This Week in Financial Regulation, March 6th

This Week in Financial Regulation, March 6th

Rent Check

What good are accountability rules if they aren’t followed? A recent report from the Government Accountability Office found that the Office of the Comptroller of the Currency’s internal documentation and review policies aren’t effectively enforced, opening the possibility for unscrutinized relationships between regulators and the regulated to lead to regulatory capture.

 

News and Commentary

Former Federal Reserve Chairman Paul Volcker is worried about the culture of current financial institutions. In a recent interview, he raised concerns that banks’ focus on profit adds risk to the financial system.

Dean Baker, from the Center for Economic and Policy Research, has proposed a set of financial sector reforms he is dubbing the “Finance Fun Pack”. The reforms are centered on a financial transactions tax and increased transparency for hedge fund agreements with pension funds and university endowments.

Cory Doctorow believes that the era of financialization is coming to an end. With growing debt and diminishing returns on the tactics used by corporate raiders in the past, the financial industry is due for an adjustment.

In his Congressional hearing last week, Federal Reserve Chairman Powell said that financial-market volatility can interfere with economic growth.

Cato’s Diego Zuluaga has highlighted a few financial reforms that could garner bipartisan support. Aimed at improving access to banks among low-income and minority Americans, he recommends eliminating a few specific regulations that make it hard for small banks to thrive.

The American Interest gives the history of the banking industry since the 1950s. As the Federal Reserve gained more authority, the industry became riskier and more concentrated.

 

New Research

Short sales vs foreclosures: A new paper by theĀ Federal Reserve Bank of Philadelphia looks at why more borrowers choose foreclosures, despite their relatively lower sell price, over short sales for their houses.

How have banks changed since the Financial Crisis? The Federal Reserve Bank of New York used a host of different measures to analyze changes in bank holding companies, finding that remain highly complex, albeit slightly less so than in 2007.

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By |2019-03-06T13:32:31+00:00March 6th, 2019|Blog, Financial Regulation|