Investor advocates counter that cutting out leveraged loans from the investor protections nearly all other investments enjoy is ridiculous. “Without securities laws, this market becomes a wild west of sorts,” says Andrew Park of Americans for Financial Reform. “The issue is not sophistication. Sophisticated investors couldn’t know themselves that the DOJ was investigating Millennium for Medicare fraud.”
In The News: Are Leveraged Loans Securities? The Answer Could Upend a Trillion Dollar Market (Institutional Investor)
“The International Monetary Fund, the Federal Reserve, and the Bank for International Settlements have been warning of the risk of the growing leveraged loan market for several years. Despite this it has continued to grow,” said Andrew Park, senior policy advisor at the investor advocacy group Americans for Financial Reform.
In The News: Are higher capital requirements bad for the economy? It’s complicated. (American Banker)
“What we hear most from those opposed to higher capital requirements has been fairly qualitative and not grounded in robust data,” said Alexa Philo, a senior policy analyst for the consumer advocacy group Americans for Financial Reform and former Federal Reserve bank examiner. “I have not seen a credible data driven study that makes this case.”
“Cox compares the restrictions on bank M&A with the Herfindahl-Hirschman Index, first developed as a way to calculate concentration in the airline industry,” said Alex Philo, senior policy analyst at Americans for Financial Reform. “The Department of Justice allows this to go up to 2,500 in other sectors, says Cox, but for banks, the limit works out at 1,800, and an acquisition can cause a bank’s index to jump by 200 points.”
In The News: State Farm profits from fossil fuels while canceling fire coverage in California | Opinion (The Sacramento Bee)
Writes AFR’s Caroline Nagy: “The climate crisis is exacerbating our housing affordability crisis. The Federal Housing Finance Agency house price index hit an all-time high in June, pushing the American dream of home-ownership further out of reach. And with homelessness on the rise, record numbers of Americans struggle to secure affordable housing, leading many to move into fire- and flood-prone areas.”
In The News: Bill to Seize Failed Bank CEOs’ Pay Draws Bipartisan Senate Support (The Washington Post)
“There is now bipartisan momentum to pass legislation to hold executives more accountable when Wall Street takes outsized risks that pay off for executives but not the rest of us,” Natalia Renta, senior policy counsel at Americans for Financial Reform, said in an email. “It is a welcome change that some Republicans are finally joining forces with Democrats to advance an important aspect of financial reform.”
In The News: New report about private equity in home health raises red flag, authors say (McKnight’s Home Care)
A new report reveals that the top five private equity firms collected over $850 million in Medicare revenue and operated almost 280 locations in 2020. These findings should sound an alarm bell for antitrust regulators, according to the report’s authors, Diana L. Moss, president of the American Antitrust Institute, and Oscar Valdes Viera, research manager for Americans for Financial Reform. They spoke to McKnight’s Home Care in a Newsmakers podcast.
In The News: American exceptionalism on climate risk amplifies financial instability (Green Central Banking)
“… it’s called climate change because the climate is changing, and much faster than scientists originally anticipated. We cannot merely use past data to predict future climate impacts,” wrote Alex Martin, senior policy analyst at AFR. “We must take a precautionary approach and heed the stern warnings from scientists about our dire current global trajectory. The US will not be spared the effects.”
“Wall Street will face renewed scrutiny from the American public about the privileges it enjoys thanks to a political system that for far too long went along with what the industry wanted, no matter the costs to the rest of us,” said Lisa Donner, executive director of Americans for Financial Reform.
“Blaming deposit insurance itself, however much the rescue of SVB depositors sticks in the craw, would be precisely the wrong reaction to this year’s crisis. The true injustice of the moment lies not in extending deposit insurance but in the paucity of obligations that bankers face in return,” AFR’s Communication Director, Carter Dougherty wrote.