Report

• Standards for Financial Stress Tests

  Jun 29, 2011 - Capital and liquidity standards for banks and other financial institutions proved to be inadequate during the financial meltdown of 2008. The severity of the crisis, coupled with deficient data quality, models, risk-management practices and regulatory oversight, rendered those standards meaningless. To prevent this from happening again, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 was passed and, among other mandates, it requires stress tests for individual institutions and the financial system as a whole.  

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• Standards for Rapid Resolution Plans

  May 09, 2011 - The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act), signed into law in July 2010, requires systemically important financial institutions to develop and maintain rapid resolution plans. A rapid resolution plan lays out how a financial institution that is in the process of failing can be sold, broken up or closed quickly and effectively. The Dodd-Frank Act gives regulators discretion over how such plans should be structured and what information they should contain. These standards lay out some of the key attributes of successful rapid resolution plans.  

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• Financial Reform Public Opinion Survey Results: Utah

  May 11, 2010 - The Pew Financial Reform Project commissioned the bipartisan team of The Mellman Group and Voter/Consumer Research, Inc. to conduct a survey of 501 likely 2010 general election voters in Utah. Interviews were conducted by telephone April 26-28, 2010.  

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• Financial Reform Public Opinion Survey Results: Tennessee

  May 11, 2010 - The Pew Financial Reform Project commissioned the bipartisan team of The Mellman Group and Voter/Consumer Research, Inc. to conduct a survey of 600 likely 2010 general election voters in Tennessee. Interviews were conducted by telephone April 26-29, 2010.  

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• Financial Reform Public Opinion Survey Results: Massachusetts

  May 11, 2010 - The Pew Financial Reform Project commissioned the bipartisan team of The Mellman Group and Voter/Consumer Research, Inc. to conduct a survey of 600 likely 2010 general election voters in Massachusetts. Interviews were conducted by telephone April 19-21, 2010.  

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• Financial Reform Public Opinion Survey Results: Maine

  May 11, 2010 - The Pew Financial Reform Project commissioned the bipartisan team of The Mellman Group and Voter/Consumer Research, Inc. to conduct a survey of 500 likely 2010 general election voters in Maine. Interviews were conducted by telephone April 26-28, 2010.

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• Financial Reform Public Opinion Survey Results: Arkansas

  May 11, 2010 - The Pew Financial Reform Project ommissioned the bipartisan team of The Mellman Group and Voter/Consumer Research, Inc. to conduct a survey of 600 likely 2010 general election voters in Arkansas. Interviews were conducted by telephone April 20-23, 2010.  

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• The Impact of the September 2008 Economic Collapse

  Apr 28, 2010 - The latest report from the Pew Financial Reform Project found that U.S. households lost on average nearly $5,800 in income due to reduced economic growth during the acute stage of the financial crisis from September 2008 through the end of 2009. Also, the combined peak loss from declining stock and home values totaled nearly $100,000, on average per U.S. household, during the July 2008 to March 2009 period. This analysis highlights the importance of reducing the onset and severity of future financial crises, and the value of market reforms to achieve this goal.

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• Pew Financial Reform Project National Poll: Major Findings

  Mar 25, 2010 - A poll of 1,000 likely 2010 general election voters was conducted on March 4-8, 2010 by the bipartisan polling team of The Mellman Group and Ayres, McHenry & Associates. The poll has a margin of error of ± 3%. 

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• Policy Issues Concerning the Reform of the Credit Rating Agencies

  Nov 19, 2009 - This brief focuses on the role of the credit ratings agencies (CRAs) in the securitization process and the options for reform. Despite the recent financial crisis, most regulators appear intent on continuing to rely on CRA ratings for overseeing the institutions they supervise.

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• The Case for an Orderly Resolution Regime for Systemically-Important Financial Institutions

  Oct 21, 2009 - The Obama Administration has proposed that the government be given special authority to resolve a nonbank financial institution if its failure could have serious systemic effects. This new Orderly Resolution Regime (ORR) is needed because the existing regime confronts US economic and regulatory authorities with two very unappealing options: allow the institutions to go into corporate bankruptcy, thereby accepting the associated systemic risk, or to weigh in (often over a weekend) with a large government rescue.

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• Systemic Risk in the Financial System: Insights from Network Science

  Oct 21, 2009 - Systemic Risk in the Financial System: Insights from Network Science looks at systemic risk from the perspective of network structure, and the connectivity links between actors in the financial system.

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• Reassessing the Regulatory Role of the Fed: Grappling with the Dual Mandate and More?

  Oct 06, 2009 - Many observers have proposed new regulatory content, specifically macro prudential regulatory powers, which would vary prudential standards over time to rein in financial system risks before they become too inflated.  Others have pointed to problems in the existing structure of regulation, especially the need to divest the Fed of its day-to-day authority over regulation and supervision.  

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• Managing Systemic Risks

  Oct 06, 2009 - "Managing Systemic Risks" begins with a working definition of systemic risk as "a systemic risk is a risk that an event will trigger a loss of confidence in a substantial portion of the financial system that is serious enough to have adverse consequences for the real economy." It focuses on an operational definition of systemic risk management as a combination of six specific things that governments can do.

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• Consumer Financial Protection: Advantages, Dangers and Should it be a New Agency?

