As you know, Dr. Warren has finally been hired. Her most recent comments have been posted this morning on the White House blog:
Over the past several weeks, the President and I have had extensive conversations about the vital importance of consumer financial protection.
The President asked me, and I enthusiastically agreed, to serve as an Assistant to the President and Special Advisor to the Secretary of the Treasury on the Consumer Financial Protection Bureau. He has also asked me to take on the job to get the new CFPB started—right now. The President and I are committed to the same vision on CFPB, and I am confident that I will have the tools I need to get the job done.
President Obama understands the importance of leveling the playing field again for families and creating protections that work not just for the wealthy or connected, but for every American. The new consumer bureau is based on a pretty simple idea: people ought to be able to read their credit card and mortgage contracts and know the deal. They shouldn’t learn about an unfair rule or practice only when it bites them—way too late for them to do anything about it. The new law creates a chance to put a tough cop on the beat and provide real accountability and oversight of the consumer credit market. The time for hiding tricks and traps in the fine print is over. This new bureau is based on the simple idea that if the playing field is level and families can see what’s going on, they will have better tools to make better choices.
If the CFPB can succeed at leveling the playing field, we can go a long way toward repairing a gaping hole in the budgets of millions of families. But nobody has ever thought or argued that the consumer bureau can fix everything. Lost jobs, stagnant incomes, rising costs for college, dwindling retirement savings—there’s a lot of work to be done.
When she was 16, my grandmother, Hannie Reed, drove a wagon in the Oklahoma land rush. Her mother had died, so she was up front with her little brothers and sisters bouncing around in the back. When I was growing up, she talked about life on the prairie, about marrying my grandfather and making a living building one-room schoolhouses, about getting wiped out in the Great Depression. She was hit with hard challenges throughout her life, but the moral of her stories was always the same: she would solve her problems one at a time by pulling up her socks and getting to work.
It’s time for all of us to pull up our socks and get to work.
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Video: Congressional Oversight Panel's August Report
Complete report and shorter Executive Summary are at the following link:
WASHINGTON, D.C. - The Congressional Oversight Panel today released its August oversight report, "The Global Context and International Effects of the TARP." The report recommends that Treasury collect data on cross-border flows of funds, increase the scope and frequency of stress testing on financial institutions, and collaborate with foreign policymakers on a cross-border resolution regime and for regular crisis planning and financial "war games."
The financial crisis that began in 2007 exposed the interconnectedness of the global financial system. Although the crisis began with subprime mortgage defaults in the U.S., its damage spread rapidly overseas. The Panel found that policymakers were ill-prepared for such a worldwide crisis and that "the internationalization of the financial system has outpaced the ability of national regulators to respond."
Despite the limits of international coordination, most countries ultimately intervened in markets using the same basic set of policy tools: capital injections to financial institutions, guarantees of debt or troubled assets, asset purchases, and expanded deposit insurance. The U.S., however, targeted its rescue very differently than other countries. While most nations targeted their funds to save individual institutions, America simply flooded the markets with money to stabilize the system. Since much of this money accrued to U.S. institutions with extensive international operations, it appears that America's rescue had much greater impact internationally than other nations' rescues had on the U.S.
The Panel made several recommendations, including:
Policymakers need strong, clear data to measure the success of their rescue efforts and to respond effectively to future crises. Treasury gathered very little data on how bailout funds flowed overseas, which makes pinpointing the exact amounts and sources of the flow of cross-border rescue funds impossible. In the interests of transparency and to help inform regulators' actions in an increasingly integrated world, the Panel urges Treasury to collect and report more data about the international flow of TARP funds and to document the TARP's impact overseas.
The Panel believes financial "war gaming" and "stress tests" should be used much more widely. One of America's most powerful tools in the financial crisis, and one that was emulated by other countries, was the Supervisory Capital Assessment Program (SCAP), or "stress tests." On the international level, vigorous stress tests could identify the weakest points of the international financial system and allow policymakers to plan an emergency response. U.S. officials should encourage regular international crisis planning and financial "war gaming."
The crisis revealed the need for an international plan to handle the collapse of major, globally significant financial institutions. A cross-border resolution regime could establish rules that would permit the orderly resolution of large international institutions, while also encouraging contingency planning and the development of resolution and recovery plans. Such a regime could help to avoid the chaos that followed the Lehman bankruptcy and the struggles that preceded the AIG rescue.
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Screenshot
Kindly, piss off, Wall Street. There's a new sheriff in town.