Showing posts with label BIS. Show all posts
Showing posts with label BIS. Show all posts

Monday, June 30, 2008

U.S. Senate confirms 3 new SEC commissioners

According to Reuters,

"WASHINGTON, June 27 (Reuters) - The U.S. Senate on Friday confirmed one Republican and two Democratic nominees to fill open commissioner seats at the Securities and Exchange Commission. Luis Aguilar, a law partner at McKenna Long & Aldridge, and Elisse Walter, a senior executive with the Financial Industry Regulatory Authority, were approved for the vacant Democratic seats on the commission.

Troy Paredes, a professor at Washington University School of Law, was approved for the open Republican spot."

We do not expect much, at this late date, from these new Commissioners. In the SEC's upcoming battle with Treasury and the Federal Reserve Board, having the SEC board at full strength (something the Fed is not) is a small advantage, but will probably be negated.

Under the "Blueprint for Regulatory Reform: A Report from the Treasury Department on Ways to Improve Oversight of the Financial Services Sector" plan announced on Saturday, March 29, 2008, the Securities Exchange Commission and the Commodity Futures Trading Commission would be consolidated. As one blogger put it, "This would be done on the time-honored government principle of when you don’t know what to do, reorganize. ..the plan would actually weaken the SEC and replace some of its functions with industry self-regulation.

Under the heading of locking-the-barn-door-after-the-horse-has-escaped, the plan would create a new Mortgage Origination Commission (MOC) which would, among other .. innovations, set 'minimum educational requirements' for mortgage lenders."

To quote those guys from the Guinness beer commercial "Brilliant!"

We agree with former SEC Commissioner Grundfest, who said that "Cox was right to let the Federal Reserve and Treasury take the lead (in the Bear Stearns bailout), because it would be unseemly for the regulator of financial markets to be involved in a deal where he could be perceived as playing favorites."

Cox is still, in our opinion, the best financial regulator appointed thus far by the Bush Administration.

But it may be too late. The Bank for International Settlements issued a statement this morning that:

"The global economy may be close to a 'tipping point' that could see it enter a slowdown so severe that it transforms the current period of rising inflation into a period of falling prices.

In its annual report, the central bank for central banks said the impact of rising food and energy prices on real disposable incomes, combined with the reduced ability of financial institutions to make loans and high household debt levels may lead to a slowdown in global growth that 'could prove to be much greater and longer-lasting than would be required to keep inflation under control.'"

Of course, we could get lucky...