I wanted restoration of the Glass-Steagall Act. It was the most far reaching of any financial control law in American History. The new law may be an improvement but I fear the details will provide loopholes that will not fulfill American needs.
Following is a an abridged summary found on Morningstar.
-NEW REGULATORY AUTHORITY: Gives federal regulators new authority to seize and break up large troubled financial firms without taxpayers bailouts in cases where the firm’s collapse could destabilize the financial system.
-CONSUMER AGENCY: Would create a new Consumer Financial Protection Bureau within the Federal Reserve, with rulemaking and some enforcement power over banks and non-banks that offer consumer financial products or services such as credit cards, mortgages and other loans.
-DERIVATIVES: Would require the vast majority of all derivatives trading be executed on a public exchange as opposed to between banks and their customers as many contracts are currently written.
-FINANCIAL STABILITY COUNCIL: Would establish a new, nine-member Financial Stability Oversight Council, comprising existing regulators charged with monitoring and addressing system-wide risks to the nation’s financial stability.
-OVERSIGHT CHANGES: Would eliminate the Office of Thrift Supervision, but an attempt to strip the Fed of its oversight of thousands of community banks in the bill was reversed with an amendment.
-FEDERAL RESERVE OVERSIGHT: Calls for a one-time government audit of all of the Fed’s emergency lending programs from Dec. 2007 onward, including facilities used to help deal with the collapse of Bear Stearns & Co. and the program to stabilize asset-backed securities markets.
-BANK CAPITAL STANDARDS: Under an amendment adopted unanimously with little fanfare, the bill would force banks with more than $250 billion in assets to meet higher risk- and size-based capital standards.
-CREDIT RATING AGENCIES: The bill will establish a new self-regulatory organization for credit rating agencies designed to eliminate a conflict in the current system where an institution pays for its rating and, at times, shops for the best rating it can get for the lowest price.
-INVESTMENT ADVICE: Several Democrats had hoped to tighten regulations for broker-dealers who give investment advice, but they weren’t given a floor vote on their amendment despite near constant lobbying from consumer groups.
-MORTGAGE RISK: Would require firms that securitize mortgages and other loans to hold a portion of the risk on their own balance sheets, but–under an amendment added on the floor–also would direct regulators to establish a category of less-risky mortgage products– primarily fixed-rate, fully amortizing loans–that would be exempt from the risk-retention rule.
-HEDGE FUNDS: Would require hedge funds that manage more than $100 million to register with the SEC as investment advisors and disclose to the agency information about their trades and portfolios.
-CORPORATE GOVERNANCE: Would give shareholders of public corporations a non-binding vote on executive pay, and would give the SEC the authority to grant shareholders proxy access to nominate directors.
-INSURANCE: Would create a new Office of National Insurance within Treasury to monitor the industry, recommending to the systemic risk council insurers that should be treated as systemically important, as well as coordinate international insurance issues.
Coast Contact 