The Securities and Exchange Commission released a report on the method for how credit rating agencies get their business, something mandated by the Dodd-Frank financial reform law. And just as expected, it showed a serious conflict of interest in the current business model, where rating agencies are paid by the issuer of securities, and have to compete for their business, adding all sorts of distortions into the kinds of ratings they give. A better model, envisioned by Dodd-Frank at first but then put into this study, would allow an oversight board to dole out to qualified ratings agencies the securities that would get rated, removing the conflict of interest entirely.
|By: David Dayen Wednesday December 19, 2012 1:38 pm|
|By: David Dayen Monday October 29, 2012 12:40 pm|
Taibbi is pretty polite about it, but Obama’s defense involves a lot of misdirection. It assumes that Lehman Brothers, by virtue of having failed, was the only financial institution out there responsible for the collapse, rather than an example of industry-wide behavior.
|By: David Dayen Thursday October 11, 2012 6:00 am|
The IMF has released a new study showing that, in essence, the world would be a much safer place if international banks stopped trading in the financial markets.
|By: David Dayen Thursday September 20, 2012 12:00 pm|
The not-as-funny way to make the point Jon Stewart made about the Republican conception of the entitlement society and where it fails to intersect with reality comes from Simon Johnson. The true “moochers” in American life are, not surprisingly, the ones with all the political power and influence, who can grab themselves gifts and goodies from the political class.
|By: David Dayen Thursday September 6, 2012 2:33 pm|
The American Bankers Association, a trade group for thousands of banks headed by former Oklahoma Governor Frank Keating, voted to start a legal entity for this federal campaign cycle, adding millions of dollars into an already overstuffed election.
The ABA entity would reportedly donate to existing Super PACs, so that the member banks can keep their donations secret.
|By: David Dayen Wednesday August 29, 2012 4:20 pm|
Whither the Volcker rule? After a flurry of discussion about it in the wake of JPMorgan Chase’s Fail Whale trades, we’ve heard significantly less of late. In fact, regulators blew through a July deadline on finalizing the Volcker rule. The last word we had was that the deadline was pushed back to the end of the year.
More time means more opportunity for big banks to lobby over various exemptions. And that’s just what they’re doing, attempting to take a little loophole they found in the initial language and blow it wide open.
|By: David Dayen Saturday August 18, 2012 1:00 pm|
If I thought that the Administration were dragging their feet on regulatory matters for political reasons I would say something. I think it’s far more likely that they’re dragging their feet because they’re dragging their feet. In other words, they’re not all that interested in regulation. So don’t worry, Senator Portman. Your corporatocracy is in safe hands.
|By: David Dayen Wednesday August 8, 2012 2:14 pm|
On financial regulatory issues, Republicans have recently retreated back to the idea that all we need to do is to ensure adequate capital requirements at the largest banks. If they can handle anything that comes across with their own reserves, then taxpayer money is secure and the free market can sort out everything else.
|By: David Dayen Monday July 23, 2012 9:10 am|
It’s fair to say that former Special Inspector General for TARP, Neil Barofsky plans to become as an important part of the national conversation. In an interview this a.m. Barofsky was unyielding in saying that you cannot view TARP in a vacuum, both in the sense of that being the only emergency support afforded the banks or in the sense of TARP being solely designed to save the banks, and not to help homeowners or spur lending.
|By: David Dayen Thursday July 5, 2012 4:40 pm|
As part of Dodd-Frank, systemically important financial institutions (SIFIs) had to put out “living wills” that explained how they would wind themselves down with the least overall disruption in the event of their failure.