Former Fed Chair Alan Greenspan in today’s Financial Times: The financial system on which Dodd-Frank is being imposed is far more complex than the lawmakers, and even most regulators, apparently contemplate. We will almost certainly end up with a number of regulatory inconsistencies whose consequences cannot be readily anticipated. Early returns on the restructuring do … Continue reading Dodd-Frank
The Treasury has been spinning TARP as a victory in the months leading up to midterm elections. I have a lot of respect for Elizabeth Warren (former Chair of the Congressional Oversight Panel for TARP, currently helping in the early work for the Consumer Finance Protection Agency she promoted) and the work she has done on … Continue reading TARP: Too Early to Spin a Victory?
In the months leading up to the passage of the financial reform legislation, Congress decided to segregate the issues of financial regulation and the government sponsored enterprises (GSEs) that were central to the collapse. Now that Dodd-Frank is in the bank, Congress and the White House are turning to Freddie and Fannie, the two GSEs that … Continue reading When Reform Isn’t Reform
Freddie and Fannie are in the news again. Freddie is currently seeking an additional $1.8 billion in funding (to be added to the $160 billion that has already been spent on the two government sponsored enterprises or GSEs). This recent news has led me to pose an account of how a standard political choice story … Continue reading From Political Exchange to State Vampirism: The GSEs
As commentators begin to read the Dodd-Frank Wall Street Reform and Consumer Protection Act, they are discovering some hidden gems. The most recent discoveries: Diversifying the Portfolio (via Carrie Budoff Brown at Politico): Congress gives the federal government authority to terminate contracts with any financial firm that fails to ensure the “fair inclusion” of women … Continue reading What’s in the Sausage?
Even though the President should have been able to claim some political credit for the financial regulation legislation (regardless of its ultimately efficacy), defeat was once again snatched from the jaws of victory. The White House became embroiled in the USDA’s firing of Shirley Sherrod, losing control of the news cycle. As WaPo noted: Remember … Continue reading FinReg, Sherrod and the Attention Cycle
The President is scheduled to sign the 2,315 page Dodd-Frank Wall Street Reform and Consumer Protection Act at the Ronald Reagan building today, July 21, 2010. His prepared remarks read: These reforms represent the strongest consumer financial protections in history. And these protections will be enforced by a new consumer watchdog with just one job: … Continue reading Financial Regulation Update