Visa and Mastercard dodged a major bullet as the financial reform signed into law last week didn't regulate debit card network fees, which they collect for each debit card swipe processed through their payment networks. However, the new law will likely reduce debit interchange fees, the fees that merchants pay to banks to process debit card payments from consumers.

As a result, although banks will be negatively impacted by a reduction in debit card fees they receive from merchants, they will also be able to pass on the extra cost to debit card companies and debit card holders.

The main three credit ratings agencies have told Wall Street in recent weeks that underwriters won't be able to use their credit ratings in documents selling asset-backed securities for fear of being sued.

While it has already placed the ABS market on hold and has securitization professionals up in arms, there are several ways for banks to continue to sell ABS going forward.

Credit enhancement used to be the magic tool in securitization to minimize losses and boost the quality of collateralized debt obligations. But as the Abacus deal underwritten by Goldman Sachs has showed, such practices often led to overleveraged, overly risky transactions, which turned into losses for all parties, including banks underwriting CDOs, once the market turned against them.

"Synthetic CDOs bring together a number of different factors which ultimately resulted in catastrophic losses for all involved," said the Aite Group in a report on synthetic CDOs this week. Even underwriters, who often kept super-senior tranches on balance sheets, suffered heavy losses.

Reform of the financial services industry has been slow to come and it is especially true for credit ratings agencies, which have so far come out unscathed from the crisis.

But with the lawsuit against Goldman Sachs regarding the marketing of toxic collateralized debt obligations that received the blessings of ratings agencies, the complacency could soon be gone.

Regulatory reform could ultimately fuel merger and acquisition activity in the financial services sector. But, so far, the lack of clarity on the direction it will take has mostly just hindered deal making.

Still, observers expect there will be many opportunities for deals in 2010 due to continued depressed valuations, divestitures in the insurance sector and additional bank failures. There were 702 problem banks on the Federal Deposit Insurance Corp.'s watch list as of Dec. 31, for instance.

It seems to me that the crappy weather in February is only cited as an excuse for poor performance, but never an explanation for the opposite.

Yes, this Realtytrac report on foreclosures says they may have fallen last month because notices were late, but that fact wasn't reported today in NPR's coverage this morning.

This is as good a summation of our collective problem as I've seen anywhere recently.

And I'm afraid I've not much to add except that it encapsulates about half of what I've been ranting about since even before we started this site last July.

Think Paul Volcker's being too tough on banks? Volcker is a pussycat compared to U.K. regulators.

In its latest move, the Financial Services Authority is threatening to revoke the licenses of banks that fail to comply with its demands regarding bonuses.

My apologies to all the technocrats out there who want us to stick to corporate finance, narrowly defined. But the Republican counter-proposal to Obama's budget is just too ridiculous to pass up in at least one major respect.

As James Kwak points out today, the party recommends that we reform health care the same way we did Wall Street after the Crash of 1929, with an emphasis on more disclosure so consumers can make better informed choices.

One of the major causes of the financial crisis was lenders' ability to move poor quality loans off of their balance sheets without much concern at the time for the consequences.

The ability to indiscriminately securitize assets led to poor lending decisions, yet allowed lenders to keep little or no capital in reserve on the mistaken assumption they retained no significant financial interest in the outcome. And when losses on those assets came home to roost, lenders needed taxpayer bailouts.