News
SEC Chief Sees Reg Reform and Consumer Protection as One Goal
Despite the legislation’s two-part name, “The Wall Street Reform and Consumer Protection Act,” SEC Chairman Mary L. Schapiro understands financial regulatory reform and consumer protection to be one thing, not two separate goals. In her October 26, 2012 remarks at George Washington University, Chairman Schapiro states that she sees Dodd-Frank, though still a work in a progress, as founded on some very simple guiding principles that benefit all market participants in the long run and are the basis for both sound regulation and consumer protection. According to Schapiro, these principles are:
Full Speed Ahead on the Volcker Rules Says Senior Treasury Official
Despite efforts to delay or prevent them, the Volker Rules are on their way says Treasury Under Secretary for Domestic Finance Mary Miller in remarks to the American Banker Regulatory Symposium. Miller says the five regulators working on the rules have read carefully the 18,000 comment letters on their initial proposal, and expect to issue final Volker Rules perhaps by year end.
UK Chancellor of the Exchequer Voices Concerns Over Volcker Rules
George Osborne, the UK’s Chancellor of the Exchequer, voiced concernsabout the potential negative effects the proposed Volker Rule provisions may have on the liquidity of global funding markets and particularly non-US sovereign debt markets. Osborne communicated these concerns via a January 23, 2012 letter to Fed Chairman Ben Bernanke.
CFPB Launches Its Non-Bank Supervision Program
On January 5, the Consumer Financial Protection Bureau (CFPB) launched its non-bank supervision program. The initiative is mandated by Dodd-Frank, and will be an extension of the CFPB’s bank supervision program that began last July. The program is intended to ensure that banks and non-banks follow federal consumer financial laws.
Will Money Market Reform Rise from the Dead?
As Mark Twain famously said, “The rumors of my death have been greatly exaggerated.” The same can be said for about the rumors of the death of money market reform, following the SEC’s announcement that it’s leaders could not reach consensus on the topic.
Is Your Risk Strategy a True Team Effort?
As companies move beyond managing financial crisis issues, they are turning to a more holistic look at their firms’ governance activities. KPMG recently conducted a study that finds that even with risk management, contingency planning, financial reporting and controls, compliance, internal audit, strategic planning and execution, and board oversight all in place, most respondents were not satisfied that these governance activities are appropriately focused on the greatest risks to their company’s reputation and brand. According to the KPMG survey, coordination and integration of these functions are key to adding real value to dealing with risk hotspots.
SEC Puts the Brakes on Money Market Reforms
In an August 22, 2012 statement SEC Chair Mary Schapiro announced that the much anticipated money market reforms she has championed have hit a wall. It had been expected that the Commission would consider next week options for further reform like a free floating NAV, rather than a firm $1 NAV, perhaps a capital buffer, and a redemption restrictions. Schapiro announced that “because three Commissioners have now stated that they will not support the proposal and that it therefore cannot be published for public comment, there is no longer a need to formally call the matter to a vote at a public Commission meeting.”
Does LIBOR Have a Future?
A discussion paper published on August 10, 2012 by a team commissioned by the UK Treasury’s Chancellor of the Exchequer takes a look at the structure and governance of LIBOR and the corresponding criminal sanctions regime.
IOSCO Wants Feedback on Money Market Reforms
At the request of the Financial Stability Board, IOSCO has published a consultation paper on the potential regulatory reforms of money market funds. The purpose of the consultation paper is to share with market participants IOSCO’s preliminary analysis regarding the possible risks money market funds may pose to systemic stability, as well as possible policy options to address these risks. IOSCO is actively seeking feedback on this preliminary work, and commenters have the opportunity to shape IOSCO’s ultimate recommendations to the FSB.
Money Market Reforms: Have We Done Enough Already?
Ever since the Reserve Primary Fund “broke the buck” in 2008, regulatory reform of money market funds (MMFs) has been an area of intense debate. Following the financial crisis and given the important and pervasive role played by MMFs in the US and global economies, regulators embarked on a two-step process of reforming the regulation of MMFs. In 2010, the SEC approved new regulations intended to address credit quality, liquidity, maturity, and transparency concerns. Since that time, the SEC, legislators, the Fed, and market participants have vigorously debated “step two,” further regulatory measures aimed at reducing the risk of a run on MMFs and providing a cushion against losses. Are these further reforms necessary? Or have we done enough already?