One Year After The Great Panic

The setting of standards for financial reporting: Slow going
One year after the great panic, Obama is still new supervisor. Some fear that a focus on improving the economy and health can slow its momentum.

WASHINGTON (CNNMoney.com) - Barely a month after his inauguration President Obama has asked Congress to respond quickly to reform the "antiquated" system of financial supervision and install the "hard, common-sense rules new" traffic on Wall Street .

Now, we are with Obama, to give a major speech on Monday to sign an anniversary of the fall of Lehman Brothers, things have not progressed.

The Congress was reluctant initially moved to a series of changes that are smaller than the examinationpresented. It is likely that the patchwork system of regulation are still almost intact.

Meanwhile, buying, traders and the market, unregulated and complex financial products, which continue to sell insurance saved AIG (AIG, Fortune 500).

None of the solutions proposed by management would be given the conflicts that occur when the bond issuers pay rating agencies to enable them to assess their financial products.

Big Wall Street able to controldetailed examination, but are subject to strict limitations.

One of the most important standards proposals - the establishment of an agency for financial products to consumers, such as mortgages and credit cards - is facing a tough match against lobbyists for the industry. The U.S. Chamber of Commerce of another 2 million U.S. dollars, and probably more to a campaign that has promised to kill him.

And every day that the economy and improving the health care system includes the fight against the Congress on energy, the impetus for the revision ofThe financial system has been lost.

"Time passes and we are at a crossroads," said Travis Plunkett, chief lobbyist of the Federation of American consumers. "If you see a milestone this fall, financial reform dry on the vine."

In his speech Monday, Obama will ask the financial services industry, his efforts to reform and call for swift action, said an administration official support CNN.
What happened?

The more pressure occurred in the spring, when CongressThe legislative changes adopted to eliminate credit card to be buried in support of consumer debt.

However, the Federal Reserve was already too many changes, which apply again next year, and card issuers have been the rise in prices before the new law to strengthen the walks.


The house has seen the most progress. July 31 was 237-185 for a bill must benefit the shareholders the opportunity to vote without having the obligation to discuss their views on compensation for executives.

The bill also authorizes the executive compensation rules, new rules limit the amount of related risk premia, taking home over $ 1 billion in creating assets. However, it contains all of the hardcover, as is called Europe.

The Assembly should decide on further reforms to the end or beginning of SeptemberTo set the month of October, beginning with a bill for the watchdog for consumers.

The Senate is another story. Nothing happened, but the statement of the credit card.

Used by the leaders of the Senate Banking Committee has worked all summer on a bill of radical financial reform. Congress observers say may be published later this month.

The market for health care could promote negotiations on the complex financial proposals for next year.

"IfThe future of banking documents and regulations ... All this is very complicated and will take a long time, "said Brian Gardner, a Washington policy analyst with the investment firm Keefe, Bruyette & Woods.
State the main proposals

Regulation of consumer products: the first and biggest battle is for the creation of the Agency to finance the protection of consumers.

The Agency has the power to review and award information from the banks. Furthermore, to create modelsbased financial products such as fixed rate mortgages to 30 years. Mortgages more complicated would be necessary to clarify how they differ from plain vanilla "financial products.

The industry opposes the standard of supervision. Although little agreement on the need for greater consumer protection, "the debate is the best way to do it," said Scott Talbott, the Financial Services Roundtable, a lobbying group.

In addition, consumers can not speak of a possible compromise - to strengthenConsumer protection services of existing agencies.

Risk of police experts agree that Congress should give more power to the existing regulatory bodies of the largest financial companies excessive loans or other high-risk transactions to continue to advance.

On the table there is a plan to grant more powers to the Federal Reserve to support with the help of other agencies.

But some key players, including the chairman of the Senate Banking Committee Senator Chris Dodd, D-Conn. And the Federal DepositCape Corp, Sheila Bair, unlike the U.S. Federal Reserve has a super-regulator said. Instead, once a strong regulator with agencies anymore.

Many banks and financial institutions to support the idea of a unified system of control. But some analysts believe that the amendment can not be the people the hope of a cure.

"I do not know how they help us," said Douglas Elliott, a former investment banker and now a member of the Brookings Institution. 'It is very difficult for aStep forward and said: I know what you said, but we believe it is false, then keep it. "

The destruction of businesses in difficulty, there is no consensus around the idea that the FDIC, which is now the task of taking over ailing banks, more energy to do the same for large investment firms and insurance companies.

However, the proposal is complicated. On the one hand, most large enterprises, small branches, some of which are regulated by state authorities.

Former Fed ChairmanPaul Volcker, and SEC Chairman Mary Schapiro, who warned that the introduction of a new powerful, the resolution could be "the unintended consequence of a safety net for large institutions that make bad decisions.

Derivatives: The Obama administration is proposing new rules for derivatives, financial products whose value is derived from something else, like stocks or commodities are.

The government wants the big companies that sell products to meet the needs of new capital.They want to be traded Derivatives Clearing - could be that markets to increase transparency, to add the value of derivatives.

However, the exchange of information has been prepared for more frequent and more specialized derivatives are largely unregulated.