Financial Reform & Risk Management – Financial Services Oversight Council

According to an AP summary of the negotiated consolidated Financial Reform act of 2010, there are 9 major provisions.  These posts will feature commentary on the Risk Management implications of each.

1. OVERSIGHT A 10-member Financial Services Oversight Council made up of the treasury secretary, Federal Reserve chairman, a presidential appointee with insurance expertise, heads of regulatory agencies and a new consumer protection bureau would monitor financial markets and watch for threats.

Does that make you feel safe?  An Oversight Council?  Not me.

Each of the 10 members will be busy protecting their turf.  Any action or proposed action that will damage “their” part of the financial services business more than the rest of the sector will be fought tooth and nail.

Or else, the group will be out to prove that they are really watching.  They will protect us from 10 of the next two financial crises.

More protection might seem like a good idea right now, but no one has any idea how disruptive it will be to the economy to have an committee of 10 fighting to be the one who drives the car of the economy.

And in addition, to date there has been no indication that any of these folks will protect us from the NEXT crisis.  Instead they will be watching out for a repeat of the last crisis.

The next crisis will come from whatever part of the world economy that they are not paying attention to.  Almost by definition.

So my advice is to watch out for yourself.  Do not rely on these folks.  Do your own homework.  Mind your own risks.

How to do that?  Start HERE.

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Explore posts in the same categories: Regulatory Risk, Systemic Risk

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