Other People’s Houses provides the clearest explanation yet of how the Financial Crisis of 2008 developed and why it could happen again.
Jennifer Taub is the author of Other People’s Houses: How Decades of Bailouts, Captive Regulators and Toxic Bankers Made Home Mortgages a Thrilling Business. Formerly an Associate General Counsel at Fidelity Investments, she is a leading expert on the Financial Crisis of 2008, and is a frequent commentator on corporate governance and financial reform matters. Taub is a graduate of Harvard Law School and Yale College and an associate professor at Vermont Law School, where she teaches Contracts, Corporations, Securities Regulation, and White Collar Crime. She resides in Northampton, Massachusetts.
a blog on banking, corporate governance, and financial market reform.
March 6, 2014
Craving perspective on the state of financial reform generally and the implementation of the Volcker Rule in particular? If so, I recommend “When Regulation Threatens, Bankers Predict Doom for Main Street,” published yesterday on ProPublica by Pulitizer Prize-winning journalist Jesse Eisinger.
Masterfully simplifying the complex, Eisinger provides a view of one of the tactics successfully employed by the financial services industry to remove rules freshly issued under the Dodd-Frank Act. In this piece, Eisinger offers specifics concerning the Volcker Rule implementation. (For backgrounder on the Volcker Rule, see our previous Perpetual Crisis blog post: ”Volcker Rule: A Tall Order and a Small Victory“).
Minimal expertise is needed to grasp why this is important:
“Even for those who don’t know a C.L.O. from the Electric Light Orchestra, there is nevertheless a larger point here.Reforming the banking system is a fight that will never end. Banks and their political allies fought financial reform before it was passed. To paraphrase a famous orator: They shall fight it in the courts, they shall fight it with the regulators, they shall fight it in the halls of Congress. They will search ceaselessly vulnerabilities and loopholes. They will sow doubt about the rules. . .Even when they lose, their harassing tactics will have benefits. A distracted Securities and Exchange Commission has failed to complete many important Dodd-Frank rules covering securitization. The agency still has not finalized rules banning conflicts of interests in securitizations to prevent the kind of misrepresentations that banks engaged in with the infamous Abacus and Magnetar transactions.”
Professor Jennifer Taub moderating an all-star panel following Senator Elizabeth Warren’s keynote address at the “Five Years On, Learning Lehman’s Lessons from the Panic of 2008,” event sponsored by Better Markets and George Washington School of Law. Panelists include (from l to r) Professor James Galbraith; former Special Inspector General of the TARP, Neil Barofsky; Professor John Coffee, Jr.; and former Senator Ted Kaufman.