CNN Business (February 14)
The collapse of FTX last November “was a seismic event for the crypto industry” that some called crypto’s “Lehman moment.” We appear to be “entering the Dodd-Frank era of crypto,” as regulators now have “a clearer target and a wave of public outrage to bolster their cause.” Since FTX’s bankruptcy, “state and federal regulators have escalated both their rhetoric and their actions to keep the fast-growing digital asset industry in check — a shift that is, unsurprisingly, not going over great with crypto companies.”
Tags: Actions, Bankruptcy, Collapse, Dodd-Frank, FTX, Lehman, Public outrage, Regulators, Rhetoric, Seismic
New York Times (July 14)
“The median compensation of chief executives at 200 of the nation’s biggest public companies came in at $15.1 million last year, a 16 percent jump from 2011…. The pay packages — including salary, bonus, benefits, stock and option grants — ranged from $96.2 million at Oracle to $11.1 million at General Motors.” Until the SEC determines rules for Dodd-Frank disclosure requirements, however, we won’t know just how excessive these packages are. Corporations should disclose pay gap information so investors, consumers, economists and others can monitor the ratio of C.E.O. pay to regular employee pay, which by some estimates now stands at between 200 and 300 to 1 in the U.S.“The median compensation of chief executives at 200 of the nation’s biggest public companies came in at $15.1 million last year, a 16 percent jump from 2011…. The pay packages — including salary, bonus, benefits, stock and option grants — ranged from $96.2 million at Oracle to $11.1 million at General Motors.” Until the SEC determines rules for Dodd-Frank disclosure requirements, however, we won’t know just how excessive these packages are. Corporations should disclose pay gap information so investors, consumers, economists and others can monitor the ratio of C.E.O. pay to regular employee pay, which by some estimates now stands at between 200 and 300 to 1 in the U.S.
Tags: Benefits, Bonus, Compensation, Disclosure, Dodd-Frank, Executive, General Motors, Options, Oracle, Pay gap, Requirements, Salary, SEC
Washington Post (May 13, 2013)
“It’s been five years since the onset of the financial crisis — the rescue of Bear Stearns in March 2008 — and we still don’t know whether the financial system is safe.” Progress has clearly been made, but whether it’s sufficient or even the right sort remains very much to be seen. “Will Dodd-Frank save capitalism or suffocate it? It may be years before we know.”
Washington Post (April 29, 2013)
Despite the Dodd-Frank financial reforms, JPMorgan Chase, Bank of America, Citigroup and Wells Fargo remain too big to fail. “At $7.8 trillion, their combined assets are half the size of the entire U.S. economy, and they hold more than half of the nation’s $7 trillion in deposits.” It is unlikely that the U.S. government could ever allow any of them to fail.
Tags: Assets, Bank of America, Citigroup, Dodd-Frank, Economy, Financial Reform, JPMorgan Chase, Too big to fail, U.S., Wells Fargo
New York Times (November 20)
Last week, the Treasury Department decided to exempt “certain foreign exchange derivatives from rules under the Dodd-Frank reform law that are intended to reduce risk and increase transparency. The exempted derivatives—instruments known as foreign exchange swaps and forwards—represent a $4 trillion-a-day global market.” This “step back for derivatives regulation” invites new problems and could spur a future crisis.
Last week, the Treasury Department decided to exempt “certain foreign exchange derivatives from rules under the Dodd-Frank reform law that are intended to reduce risk and increase transparency. The exempted derivatives—instruments known as foreign exchange swaps and forwards—represent a $4 trillion-a-day global market.” This “step back for derivatives regulation” invites new problems and could spur a future crisis.
New York Times (May 2)
“Nearly two years after the passage of Dodd Frank, say-on-pay is slowly emboldening investors to question executive pay, most prominently this year at Citigroup, where shareholders recently rejected a $15 million pay package for the bank’s chief executive, Vikram Pandit.” But another Dodd Frank provision has yet to be introduced. The pay-gap provision would require companies to report CEO compensation as a ratio of the company’s median pay. “The delay is disturbing.” The SEC needs to implement this requirement promptly. “The pay-gap ratio is crucial to determining whether executive compensation is excessive and to judging the effect of pay gaps on company performance and the broader economy.”
New York Times (April 1)
Congress just passed the “deeply flawed” JOBS Act. President Obama should not sign this bill which “rolls back important investor safeguards from the post-Enron Sarbanes-Oxley law and the post-financial crisis Dodd-Frank law.” If it becomes law, it “is an invitation to a fresh round of financial malfeasance…sooner or later, investors will be harmed by its heedless weakening of important protections.”
Tags: Congress, Dodd-Frank, Investors, JOBS Act, Safeguards, SOX, U.S.
The Wall Street Journal (July 23)
According to the Journal, the “one significant achievement of the Dodd-Frank law” was the “requirement that regulators break the cartel of ratings agencies that helped ignite the 2008 financial crisis.” The journal does not want to see a retreat, but foot dragging is slowing the process. Ratings cartels systematize risk. Ultimate responsibility for risk should be decentralized to those making the decisions. Credit ratings companies should compete in the market to provide the best analysis.
Tags: Dodd-Frank, Ratings agencies, Systemic risk
Financial Times (July 20)
Dodd-Frank was supposed to be the biggest regulatory overhaul since the Great Depression. One year later, Dodd-Frank’s not living up to its billing. “Plenty of economists, officials and congressional aides think …the reforms have not shaken up Wall Street enough.” Of the 400 required rules, only 55 have been finalized and of 87 required studies, only 32 have been completed. Limited staff have been slowing the process, but so are concerns that the regulations are unneeded and risk slowing a still weak economy. Some are saying that it will take another major crisis to create momentum for real reform.
Tags: Crisis, Dodd-Frank, Economy, Regulation, U.S., Wall Street
Traders Magazine (June Issue)
In the U.S., “the Securities and Exchange Commission is unlikely to take action anytime soon on two of the most important outstanding rule proposals effecting the options industry.” Struggling under the weight of rulemaking for Dodd-Frank, the regulator is “is not even close to ruling on” flash orders and exchange fee caps.
Tags: Dodd-Frank, Exchange fee caps, Flash orders, SEC
