As we move for a moment beyond the pitched partisan battles surrounding financial, health care, environmental and immigration reform, many are beginning to think more earnestly about the challenge of regulation itself. My own work, along with that of a growing band of others influenced by dramatic developments in the natural and social sciences, has…
The Obama Administration has been steadily losing its luster in many areas, but perhaps nowhere more so than in the field of financial regulation, where leadership is more urgently needed than anywhere else. Today’s American Banker (proprietary content, unfortunately) carries a story, appropriately entitled “White House backs itself into a corner letting CFPB remain leaderless,”…
Let’s face it. Very few people have a clue how much money gets deducted from their mutual funds and then used to pay sales, marketing and service expenses. These ongoing, “hidden” deductions are above and beyond management fees that also reduce investors’ returns. And these fees can be in excess of the out-of-pocket, front-end sales…
Here is Planet Money (including our Duke Law alumna, Barbara Matthews) on what’s going on at Basel. This is more important than most realize because the rules being developed internationally will apply to US banks, and they are about the most important ones there will be. Round rooms, not smoke-filled (anymore), but obscure and windowless…
Yesterday I noted that the Basel Committee and the Financial Stability Board had issued reports challenging the complaints of bankers that stricter bank capital and liquidity rules and demonstrating the the proposed rules would make for healthier economic growth. I asked the question whether this might signal progress in banking regulation in the face of…
The next “next thing” in finance is said to be covered bonds. These securities have a long and distinguished pedigree, originating under the rule of King Frederick the Great in order to generate mortgage financing for Prussia’s landed gentry, who had been battered by the Seven Years War. Historically used in European finance, covered bonds…
Many banking leaders have been whining incessantly about how proposed new capital and liquidity requirements will adversely impact GDP and reduce credit. This is an old canard raised by almost every industry when facing new regulation. The logic is about as convincing as arguing against restricting drunk driving because this will reduce gasoline consumption. Yet…
Today the Treasury Department is hosting a summit designed to explore options for reforming the two housing giants, Fannie Mae and Freddy Mac. Addressing these government-controlled mortgage underwriting organizations is a task that has remained conspicuously absent from the financial reform process so far, even though both organizations, which have had a disastrous history in…
The mystery unfolds. On Monday in “haunted houses,” I mulled over the question, why is it that many people believe that the $700 billion, Troubled Asset Relief Program (“Bailout”) of 2008 was authorized during President Obama’s administration. Today, I’d like follow up with some fascinating data from the Pew Research Center. Note that these results…
Microfinance has become the rage of late, with its leading proponent, Muhammad Yunus, awarded the Nobel Peace Prize. Microfinance loans, an estimated $60 billion of which is outstanding, enable low-income individuals and the poor to start or expand small businesses. Until recently, most microfinance loans were made from funds provided by charitable donors. As a…
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