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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

Financial regulatory bill agreed on

Dick Taffe — Fri, 25 Jun 2010 20:45:40 +0000

House and Senate conferees finally worked out a compromise bill aimed at reshaping financial regulations to avoid another Crash of ’08, with a final vote set for next week and President Obama expected to sign it by July 4th. As expected: many winners and losers. One controversial provision gives the SEC authority to require stockbrokers to protect their clients’ interest when recommending investments, potentially subjecting brokers to the same fiduciary duty as financial advisers. Law Professor Tamar Frankel, author of “Trust and Honesty: America’s Business Culture at a Crossroad” and authority on securities law, says it’s about time.

“It offers a chance and a challenge for the SEC to become the leader that it used to be from the 1940s until about 1980. It is a chance to bring about a far more reliable financial system and to refocus on productivity rather than betting.”

Contact Tamar Frankel, 617-353-3773, tfrankel@bu.edu

Congress close to financial reg reform

Dick Taffe — Fri, 21 May 2010 20:40:49 +0000

The most extensive overhaul of financial regulations since the 1930s has cleared its big hurdle in the U.S. Senate and how can head to President Obama for a signature after a conference committee works out remaining differences between the House and Senate versions. But former Federal Reserve Bank examiner Mark Williams, who teaches finance in the School of Management and is author of “Uncontrolled Risk” about the fall of Lehman Brothers, cautions that only four of the world’s 30 global financial giants that could take down the world’s economy are covered under this reform bill — yet the problems are globally systemic.

“The U.S. is now in the position to lead again but will need to encourage other nations to follow. Until global uniformity is reached, high systemic risk will remain.”

Contact Mark Williams, 617-358-2789, williams@bu.edu