years to take apart the fragile financial regulations and norms the New Deal and the mid-century crew put together to create a financial sector that works to build a broad-based prosperity for everyone. We aren’t going to rebuild that overnight.

This entry was posted in Uncategorized. Bookmark the permalink.

3 Responses to Where Financial Reform Starts

  1. noompa says:

    As a suggestion, it might be better to only display part of the post on the front page; readers would then have to click through to read the entire post. This way new posts would be visible immediately (its a tip from a friend who works on SEO and finds that many people don’t scroll down past the “sticky”, assuming that there haven’t been any new posts).

  2. Pingback: The “grownups” on financial reform - Politisink

  3. Mike says:

    Hey Dude, you need to move this top post down or over to the side. I’ve been hitting your site, but it always been the same post? Don’t you ever up date? Are you on vacation?

    Oh, now that I scroll down, the most recent posts are lower. What a novel idea!! Put the most recent post lower on the blog. Wow. Who would have thought of that?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s