BU Now » Blanche Lincoln

Financial regulatory reform showdown

Dick Taffe — Mon, 21 Jun 2010 17:37:05 +0000

House and Senate conferees hope to wrap up this week the final version of financial regulatory reform legislation to send to President Obama, with chairmen Barney Frank and Chris Dodd delicately trying to compromises without losing votes for the overall package. What do about the trading of derivatives – the complex financial packages which helped sink the economy – remains up in the air. Law Professor Cornelius Hurley, director of the Morin Center for Banking and Financial Law and a former counsel to the Fed Board of Governors, says the proposal currently in the Senate version but objected to by both the House negotiators and the White House, wouldn’t be the best for taxpayers fearing another bailout but would be better than nothing.

“If derivatives trading is such a socially useful and profitable activity ($23 billion in revenue among the five banks that dominate the market) why can’t it exist outside of bank holding companies? The answer to the question is that it could exist in a different, nonbank setting, but, without the backing of the taxpayers, the activity would have to shed its casino-like features.”

Contact Cornelius Hurley, 617-353-5427, ckhurley@bu.edu

Derivatives amendment showdown

Dick Taffe — Tue, 15 Jun 2010 22:56:36 +0000

Enemies on all sides are coming down on Arkansas Democratic U.S. Senator Blanche Lincoln’s amendment to the regulatory reform bill that would rid banks of their lucrative derivatives business which played such a huge rule in the 2008 financial crash. Law Professor Cornelius Hurley, director of the Morin Center for Banking and Financial Law and a former counsel to the Fed Board of Governors, feels that the only problem with the amendment is that it doesn’t go far enough to drive “toxic” derivatives out of the bank-holding company temple entirely.

“By lodging this casino activity in bank holding company affiliates she runs the risk of the Fed doing in the next crisis exactly what it has done in this one, namely waiving the rigid rules that are supposed to separate banks from their holding company affiliates.”

Contact Cornelius Hurley, 617-353-5427, ckhurley@bu.edu

Senate primary lessons

Dick Taffe — Wed, 19 May 2010 15:54:33 +0000

U.S. Senate primaries — with Republican-turned-Democrat Arlen Specter defeated in the Pennsylvania Democratic primary, Arkansas Democratic Senator Blanche Lincoln forced into a run-off, and a hand-picked GOP candidate beaten by Tea Party favored candidate Rand Paul in Kentucky — may indicate an anti-incumbent mood in the country. But political science Professor Graham Wilson cautions that the Specter loss proves no national trend and the Democrats also saved the late John Murtha’s House seat in Pennsylvania where the Republicans seemed favored.

“However, Paul’s victory does show that within the Republican party the tea party movement is a real force, one that might result in the GOP being encumbered with far right conservative candidates in the November elections. It’s like the reverse image of the McGovernites taking over the Democratic Party in the 1970s.”

Contact Graham Wilson, 617-353-2540, gkwilson@bu.edu