  Sep 29, 2009 - Widespread consumer credit defaults help make it clear that improved consumer protection is needed.  Had there been better protection prior to the financial crisis this would have ameliorated the severity of the crisis and might even have forestalled it.

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• Banking Crises Yesterday and Today

  Sep 29, 2009 - Financial crises appear to be a common and fairly constant feature of the economic cycle. Banking crises, a distinct subset of financial crises, consist either of panics, moments of temporary confusion about the unobservable incidence across the financial system of observable aggregate shocks, or severe waves of bank failures which result in aggregate negative net worth of failed banks in excess of one percent of GDP.

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• Systemic Risk and the Role of the Federal Reserve

  Sep 29, 2009 - In this briefing paper Alice Rivlin recommends that the Federal Reserve not be given any major new regulatory duties over specific institutions, but instead be given responsibility for monitoring the stability of the financial system and new tools to reduce emerging systemic risks.

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• Quantifying the Effects on Lending of Increased Capital Requirements

  Sep 24, 2009 - There is a strong consensus that reform of the financial regulatory system must include significant increases in the capital requirements for banks. All else equal, this should make the banks safer by providing a greater cushion to survive the mistakes and accidents from which they inevitably suffer.

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• Quantifying the Effects on Lending of Increased Capital Requirements

  Sep 24, 2009 - The analysis presented here strongly suggests that the U.S. banking industry could adjust to higher capital requirements on loans through a combination of actions that would not wreak havoc on the system. Not surprisingly, the adjustments would need to come from a set of actions, since the rebalancing appears tough to achieve with any single move. Fortunately, the banks do have a variety of levers to pull which should allow them to make the transition.

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• What Does International Experience Tell Us About Regulatory Consolidation?

  Sep 21, 2009 - In this short paper we look at the structure of international financial regulation in the context of their response to the crisis in order to see what lessons there may be for the US. This is a summary not a detailed research effort, but we believe that even a summary effort could be helpful in order to dispel the idea that the experience of other countries makes it a waste of time to attempt substantial consolidation of regulatory agencies in the US.

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• A G-20 Primer

  Sep 18, 2009 - This background note  provides an overview of the G-20 as a heads-of-state meeting, reviews the outcome of the two recent G-20 meetings, and discusses the agenda for the Pittsburgh meeting and the expectations for what policy outcomes may be achieved there.

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• Comparing the Paulson Blueprint with the Geithner White Paper

  Sep 10, 2009 - In this background note, Gordon McDonald compares certain key elements in the Paulson Treasury's The Blueprint for a Modernized Financial Regulatory Structure with those in the Geithner Treasury's report, Financial Regulatory Reform, A New Foundation: Rebuilding Financial Supervision and Regulation. The main areas addressed include: consumer protection, the role of the Fed, resolution authority, bank regulation, securities and futures regulation, derivatives regulation, credit rating agency reform, securitization reform, executive compensation reform, insurance regulation, housing GSEs reform, and international coordination.

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• How Should We Regulate Derivatives Markets?

  Aug 25, 2009 - This briefing paper provides background on the derivatives markets and their role in the financial crisis, and evaluates aspects of the main reform proposals before Congress. On July 30, 2009, the chairs of the House Financial Services Committee and the House Agriculture Committee outlined their joint principles for new derivatives legislation (the Frank- Peterson principles). On August 11, 2009, the Obama administration released its proposed "Over-the-Counter Derivatives Markets Act of 2009" (the Treasury plan). On June 26, 2009, the House passed the American Clean Energy and Security Act (Waxman-Markey), which would impact a wide range of derivatives.  

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• The Argument Against a Government Resolution Authority

  Aug 18, 2009 - The administration's plan for regulatory reform of the financial system includes a proposal  that existing  government agencies have the authority to resolve failed or failing "systemically important" nonbank financial institutions. In support of this idea, the administration argues that authorizing the government to resolve failing nonbanks financial firms is necessary to assure that these firms are resolved in an "orderly" way. The administration's concern seems to be that allowing a systemically important nonbank financial institutions to enter an ordinary bankruptcy proceeding may be "disorderly," and thus contribute to a systemic breakdown.

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• The Consumer Financial Protection Agency

  Aug 06, 2009 - The Obama administration has proposed restructuring financial services regulation by transferring all consumer protection functions from existing agencies to a new Consumer Financial Protection Agency (CFPA). The goal of the CFPA legislation is to address the flaws in the regulatory architecture that have inhibited effective responses to the substantive problems, rather than mandate specific new substantive consumer protection laws.  

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• Choosing Financial Regulatory Agency Mandates

  Jul 20, 2009 - This note discusses how U.S. legislators can address the difficult problem of choosing between different ways of dividing up the responsibilities of federal financial regulatory agencies.

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• Choosing Financial Regulatory Agency Mandates

  Jul 18, 2009 - This note discusses how U.S. legislators can address the difficult problem of choosing between different ways of dividing up the responsibilities of federal financial regulatory agencies.

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• Defining Systemic Risk

  Jul 08, 2009 - This note argues that before getting into the issues of the organization of systemic risk regulation legislators and regulators need to agree on the nature of the problem.

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• Defining Systemic Risk

  Jul 08, 2009 - In this note, Darryll Hendricks argues that before getting into the issues of the organization of systemic risk regulation that legislators and regulators need to agree on the nature of the problem.

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