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Supreme Court’s surprise ruling further erodes federal preemption

Managing Editor — Mon, 06 Jul 2009 01:28:53 +0000

Exclusive analysis for FinReg21 by Darrell Delamaide

Perhaps the most surprising thing about the Supreme Court’s surprise decision abridging federal preemption in banking regulation was that conservative Justice Antonin Scalia sided with the liberal wing of the court in the 5-4 decision and wrote the majority opinion.

For 140 years, nationally chartered banks have been able to use federal preemption to shield themselves from prosecution by state attorneys general seeking to enforce their states’ consumer protection laws.

Not-so-free speech: Insurer’s op-ed fuels regulatory debate

Managing Editor — Fri, 24 Apr 2009 19:05:42 +0000

Exclusive analysis for FinReg 21 by Darrell Delamaide

When the chief executive of one of the nation’s best-known insurance companies took to the opinion pages of The New York Times with what looked like an exercise in eating humble pie, he brought to the fore the fierce fight over how this country regulates the insurance industry.

Credit card legislation gaining momentum, but not enough to beat Fed rules

Managing Editor — Fri, 17 Apr 2009 20:47:00 +0000

Exclusive analysis for FinReg21 by Darrell Delamaide

Amid reports that banks are raising credit card fees and rates on consumers, legislation to provide consumers with greater protection is gaining some momentum in Congress – but perhaps not enough to make a difference.

Back to the future with Glass-Steagall?

Managing Editor — Fri, 10 Apr 2009 23:00:00 +0000

Exclusive analysis for FinReg 21 by Darrell Delamaide

Top officials in the UK are discussing whether regulatory reform in that country should include some sort of separation of commercial and investment banking as the United States had under the Glass-Steagall Act.

While several members of Congress in the U.S. have decried the repeal of Glass-Steagall a decade ago and urged its restoration, neither the administration nor the Federal Reserve have suggested that such a separation will be part of reform efforts in this country.

Hedge funds dodge a bullet, likely to remain ‘lightly regulated’

Managing Editor — Fri, 03 Apr 2009 20:56:10 +0000

By Darrell Delamaide, FinReg21 contributor

Hedge funds have often been described in the financial press as “lightly regulated,” and that is likely to continue to be the case even with all the talk of regulatory reform. Though European leaders are always looking for more regulation of hedge funds, the Group of 20 heads of state and government meeting in London this week let them off, well, lightly.

FDIC’s Bair comes out a winner in new bailout, reform measures

manager — Fri, 27 Mar 2009 20:07:40 +0000

Treasury Secretary Timothy Geithner has had a busy week, introducing the details of his three-pronged bailout plan and outlining his plan for regulatory reform, while also taking more heat for the bonuses at American International Group.

While Geithner has been the front man for the administration’s proposals, there is another official who has made her presence felt this week. Sheila Bair, chairman of the Federal Deposit Insurance Corp. has left her fingerprints all over the measures.

Compensation issues take center stage in reform discussions

manager — Fri, 20 Mar 2009 20:07:40 +0000

Compensation at financial institutions will be a key part of regulatory reform efforts. This was on the agenda even before the recent uproar about bonuses to derivatives traders at American International Group, but that controversy ensures it will have high priority.

What regulators are concerned about is that bonuses and other forms of compensation give incentives to managers and traders to take bigger risks than they should. What the current crisis has shown us is that traders are often rewarded for deals that later turn out to be

Greater monitoring of systemic risk

manager — Fri, 13 Mar 2009 21:00:24 +0000

European government leaders are likely to push for greater monitoring of systemic risk as well as for tighter restrictions on all financial institutions, including hedge funds, when the summit of the Group of 20 countries convenes on April 2.

The impending conference follows up on an initial summit in November to address the economic crisis, and will bring to the fore the need for international coordination both in crisis management and in regulatory reform.

Systemic stability is first order of business in regulatory reform

manager — Fri, 06 Mar 2009 16:59:41 +0000

The immediate focus in financial regulatory reform is to designate someone to watch out for systemic stability. The current crisis has revealed yawning cracks in the regulatory structure because none of the watchdog agencies felt responsible for the financial system as a whole. “I’ve talked to several regulators and none of them felt that systemic stability was in their inbox,” says one regulatory attorney in Washington.