tagged w/ Regulatory Reform
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Despite being blamed for billions in lost investments, the big three credit rating companies continue to dodge accountability.
http://www.youtube.com/watch?v=KPNcrCtcBVYDespite being blamed for billions in lost investments, the big three credit rating... more
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lagan
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added this
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2 years ago
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There is no independent auditor overseeing the federal agency responsible for some $6 trillion in home mortgages, because the Department of Justice's Office of Legal Counsel ruled that the agency's inspector general didn't have authority to operate, according to internal memos obtained by the Huffington Post.
The ruling came in response to a request from the Federal Housing Finance Agency itself -- which means that a federal agency essentially succeeded in getting rid of its own inspector general.
The FHFA is home to Fannie Mae, Freddie Mac, and the Federal Home Loan Banks, which are jointly responsible for purchasing or guaranteeing more than 80 percent of new mortgages issued since the middle of 2008, according to FHFA numbers.
http://www.huffingtonpost.com/2009/11/10/fannie-and-freddie-fire-t_n_353018.htmlThere is no independent auditor overseeing the federal agency responsible for some $6... more
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Derivatives Just "A Sophisticated Form Of Gambling," U.S. Senators Say; Propose Bill Allowing State Gambling Laws To Apply
Three U.S. Senators described the complex and little-understood world of derivatives trading as "a sophisticated form of gambling," proposing legislation that would enable state gambling regulators and attorneys general to examine the practice.
Senators Maria Cantwell (D-WA), Ron Wyden (D-Ore.) and Bernie Sanders (I-VT) sent out a press release on Tuesday, describing the need for more oversight of the market in derivatives, which are contracts that can act as insurance against a future event, or as just a simple bet.
"The derivatives market has done so much damage to our economy and is nothing more than a very high-stakes casino - except that casinos have to abide by regulations," wrote Cantwell. "Even in Las Vegas at the Blackjack tables, both the House and the player have to have capital behind their bets. But we allow Wall Street to continue to operate in the dark..."
http://www.huffingtonpost.com/2009/11/10/derivatives-just-a-sophis_n_352994.htmlDerivatives Just "A Sophisticated Form Of Gambling," U.S. Senators Say;... more
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"This is not a time for timidity," Senate Banking Committee Chairman Chris Dodd (D-Conn.) said Tuesday as he unveiled what he called a "sweeping, bold, comprehensive, long overdue" restructuring of the financial regulatory regime - one that, unlike competing proposals, limits rather than expands the powers of the Federal Reserve.
Specifically, Dodd's bill takes away the Fed's regulatory power in some key areas. "I really want the Federal Reserve to get back to its core enterprises," Dodd said. "We saw over the last number of years when they took on consumer protection responsibilities and the regulation of bank holding companies, it was an abysmal failure. So the idea that we're going to go back and expand those roles and functions at the expense of the vitality of the core functions that they're designed to perform is going in the wrong way."
The bill would also end the practice of allowing banks to select the directors of the regional Federal Reserve banks. That was a last-minute addition that came after the committee's top Republican, Sen. Richard Shelby of Alabama, told HuffPost he wanted to end the conflict of interest.
Dodd's bill is comprehensive, coming in at over 1,000 pages and tackling topics from derivatives reform to consumer financial protection.
more at link...
http://www.huffingtonpost.com/2009/11/10/dodds-proposed-financial_n_352235.html"This is not a time for timidity," Senate Banking Committee Chairman Chris... more
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When Olav Refvik wanted to boost the price of heating oil to make a lucrative energy deal even more lucrative, the Morgan Stanley trader locked up several storage tanks the bank owned near New York Harbor to squeeze supply. Far from being illegal, the maneuver -- which earned him millions and the moniker "King of New York Harbor" -- is business as usual in the "regulated" commodities market.
The rough-and-tumble Chicago-based commodities market is an unusual beast on Wall Street, where practices that would be frowned upon at the flashier New York stock exchange, are considered quite acceptable.
While less glamorous than its East Coast cousin, the commodities markets are critical to most Americans. That's because its traders are integral in establishing the price we pay for oil at the pump each day. When Morgan Stanley, Citigroup and Royal Dutch Shell squirreled away 80 million barrels of crude oil -- nearly enough to supply the entire world for a day -- in supertankers off the Gulf of Mexico last January, they too profited as the price at the pump rose.
But now, as a comprehensive climate bill wends its way through the House of Representatives, some of these aggressive commodities practices have come under scrutiny. New legislation proposed by Rep. Waxman (D-Calif.) and Rep. Markey (D-Mass.) would create a system of carbon allowance permits that the government would sell to companies that want to circumvent new emissions requirements. These permits would end up spurring as much as $2 trillion in new carbon-based "derivatives." In this case, these new derivatives, so-called because they derive their value from something else, would be traded on the commodities markets, and without proper regulation, critics worry their prices could be manipulated much in the way that traders influence the price of oil.
With the combination of the upcoming climate bill that that could create a major new commodity derivatives market, in addition to a new focus from the Obama administration on derivatives, experts are hoping that regulation will be strengthened. Experts and legislators say these two forces have created a perfect storm, and that the opportunity is ripe to take a broader look at the overall commodities market rather than be limited to reforming only derivatives.When Olav Refvik wanted to boost the price of heating oil to make a lucrative energy... more
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Sunday's Meet the Press recapped and dove into in this article: Sept. 21st 08
The federal government stepped in with an emergency bailout of collapsing financial institutions on Wall Street last week because it could not wait for regulatory agencies to sort through the “crisis situation,” Treasury Secretary Henry Paulson said Sunday.
“Financial institutions [were] clogged with illiquid loans,” Paulson said in an interview on NBC’s “Meet the Press,” effectively freezing credit markets and choking off money to keep Wall Street humming.
“This is an urgent matter, and we need to move quickly,” Paulson said in urging Congress to immediately approve the Bush administration’s request for sweeping authority to bypass regulatory agencies and directly take over the bad mortgages and mortgage-backed securitites."Sunday's Meet the Press recapped and dove into in this article: Sept. 21st 08... more
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