BU Now » Christopher Dodd

Lobbying the financial reform act

Dick Taffe — Wed, 28 Jul 2010 15:52:38 +0000

Intense lobbying is under way over the Dodd-Frank financial regulatory reform act, with federal agencies needing to fill in the details of at least 243 financial rules and conduct 67 studies before implementing the most sweeping such law since the 1930s. Political science Professor Graham Wilson, author of “Business and Politics,” says citizens should be concerned that the interest-group system is massively biased towards representing business interests.

“The regulations that give shape to laws are always crucial. In this case, the massive complexity and detail involved makes the regulations all the more important — and in this process the voices for consumer and taxpayer interests will be few in number compared with those for the financial industry.”

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

Financial regulatory reform passed

Dick Taffe — Thu, 15 Jul 2010 21:01:28 +0000

With the Senate finally passing the complex financial regulatory reform law and sending it to President Obama for his signature, the work now turns to the hundreds of regulations and dozens of studies which must be completed to implement the most sweeping financial reform since the Great Depression. But while regulators work on all of that, says Political science Professor Graham Wilson, others will be watching how it all plays out politically for Obama and his embattled Democrats.

“Combined with health care and the stimulus, this gives Obama a notable legislative record. But unless he and the Democrats can do a better job of explaining to the American people what their plan is for economic recovery, this record won’t be noticed outside the Beltway.”

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

Brown gets reform bill changed

Dick Taffe — Wed, 30 Jun 2010 17:56:48 +0000

By threatening to withhold his vote for the final compromise, Massachusetts GOP U.S. Senator Scott Brown (l.) got the Democratic negotiators on the financial regulatory reform bill to delete a $19 billion fee on large financial institutions to cover costs of implementing the new law. 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 Dems missed the boat by labeling the charge a “tax,” making it vulnerable to read-meat ideological attacks.

“Pure and simple, their charge should be labeled for what it is — a return of the subsidy that taxpayers bestow on the too-big-to-fail banks every day by pledging to their creditors and depositors that if the big banks go bust we collectively will pick up the tab. Senator Brown would have a difficult time refuting this framing of the discussion.”

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

Wall Street reform bill threatened

Dick Taffe — Tue, 29 Jun 2010 16:00:57 +0000

The death of U.S. Senator Robert Byrd (r.) is threatening to delay passage of the sweeping Wall Street regulatory reform legislation until mid-July after it had been on track for House and Senate votes this week. Law Professor Cornelius Hurley, a former counsel to the Federal Reserve Board of Governors and now director of the Morin Center for Banking and Financial Law, says the proposed legislation has been so weakened in compromise efforts to garner enough votes to pass it in the Senate that it might be worth starting over.

“Its demise would have at least two significant benefits: first, it would allow the next Congress to develop a more robust bill, particularly with respect to systemic risk; and, second, it would enable global regulators to press the ‘reset button’ on international harmonization efforts, a vision apparently abandoned by this Congress and this Administration.”

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

Deadline for financial regulatory reform

Dick Taffe — Thu, 24 Jun 2010 19:56:28 +0000

Congress is down to its self-imposed deadline to come up with a financial regulatory reform bill, leaving some of the most controversial provisions — like how to deal with the trading of derivatives — to the final hours. 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 that a Congress that couldn’t bring itself to enact meaningful reform legislation during the height of the financial crisis now seems to be panicking to pass what he sees as deeply flawed bill.

“Having lost the moment to make bold changes, the legislative process has become all about the November elections and very little about sound public policy. Congress may well meet today’s deadline, but we won’t be the better for it.”

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

Financial regulatory reform stalled

Dick Taffe — Tue, 27 Apr 2010 20:06:15 +0000

Acknowledging the political risk of appearing to stall a popular cause, Senate Republicans voted to delay the start of floor debate on the financial regulatory reform bill — at least without some concessions first. Experts from three BU schools — Law Professor Cornelius Hurley, Mark Williams, who teaches finance at the School of Management, and political science Professor Graham Wilson – each sees the reform fight from a different perspective.

Hurley: “By using the balance sheet of the U.S. Treasury and the Fed, the ‘too big to fail’ banks have captured the derivatives market. Separating these banks from their risky derivatives activities will protect the U.S. taxpayer from further abuse.”

Williams: “Without meaningful financial reform, another Lehman-type disaster is only a matter of time. Given what is at risk, it is time for our politicians to realize that they are in the risk-management business and need to act.”

Wilson: “Politically this is all about appearances – who is seen as dragging their feet, representing Wall Street not Main Street or alternatively, not listening to other people’s ideas.”

Contact Cornelius Hurley, ckhurley@bu.edu, 617-353-5427; Mark Williams, williams@bu.edu, 617-358-2789; Graham Wilson, gkwilson@bu.edu, 617-353-2540.

GOP changing tone on financial reform

Dick Taffe — Wed, 21 Apr 2010 17:23:08 +0000

On the heels of the SEC suing Goldman Sachs for fraud, key Senate Republicans are easing up on earlier harsh criticism of financial regulatory reform bills offered by the Democrats. Political science Professor Graham Wilson, author of “Only in America? American Politics in Comparative Perspective,” says the shift makes political sense.

“The political costs of being seen to block reforming the financial system that almost wrecked us could be very high. In fact, it is a tribute to the bizarre nature of the U.S. Senate that two years after the crisis that harmed millions around the world struck it is still a challenge to get any reforms enacted.”

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

Driving derivatives deregulation

Dick Taffe — Mon, 05 Apr 2010 16:39:03 +0000

With efforts to regulate the trading of derivatives stalling in the Senate Banking Committee, members of the Senate Agriculture Comittee are taking a stab at it, hoping to add it to an 0verall financial reform bill the banking panel is crafting. Law Professor Elizabeth Nowicki, both a former SEC attorney and Wall Street lawyer, says unregulated derivatives trading crashed the economy and regulating them is the only way back.

“If Obama truly wants to fix the economy, he needs to make derivatives his priority. Derivatives are truly the Tonya Harding of the economy.”

Contact Elizabeth Nowicki, 617-353-2807, enowicki@bu.edu

Financial reg-reform bill under fire

Dick Taffe — Wed, 17 Mar 2010 16:31:09 +0000

Financial institutions and their allies are gearing up their lobbying effort to weaken Senator Dodd’s proposed financial regulatory reform bill. 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 proposed creation of a separate consumer-protection group within the Fed could be made even stronger.

“The better course is to designate by statute one of the seven Federal Reserve governors as the ‘Consumer Affairs Governor’ and charge that person with clear responsibility for ensuring that the many consumer statutes the Fed has responsibility for are aggressively enforced.”

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