News
Proposed Tax Legislation Will Raise a Lot of Eyebrows On Wall Street and in Board Rooms
“These loopholes are bad policy even in the best of circumstances, but it would be unconscionable to allow them to continue if we can use revenue from closing them to avoid the devastating effect sequestration would have on national security, homeland defense, law enforcement, public safety, education and other important priorities”
FASB Tries to Eliminate Shenanigans When Accounting for Repos
On January 15, 2013, the Financial Accounting Standards Board (FASB) proposed changes to accounting standards for repos intended to improve financial reporting disclosures and more properly reflect a company’s obligations and risks. They also will clarify guidance for distinguishing between transactions that are essentially sales that can be moved off the balance sheet and on-balance sheet secured borrowings.
Can the Right Statistics Help Us Avoid the Next Titanic Disaster?
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.
Is the Dodd-Frank “Cure” Worse than the Disease?
“Rather than responding appropriately to the crisis, which would include developing a modern regulatory system with the flexibility to adapt to changes in the global financial system, we instead have been saddled with an increasingly prescriptive and inflexible regulatory environment that is characterized far more by more regulation than by smart regulation.” –SEC Commissioner Daniel M. Gallagher
CFTC May Have No Choice But to Extend Cross-Border Derivatives Implementation
CFTC Commissioner Mark Wetjen has signaled that the CFTC may extend the July effective date for its cross-border derivatives rules. Speaking at a Futures Industry Association conference on March 12, 2013, Wetjen said the European Securities and Markets Authority’s announcement that they would delay their implementation timeline into 2014 creates problems for the CFTC’s own schedule.
Despite Uptick in Settlements Financial Crisis Litigation is Far From Over
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 […]
Book Review. “China’s Superbank,” The Special Role of the China Development Bank
CSFME’s executive director, Ed Blount, has written a new book review for the ABA Banking Journal. Mr. Blount reviews “China’s Super Bank” by Henry Sanderson and Michael Forsythe, in which the authors present what Blount calls a worthy history of the role of the China Development Bank in less than three decades of urbanization.
Be Careful What You Ask For: The Coming Storm of Financial Litigation in the UK
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.
Congress Still Keen on Financial Regulatory Reform
It seems that Congress’s preoccupation with the nation’s financial situation has not proved to be a distraction from financial regulatory reform. Judging from committee announcements and recently introduced legislation, both the House and Senate have fairly aggressive agendas in mind for the 113th Congress. Legislation tweaking swaps regulation, ending too-big-to-fail, and changing SEC rulemaking powers have all been introduced, and the House Financial Services Committee has announced a full schedule of legislative priorities and hearings on a wide range of topics.
The Day Arrives for Mandatory Clearing of Swaps
The first in a series of dates implementing mandatory swaps clearing finally arrived last week. March 11, 2013 marked the date by which swap dealers, major swap participants, and private funds active in the swaps market were required to begin clearing swaps. The March 11 deadline applies to certain index credit default swaps, or CDS, and interest rate swaps that were entered into on or after March 11, 2013.