Bipartisan Financial Regulation Coming - Dodd, Shelby in Agreement; SEC Examining Accounting at 19 Largest Banks
Courtesy of Mish
Given that Senators Dodd and Shelby are in "conceptual agreement" on 85% of the bill, it's a certainty that Bipartisan Financial Regulation is on the way.
“We’re making progress; I believe that we’re going to get us a bipartisan bill,” Shelby, of Alabama, told reporters today in Washington. “We’re probably conceptually together on 85 percent” of the bill.
Senate Majority Leader Harry Reid said he expects to bring the financial overhaul measure to the floor this week or next. He said Democrats are looking at dropping a $50 billion fund to wind down big failing companies from the measure.
Unfortunately there are scant details about what is in the bill.
SEC Examines 19 Largest Banks
Inquiring minds are noting SEC is looking into accounting at 19 biggest banks.
The Securities and Exchange Commission is examining whether any of the 19 largest U.S. banks are using an accounting trick that a bankruptcy examiner has said led to the collapse of Lehman Brothers, SEC Chairman Mary Schapiro said Tuesday.
She said the agency has sent letters to the 19 banks, seeking information about any such transactions.
Going forward, "the SEC is determined to become a more effective regulator," she told lawmakers. "We are determined to use the lessons of that experience to be more effective"
The bankruptcy examiner, Anton Valukas, criticized the company and the SEC.
"Although the public had a right to expect that firms like Lehman were being regulated in a meaningful way, in reality, they were not," Valukas told lawmakers. Regulators, he said, missed opportunities to alter Lehman's conduct "before its situation had reached the point of no return."
In his report last month, Valukas disclosed that Lehman put together complex transactions that allowed the firm to sell securities -- mainly those made up of mortgages -- at the end of a quarter. That wiped them off its balance sheet, avoiding the scrutiny of regulators and shareholders. Then the bank quickly repurchased them -- hence the term "repo."
Two lawmakers testified at the hearing that Lehman's meltdown cost school districts, local governments and hospitals millions, forcing them to make cutbacks.
Rep. Anna Eshoo, D-Calif., said 40 municipalities nationwide lost around $1.7 billion after the firm went under. She is introducing legislation that would require the federal government to compensate those governments. Eshoo said San Mateo County, which is in her district, lost $155 million.
Rep. Anna Eshoo, D-Calif is introducing legislation that would require the federal government to compensate those governments.
Anna Eshoo clearly does not know (or does not care) where money comes from. In essence, she wants everyone's taxes to go up because her district was stupid enough to make stupid investments.
What about individuals who invested in Lehman? Then what? Does she want the federal government (taxpayers) to compensate California pension plans as well?
Eshoo is a dangerous fool who needs to be voted out of office.
Mike "Mish" Shedlock