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Opinions and views from expert CFOZone members.

Tag >> Regulation
Aug 17
2009

Ticked off about the new uptick rule

Posted by Ron F in TradingRiskRegulationDeals

Ron F

Like John Carney and Floyd Norris, I think short-sellers have been unfairly singled out for blame during the financial crisis by the powers that be.

But restoring a new version of the uptick rule is hardly likely to create serious unintended consequences. I mean, what demonstrable harm did the old one create, and why would the new one suddenly reduce liquidity, whatever that is, and limit price discovery, as Carney claims, when there's no evidence, at least that I'm aware of, that the old one did?

Aug 17
2009

Wells pushed prime borrowers to go subprime: affidavit

Posted by Ron F in RiskRegulationFedCreditBanks

Ron F

Just came across an item in the September issue of Harper's (sorry, no link yet) regarding predatory pricing at Wells.

It's not entirely surprising, of course, and Wells denies it happened. But the first-hand testimony of Elizabeth Jacobson, a former loan officer at a Maryland branch, insists that she and her colleagues discouraged down payments from borrowers who could afford them so that the bank could pile on bigger debt loads.

Aug 16
2009

How the Fed may have helped CIT without dinging taxpayers

Posted by Ron F in RiskRegulationDealsCapitalBanks

Ron F

Looks like the Fed's puzzling message last Friday was clear enough to CIT bondholders to produce some unexpectedly positive results.

As Reuters reports, the beleaguered small-business lender's latest tender offer succeeded in rounding up enough debt today to buy CIT some more time, contary to some analyts' expectations.

Aug 14
2009

Maybe CIT isn’t too small to fail

Posted by MQuinn in RegulationBanking

MQuinn

Just a few weeks ago, it seemed pretty clear that the Federal Reserve wasn't all that concerned about CIT, one of the biggest small business lenders in the country. I'm getting the impression that's changed.

Yesterday, CIT put out a short, succinct press release that it had reached an agreement with the Fed to provide it a plan in regard to its corporate governance, credit practices, capital and liquidity and its businesses. And really, that announcement was just kind of tacked on. The news was seemingly that CIT had adopted a poison pill.

Aug 12
2009

What health-care reform means for employers

Posted by RedConn in RegulationJohn Goffbenefits

RedConn

 

Amid the hysteria, it's hard to come by informed information about health-care reform these days. I saw a recent interview, however, that actually offered some insight into what employers can expect if Congress passes a universal health-care legislation. The Q&A, found on the Wolters Kluwer Health Talk Reform blog (http://healthcare-legislation.blogspot.com/) , was with Kathryn Bakich, the national director of health care compliance at The Segal Company.

Aug 12
2009

The Euros beat the Fed at bank regulation

Posted by Ron F in RiskRegulationCapitalBanks

Ron F

European bank regulators are making the Fed look like a pushover with a move to force their charges to forgo interest payments on hybrid securities. According to an analysis by research firm CreditSights (sorry, no link), the Euros insisting that banks skip payments on preferred stock and other such instruments where contractually possible.

That's a big deal because it makes the securities more like permanent equity than debt, and thus shores up their capital. But it calls into question whether the banks should be able to deduct any interest they've already paid on these securities.

Aug 11
2009

The last word on options backdating?

Posted by Ron F in RegulationFinanceDealscompliancecompensationAccounting

Ron F

This decision should put to rest the argument made in some quarters, including that of libertarians like former SEC commissioner Paul Atkins, that backdated options weren't necessarily a problem for shareholders, if only because they might save a company cash compensation.

I always thought that argument was absurd, if only because higher priced options may save as much cash or more from the tax deductions that companies claim for the Black-Scholes value of the grants than lower priced ones cost in terms of foregone salary.

Aug 11
2009

AIG's Liddy is one executive who knows the value of a dollar

Posted by MQuinn in Regulationmanagementcompensationcareers

MQuinn

Edward Liddy held the top executive spot at American International Group for less than a year. In that time, he returned the ravaged insurer to profitability. And it took everything the ex-CEO of Allstate had to get it there.

"Truth be told, I had no idea what I was in for when I accepted this assignment, but I am glad that I came," Liddy, 63, said in a letter to employees dated Aug. 7, according to Bloomberg. "It hasn't been easy, and goodness knows, it hasn't been pretty."

Aug 10
2009

SEC got fat and lazy, says thin, energetic Spitzer

Posted by RedConn in secRiskRegulationJohn Goff

RedConn

After his inglorious fall from grace, Eliot Spitzer is pretty much the political equivalent of a leper.

Nevertheless, the disgraced New York Democrat who once rode herd on Wall Street during his time as state Attorney General and governor, seems to be staging something of a comeback these days. And he's using a familiar tactic to get his face in front of the public: rabble-rousing.

Aug 06
2009

A vote for Tim instead of Ben or Larry at the Fed

Posted by Ron F in RegulationObama AdministrationBanking

Ron F

Everyone knows Ben's been out on the hustings promoting his own re-appointment, as his term's up next January. I mean, the Fed even has his spiel at the recent town hall gig up on its site.

Also check out his new sartorial get-up. Correct me if I'm wrong, but I've never seen him wear anything but funereal black or pin-striped, non-trading-banker gray before, have you? And that four-in-hand's got a very rakish dimple I don't recall seeing before either. I mean, the guy's starting to dress like a Democrat for God's sake.

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