Tagged: Morin Center for Banking and Financial Law

Brown gets reform bill changed

June 30th, 2010 in Banks 0 comments

Scott_BrownBy 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

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Wall Street reform bill threatened

June 29th, 2010 in Banks 0 comments

Sen. Robert ByrdThe 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

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Deadline for financial regulatory reform

June 24th, 2010 in Banks 0 comments

bank genericCongress 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

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Financial regulatory reform showdown

June 21st, 2010 in Banks 0 comments

stock market boardHouse 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

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The FDIC's deposit-insurance limit

June 16th, 2010 in Banks 0 comments

FDIC sealCongressional negotiators working out difference between the House and Senate financial reform bills are hammering out compromises right and left.  One would permanently (and retroactively to January 2008) move from $100,000 to $250,000 the deposit insurance on individual bank accounts.  Law Professor Cornelius Hurley, director of the Morin Center for Banking and Financial Law and a former counsel to the Fed Board of Governors, doesn’t think the raised limit is a good idea.

“Permanently raising the federal deposit insurance ceiling from $100,000 to $250,000 when the Federal Deposit Insurance Fund is over $20 billion in the red is irresponsible. By raising taxpayer-funded deposit insurance coverage … it seems the [banking] lobbyists’ messages are getting through loud and clear.”

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

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Derivatives amendment showdown

June 15th, 2010 in Banks 0 comments

BUSINESS-US-FINANCIAL-ACCOUNTINGEnemies 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

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Geithner urges global financial reform

May 27th, 2010 in Economics 0 comments

Obama Bye Bye Boomers?Treasury Secretary Timothy Geithner is visiting with his European counterparts to say that the U.S. and Europe broadly agree on the need to reform the financial system but that global cooperation is needed.  Law Professor Cornelius Hurley, director of the Morin Center for Banking and Financial Law and a former counsel to the Federal Reserve Board of Governors, says Geithner should be doing less lecturing and more listening in Europe in that the U.S. right now has only a “deeply flawed” legislative proposal to show as its response to the financial crisis.

“The better posture for the U.S. to strike on the international stage would be a willingness to cooperate with ongoing reform initiatives by the G-20, the Financial Stability Board, and others.”

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

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