An irreverent Wall Street Blogby Bill Singer
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AS POSTED ON THE WHITE HOUSE'S WEBSITE :
THE WHITE HOUSE
Office of the Press Secretary
For Immediate Release June 17, 2009
President Obama to Announce Comprehensive Plan for Regulatory Reform
WASHINGTON – President Obama will lay out a comprehensive regulatory reform plan this afternoon to modernize and protect the integrity of our financial system. While this crisis has had many causes, it is clear now that the government could have done more to prevent these problems from growing out of control and threatening our overall economy.
The President will be joined by Treasury Secretary Tim Geithner, representatives from the regulatory community, consumer groups, the financial industry and members of Congress for an event in the East Room later this afternoon.
The President’s plan will:
Require that all financial firms that pose a significant risk to the financial system at large are subjected to strong consolidated supervision and regulation Increase market discipline and transparency to make our markets strong enough to withstand system-wide stress and the potential failure of one or more large financial institutions Rebuild trust in our markets by creating the Consumer Financial Protection Agency to focus exclusively on protecting consumers in credit, savings, and payment markets. Provide the government with the tools needed to manage financial crises so it is not forced to choose between bailouts and financial collapse Raise international regulatory standards and improve international coordination Below are links to the White Paper and Fact Sheets:
White Paper: Financial Regulatory Reform:
http://www.financialstability.gov/docs/regulatoryreform/requiring_strong_supervision_reg_finfirms.pdfRequiring Strong Supervision And Appropriate Regulation Of All Financial Firms
http://www.financialstability.gov/docs/regulatoryreform/strengthening_reg_core-markets_infrastructure.pdf Strengthening Regulation Of Core Markets And Market Infrastructure
http://www.financialstability.gov/docs/regulatoryreform/strengthening_consumer_protection.pdf Strengthening Consumer Protection
http://www.financialstability.gov/docs/regulatoryreform/providing_govt_tools_manage_fincrisis.pdfProviding The Government With Tools To Effectively Manage Failing Institutions
http://www.financialstability.gov/docs/regulatoryreform/improving_internatl_reg_standards_co-op.pdf Improving International Regulatory Standards And Cooperation
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Initial Commentary from Bill Singer:
I just plowed through some 89-pages of the White Paper and my initial impression of its tone is favorable -- with qualifications. At least the authors pointed fingers of blame and, thankfully, didn't shrink from the task behind polite political phrases. Some of the shots are fairly blunt. Failed risk management. Gaps and weaknesses in regulation. Lack of coordination.
I also like the fact that someone has the vision thing working. They're calling for new institutions: councils, agencies, and the like. Then I started to drill down a bit, and I see the old, cold, boney hand of politics. The Consumer Financial Protection Agency appears comprehensive but there is an exemption for products and services regulated by the SEC and CFTC. Then I note that many of the newfangled institutions are merely combinations of existing organizations -- and that will bring along all the baggage of political compromise and career bureaucrats.
Ultimately, yeah, it's a good first step and I applaud it. I'm also gaining confidence daily in our President (I voted for him, so I guess that's good) and I think he has a feel for what these times need. As such, he gets my support here but I want him to know that far too much of what's in the White Paper will likely not work unless he's prepared to view the project as transitional -- he needs a bigger and better endgame than simply welding a lot of failed regulators into a new facade.
My fear is that so much of what is wrong with the regulation of Wall Street has become institutionalized and that by pushing so many failed regulators together, we run the risk of infecting the system with the worst of what ails our regulatory scheme. If the White Paper will work, President Obama must attract new faces and new blood into the system. It's time to bring an end to the pernicious influence of those who brought us to this doorstep.
ABOUT: BrokeAndBroker.com and RRBDLaw.com lambaste the ineffective regulation of Wall Street and advocate for the rights of defrauded investors, independent/regional firms, and individual registered persons. Provocative commentary by veteran regulatory lawyer Bill Singer.
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