Iris Mack's Blog - Financial Reform and Regulations

Warning Issued on Brokerage Accounts

Tue, 14 Aug 2012 17:26:00 --0100

Former money manager Ann Barnhardt, who in November of 2011 made the decision to cease operations of her brokerage firm and return funds to her customers citing ?systemic? problems within the entire financial industry, has issued a new warning about the stability of US banks and the safety of individual deposit accounts.

Danger Lurks in Money Funds

Tue, 14 Aug 2012 17:22:00 --0100

SEC Chairwoman Schapiro believes money market funds, which hold commercial paper, short-term bonds and other assets with maturities of a year or less, could destabilize the financial system like the bad old days of 2008 because they're vulnerable to bank-style runs.

Dodd-Frank Financial Regulations: Credit-Card Complaints to Be Available Online

Tue, 19 Jun 2012 14:26:00 --0100

The Consumer Financial Protection Bureau is launching on Tuesday the first part of an online database of complaints from customers in the $2.05 trillion industry. The database will list searchable information about individual complaints, including the name of the company responsible for the credit card, the type of complaint and the customer's ZIP Code. Some industry officials say that the database exceeds the powers Congress gave the new agency, which was formed by the 2010 Dodd-Frank financial-overhaul law.

Bloomberg: Foreign Wealth Managers Shun American Money

Wed, 09 May 2012 14:24:00 --0100

?I don?t open U.S. accounts, period,? said Su Shan Tan, head of private banking at Singapore-based DBS, Southeast Asia?s largest lender, who described regulatory attitudes toward U.S. clients as ?Draconian.? A 2010 law, to be phased in starting Jan. 1, 2013, requires financial institutions based outside the U.S. to obtain and report information about income and interest payments accrued to the accounts of American clients. It means additional compliance costs for banks and fewer investment options and advisers for all U.S. citizens living abroad, which could affect their ability to generate returns. ?In the long run, if Americans have less and less opportunities to invest overseas, it would be a disadvantage,? Marc Faber, the fund manager and publisher of the "Gloom, Boom and Doom" report, said last month in Singapore. Please read more here.

SEC Blows Whistleblower's Cover in "Dark Pool" Investigation (video)

Sun, 29 Apr 2012 16:31:00 --0100

Alright, way to go SEC! No one will come forward with information if they fear the SEC will out them.

Reuters: Citigroup Sued Over Outsized Executive Pay

Sat, 21 Apr 2012 02:39:00 --0100

Citi CEO Vikram Pandit and the bank's directors have been sued for allegedly awarding outsized pay to top executives. Shareholders won the right to vote on executive pay at most public companies under the 2010 Dodd-Frank Act. Please read more here.

An FDA for Financial Innovation: Applying the Insurable Interest Doctrine to Financial Markets

Sun, 01 Apr 2012 13:31:00 --0100

A financial innovation regulator? Perhaps a good idea. Only problem is that the U.S. regulators (FDA, SEC, EPA, ...) don't seem to have very good track records. Who would work at this new financial innovation regulator? The same bankers that need to be regulated? Come on, who are we kidding here!

Your Tax Dollars at Work: The YWCA Woman at the U.S. Treasury Department

Tue, 06 Mar 2012 20:39:00 --0100

This article in the Economic Policy Journal illustrates some of the problems with U.S. financial regulators. It includes an example of the absurd places U.S. tax money is going, to a YWCA officer turned high level Treasury official.

Reuters: EU Lawmakers Urge Tougher HFT, Commodities Rules

Wed, 15 Feb 2012 13:28:00 --0100

Computerised "algorithms" and high-frequency trading (HFT) have been blamed by critics for making markets more volatile, although others say the practice boosts liquidity. The EU's executive European Commission has proposed new curbs on computerised trading, like monitoring access to markets, as part of its wider reform of securities markets known as MiFID II. Please read more here.

Ex-Lehman Brothers Trader: Only On Wall Street Could You "Get Paid So Much For Doing So Little"

Tue, 07 Feb 2012 15:50:00 --0100

Paul Woolley, who founded a center at the London School of Economics that studies "capital market dysfunctionality," put it even more bluntly to the New Yorker in 2010. "Why on earth should finance be the biggest and most highly paid industry when it's just a utility, like sewage or gas?" he said. Please read more here.

UK Guardian: Nationalize the Credit Ratings Agencies

Wed, 18 Jan 2012 03:15:00 --0100

Aditya Chakrabortty of The Guardian writes: "Credit rating agencies keep getting it wrong but still make billions. Why don't politicians stand up to them?..... So, the agencies are neither accurate nor merely observers ? yet they bully governments around the world and make billions doing so. The obvious solution would be to take this public service into public hands. Let's have a ratings agency run by the UN, funded by pooled contributions from both lenders and borrowers. It should be the only one to have preferential access to data from corporates and countries. Let's make the ratings business a utility, rather than a semi-cartel that intimidates elected politicians and rakes in excess profits. It's time to break up the bullying double-act." Please read more here.

Bloomberg: Dodd-Frank in One Graph

Sat, 14 Jan 2012 14:23:00 --0100

Karen Weise of Bloomberg writes: "Big portions of the financial reform law are set to go into effect this year. Intended to make corporate practices transparent, the law itself is anything but. The government has yet to spell out the details of most of the 400 new regulations it imposes. A non-headache-inducing guide." So Ms. Weise presents this nice graph to help us understand Dodd-Frank!

Occupy Wall Street: Where's Volcker's Letter?

Mon, 19 Dec 2011 15:39:00 --0100

One of my blog readers was kind enough to forward this information to me - from the Occupy Wall Street financial reform working group.

Bloomberg: U.K. Banks to Split Consumer, Investment Arms

Mon, 19 Dec 2011 14:52:00 --0100

Now if the U.S. can just reinstate the Glass-Steagall Act .....

Re-hypothecation: Legal Loophole That Permits Wall Street to Spend Clients' Money

Fri, 09 Dec 2011 00:28:00 --0100

A legal loophole in international brokerage regulations means that few, if any, clients of MF Global are likely to get their money back. Although details of the drama are still unfolding, it appears that MF Global and some of its Wall Street counterparts have been actively and aggressively circumventing U.S. securities rules at the expense (quite literally) of their clients. Please read more here.