Despite opposition from other banking agencies, the FDIC wants to penalize banks for compensation packages that are based on bankers taking too much risk. Law Professor Cornelius Hurley, director of the Morin Center for Banking and Financial Law, says it’s too bad the FDIC is unwilling to work with other U.S. and international regulators to find a rational approach to bank-compensation practices.
“At a time of financial crisis such as we are experiencing, it is more important than ever that the regulatory agencies coordinate major policy initiatives. The FDIC apparently disagrees and would prefer to blaze its own trail.”
Contact Cornelius Hurley, 617-353-5427, firstname.lastname@example.org
After Microsoft agreed to market its rival’s browsers alongside its own Internet Explorer, the European Commission settled its last antitrust issues with the software giant. Law Professor Keith Hylton says the deal makes sense to both Microsoft and the European regulators, but he sees a problem looming.
“This settlement may encourage even more aggressive theories of monopolization against Microsoft and other big firms to be brought before the European Commission. It could be viewed by some rivals as an invitation to bring their business grievances to the EC.”
Contact Keith Hylton, 617-353-8959, email@example.com
School of Law Professor Tamar Frankel, an authority on securities law, welcomes the Obama administration’s push for more regulatory oversight for the shadowy market of derivatives and can discuss why it’s important.
“The administration’s new rules for derivatives are welcome. The fact that the people who believed in the market self-limitation are at the helm is salutary. They know the benefits and the weaknesses of market self-regulation.”
Contact Tamar Frankel, 617-353-3773, firstname.lastname@example.org
Fed chairman Bernanke’s call for a broad reworking of how the government regulates the financial system was met with skepticism by finance Professor Mark T. Williams, a former Fed bank examiner, and law Professor Tamar Frankel, a securities law authority.
Williams says Bernanke missed the point.
“The Fed took its eye off the ball. The regulatory framework that oversees our banks cannot be repaired until the most important regulator, the Fed, completes a thorough internal assessment of how they missed the real estate bubble which was the primary driver of our current recession.”
Frankel says consolidating regulatory authority would be a mistake.
“In the 1930s we avoided ‘too-big-to-fail government” by splitting the regulation of banking, insurance, and markets. Now there is a proposal to combine them into one huge regulatory system. I hope that both financial intermediaries and their regulators never again acquire as much power as they do now, and I hope we do not strictly regulate the entire system under one roof.”