Change Overview and Rationale - Center for the Study of Financial Market Evolution (CSFME)

What Good Are Regulations if We Don’t Fund The Regulators?

by David Schwartz J.D. CPA | Sunday, May 19, 2013 | All, Change Overview and Rationale, Formal Regulatory Remedies

Today Treasury Secretary Jack Lew delivered a broad policy address to an audience at the Pew Charitable Trust. For the most part, Lew spoke about progress the Treasury and Administration have made thus far ending too-big-to-fail and reigning in many of the perceived excesses of Wall Street firms. The truly interesting part of Lew’s address, however, was when he took Congress for to task for passing Dodd-Frank but then failing to properly fund the agencies and departments charged with enforcing the law. Absent real funding, he said, “the best rules will fall short without effective supervision and enforcement.”

US Cross-Border Swaps Regs Draw International Criticism

by David Schwartz J.D. CPA | Sunday, May 19, 2013 | All, Change Overview and Rationale, Formal Regulatory Remedies

Newly proposed cross-border regulations issued by the US Commodity Futures Trading Commission have made waves across the globe, with nine overseas finance officials urging US Treasury Secretary Jacob J. Lew to limit the cross-border reach of Dodd-Frank Act swaps rules. In an April 18, letter, finance officials from Brazil, France, Germany, Italy, Japan, Russia, South Africa, Switzerland, the UK, and Michel Barnier, the European Commissioner for Internal Market and Services, said that new US swaps regulations are fragmenting the $639 trillion global market.

How Do You Regulate Locally on a Global Scale?

by David Schwartz J.D. CPA | Sunday, May 12, 2013 | All, Change Overview and Rationale, Formal Regulatory Remedies

Over the past few decades, US and other financial regulators have had to think more and more about their regulations not just from a domestic standpoint, but from a global perspective as well. One prime example is the US Securities and Exchange Commission, whose regulatory mandate has been broadened by the Dodd-Frank Act to include regulation of certain kinds of over the counter (OTC) derivatives.

With Power Comes Responsibility. Institutional Investors’ Role In Corporate Governance.

by David Schwartz J.D. CPA | Monday, April 22, 2013 | All, Change Overview and Rationale, Commentary, Lender Directed Voting

Over the past sixty years, as more and more people in the US have begun to participate in the capital markets through retirement plans, mutual funds, ETFs and other pooled investment vehicles, institutional investors have grown from bit players in the markets, owning about 5% of US equities prior to 1945, to being major players today, owning greater than 67% of US equities. This growth in the proportion of assets managed by institutional investors has also been accompanied by a dramatic growth over the same period in the market capitalization of US listed companies.

Can the Right Statistics Help Us Avoid the Next Titanic Disaster?

by David Schwartz J.D. CPA | Wednesday, April 17, 2013 | All, Change Overview and Rationale, Disclosure Regimes, Traditions

The latest financial crisis was marked by a spectacular lack of understanding about the astounding levels of risk that had been allowed to build up throughout the system. Regulators and risk managers realized after the fact that the data they needed to understand the scale, let alone the nuances, of what went wrong just had not been collected, or was obscured or insufficient. With the benefit of hindsight, and as we move into recovery, it is time to think about what role could new statistics play in heading off the next big market crisis. Claudio Borio of the Bank for International Settlements has put together an interesting treatise exploring the priorities we should be setting for new statistics and data sets that may very well help us avoid the next iceberg.

Be Careful What You Ask For: The Coming Storm of Financial Litigation in the UK

by David Schwartz J.D. CPA | Tuesday, March 19, 2013 | All, Change Overview and Rationale

Regulatory and structural reforms to the UK’s system of financial regulation may have created the conditions for a “perfect litigation storm,” according to a May 2013 client memo from law firm Jones Day. The firm’s memo posits that new powers granted to the Financial Conduct Authority (FCA), successor to the Financial Services Authority, coupled with new self-help remedies for investors and consumers, and new ways to finance litigation could prompt a dramatic increase in legal cases brought against UK financial firms.

Despite Uptick in Settlements Financial Crisis Litigation is Far From Over

by David Schwartz J.D. CPA | Tuesday, March 19, 2013 | All, Change Overview and Rationale

Study finds that settlement activity is up, but the end is not in yet sight. The financial crisis has given rise to record numbers of law suits. But six years on, are we seeing the end of this litigation frenzy? In an effort to answer this question, Fatan Sabry, Eric Wang, and Joseph Mani of […]

Building the Better Mousetrap: Two Views on Regulation and Innovation

by David Schwartz J.D. CPA | Monday, February 25, 2013 | All, Change Overview and Rationale, Formal Regulatory Remedies

“[M]ore than anywhere else in the world, the United States remains a place where a visionary can risk everything on a dream or an idea and have a fair chance of fighting for it. And he or she can do so in an environment where the investors who underwrite that dream are protected.” -SEC Chairman, Elisse Walter

Valentines Day Was No Bed of Roses for SEC and CFTC Heads

by David Schwartz J.D. CPA | Sunday, February 17, 2013 | All, Change Overview and Rationale, Formal Regulatory Remedies

The Senate Banking Committee spent the best part of its Valentine’s Day grilling Fed officials and agency heads about the regulatory implementation of Dodd-Frank. Despite holding the hearings on a day dedicated to romance and love, the Senators certainly did not woo their witnesses with bonbons and soft questioning.

When it Comes to Swaps, Futurization Means Innovation

by David Schwartz J.D. CPA | Tuesday, January 29, 2013 | All, Change Overview and Rationale

As new regulations under Dodd-Frank move swaps from the OTC swaps marketplace into the futures marketplace, exchanges and swap participants have come up with new products that trade as futures, but provide the benefits of swaps transactions. They have also begun to devise swap products that are custom designed, and therefore ill-suited to exchange trading and clearing, and thus are exempt from the new regulations.

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Change Overview and Rationale