January 18, 2011Deadlines Missed on Financial-Overhaul Rules
U.S. Economy
The SEC and CFTC are behind on implementing FinReg, report Jean Eaglesham and Victoria McGrane: "Regulators have missed or postponed several deadlines to write rules needed to implement the financial overhaul triggered by the Dodd- Frank law. The Securities and Exchange Commission and Commodity Futures Trading Commission are straining to keep up with the workload of turning the language in last summer's law into regulations in time to begin enforcing some of the new rules this summer. SEC officials postponed at least seven of the agency's self-imposed deadlines related to the law, including revising the definition of an 'accredited investor' to whom higher-risk investments can be sold ... Two of the Dodd-Frank proceedings delayed by the SEC have since been completed."
The FDIC is working on implementing FinReg's "resolution authority" provision, reports Brady Dennis: "An important part of that new tool allows government officials, should a large failure occur, to create a 'bridge' institution that would keep critical parts of a firm operational while it is dissolved and liquidated over time...At the same time, the new powers represent a daunting challenge for the FDIC, which has plenty of experience shutting down troubled firms but has dealt primarily with small banks. Focusing on some of the nation's financial behemoths, observers say, will require a different set of skills ... The Office of Complex Financial Institutions will have a staff of about 150, composed of FDIC employees and outside hires."
We need a new bankruptcy law for state governments to prevent bailouts, writes David Skeel: http://on.wsj.com/fosPib
The administration wants to ease up pressure on China on its currency
http://link.email.washingtonpost.com/r/KYNZS9/EWYE2N/Q3Z1G5/OVEUFP/8R6O2/LE/h
But Sen. Chuck Schumer is introducing legislation targeting China in time for Premier Hu Jintao's US visit, reports Ian Swanson: "Sen. Charles Schumer (D-N.Y.) is using a Sino-American summit to strike at Chinese economic policies. Schumer and two other Democrats announced Monday they will introduce legislation hitting China for currency manipulation just as Chinese President Hu Jintao is set to arrive in the United States for a critical summit with President Obama...Hu downplayed criticism of China’s currency, and sought to turn the table on the U.S. by criticizing the Federal Reserve’s bond-purchasing program, which is meant to stimulate the U.S. economy and lower the unemployment rate."
Revaluing China's currency won't bring the US jobs, writes Mark Wu: "I recently did an analysis of the top American exports to our 20 leading foreign markets, and found little evidence that an undervalued Chinese currency hurts American exports to third countries. This is mostly because there is little head-to-head competition between America and China. In less than 15 percent of top export products -- for example, network routers and solar panels -- are American and Chinese corporations competing directly against one another. By and large, we are going after entirely different product markets; we market things like airplanes and pharmaceuticals while China sells electronics and textiles."
