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Articles tagged with: Systemic Risk

AFR Statement: Federal Reserve Stress Tests Stand or Fall on Regulator Assumptions
June 21, 2018 – 4:07 pm

Stress tests are forecasts based on models. They stand or fall on the approach of regulators, whose assumptions can seriously underestimate bank losses. Before the 2008 financial crisis regulatory models also showed Wall Street was safe, but that turned out to be fantasy.

AFR in the News: Congress to roll back post-crisis rules as banks post record profits (Washington Post)
June 5, 2018 – 2:48 pm

“‘When lawmakers vote for banking deregulation even though banks are raking in record profits, it exposes what is really at work,’ said Lisa Donner, executive director of Americans for Financial Reform. ‘The bank lobby has flooded the political system with money, and is getting a return on its
investment. The result is legislation that makes the financial system less safe and less fair, and puts consumers at greater risk of abuse.’”

AFR in the News: Banks would be freer to trade for profit under Fed proposal (Virginian Pilot)
June 4, 2018 – 10:29 am

“‘The proposal ‘is an attempt to unravel fundamental elements of the response to the 2008 financial crisis, when banks financed their gambling with taxpayer-insured deposits,’ Marcus Stanley, policy director at Americans for Financial Reform, said in a statement. ‘If implemented, these proposals could turn the Volcker Rule into a dead letter.'”

AFR in the News: Fed votes to scale back hated ‘Volcker Rule’ on Wall Street (NY Post)
June 4, 2018 – 10:20 am

“’What is critical is that simplification not undermine the core principle at stake — that taxpayer-supported banking groups, of any size, not participate in proprietary trading at odds with the basic public and customers’ interests,’ Paul Volcker said in a statement…

‘This proposal is no minor set of technical tweaks to the Volcker Rule, but an attempt to unravel fundamental elements of the response to the 2008 financial crisis, when banks financed their gambling with taxpayer-insured deposits,’ said Marcus Stanley, policy director at Americans for Financial Reform.”

AFR Statement: Omnibus Contains Yet More Gifts to Wall Street
March 22, 2018 – 2:27 pm

“The Omnibus budget package contains several policy riders designed to benefit Wall Street investment funds and big banks at the expense of the public. One provision in the omnibus allows Business Development Companies (BDCs), a type of private equity fund sold directly to retail customers, to double their permitted fund leverage from the current 1-1 level (one dollar of borrowed money for each dollar of investor equity) to 2-1. BDCs are already the beneficiary of regulatory exemptions since conventional closed-end mutual funds can only leverage 1-2, or borrow one dollar per two dollars of investor equity…”

S 2155: A Gift to Wall Street!
March 16, 2018 – 3:09 pm
S 2155: A Gift to Wall Street!

Bipartisan majorities in the House and the Senate chose to commemorate the 10th anniversary of the worst financial crisis since the Great Depression by handing the bank lobby a package of deregulatory gifts, increasing the risks to financial stability and the likelihood of consumer abuse, including racial discrimination in lending. This legislation, signed into law on May 24, won’t serve families or communities, nor is it policy that most people support. But Wall Street and its friends in Congress had a tougher time than they ever expected because Americans who know better refused to let the bill pass without a fight.

AFR in the News: Congress rides to the rescue of thriving bankers (Politico)
March 15, 2018 – 10:53 am

“I don’t see the real-world problem [the bill] is trying to solve, except the problem of bankers’ not making enough money,” said Marcus Stanley, policy director at Americans for Financial Reform… [Stanley] said competition alone shouldn’t be the goal. “If we didn’t require airlines to do anything before opening up a new air route, there might be more airlines, but there might be more plane crashes too.”

Letters to Congress: AFR Urges Opposition to H.R. 1116 — A Dangerous Bill Weakening Effective Protections for Consumers and the U.S. Economy
March 13, 2018 – 12:26 pm

AFR sent a letter to members of the House of Representatives urging them to vote in opposition to H.R. 1116, the “Taking Account of Institutions with Low Operation Risk (TAILOR) Act of 2017.”