03.04.2010

|

Updates

Hedge Funds

On Thursday, February 25, the Technical Committee of the International Organization of Securities Commissions (IOSCO) published a template for the global collection of hedge fund information.  SEC Commissioner Kathleen Casey is the chair of the Technical Committee of IOSCO.  The IOSCO template is aimed at enabling “the collection and exchange of consistent and comparable data amongst regulators and other competent authorities for the purpose of facilitating international supervisory cooperation in identifying possible systemic risks in this sector.”

Regulatory Reform

On Friday, February 26, the Federal Reserve Governor Daniel Tarullo spoke to the U.S. Monetary Forum about financial regulatory reform, the need for reduced systemic risk, and a framework to address financial institutions that are “too big to fail.”  Tarullo also noted that such regulatory reform would, based on current proposals, extend to firms not currently regulated, such as those that do not own commercial banks.  Tarullo emphasized that the ultimate goal should be a stable financial system that fosters economic growth.
 
International Developments

Also on Friday, February 26, a special committee on Financial, Economic and Social Crisis of the European Parliament held a hearing on the economic crisis and financial regulation.  The experts at the hearing, including Christian Noyer, Governor of the Banque de France, the French central bank, stressed the need to increase capital requirements, reform credit rating agencies, and harmonize definitions of financial instruments.

On Monday, March 1, the International Swaps and Derivatives Association, Inc. (ISDA) jointly submitted a letter with market participants and industry associations to global supervisors in order to describe how the industry will work to further strengthen the robustness of the over-the-counter derivatives market, encourage further transparency, and enhance the risk management framework.  The letter outlines the fact that the industry is committed to central clearing, transparency, standardization and operational efficiency, and bilateral collateral arrangements.
 
Consumer Financial Protection

More recently, on Wednesday, March 3, House Financial Services Committee Chairman Barney Frank (D-MA) issued a statement clarifying the fact that he does not support "housing the Consumer Financial Protection Agency in the Federal Reserve."  He would, however, entertain the idea of "housing this important function in the Treasury Department," provided sufficient independence is ensured.

Consumer Credit

Also, on Wednesday, March 3, the Federal Reserve Board proposed a rule amending Regulation Z, the Truth in Lending Act, in order to protect credit card consumers from unreasonable late payments or other penalties and to require credit card issuers to reevaluate any interest rate increases.  The provisions included in the proposal will go into effect on August 22, 2010.  This proposal is the third stage of the Federal Reserve's implementation of the Credit Card Accountability Responsibility Disclosure Act of 2009 (Credit CARD Act), which was enacted in May 2009.