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E-learning interactive graphic: Regulatory regimes after the 2008/9 financial crisis

November 2009.skills2

The economic crisis has prompted governments across the world to re-evaluate their financial regulatory framework, to try to tackle the causes of, and fallout from, the global downturn. The next 12 months could bring the most dramatic change in financial services regulation in decades.

This interactive graphic provides an overview of the financial regulation framework, both present and proposed, in the United Kingdom (UK); the European Union (EU); and the United States of America (US).

Please note that this interaction is a sample of the education or skills development courses being developed. These samples are available to logged in and registered (free) members – The Financial Regulation Forum is, essentially, a membership site.

Information update: 11 November 2009

Whilst reviewing the slideshow it should be appreciated that much discussion about US regulatory reform is still taking place on Capitol Hill.

Senate Banking Committee: Chairman Sen. Christopher J. Dodd (D-Conn.) introduced a bill which would create three agencies aimed at policing threats to the economy, preserving banks in good health and protecting borrowers from abuse.

The bill would effect an overhaul of government far exceeding the reforms proposed by the Obama administration this summer or those under consideration by the House. It would strip powers from agencies including the Federal Reserve and the Federal Deposit Insurance Corporation, FDIC, and erect in its place an Agency for Financial Stability to police systemic risks; a Financial Institutions Regulatory Administration to oversee the banking industry; and a Consumer Financial Protection Agency would safeguard borrowers and other bank customers.

Dodd is at loggerheads with the administration over his proposal to consolidate banking regulation in a single agency, as well as his desire to limit the reach of the Fed.

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Under the administration’s plan, the Fed would continue to regulate some banks, in part to inform its monetary policy. The FDIC similarly would continue to regulate banks, in part to inform its responsibility to clean up the ones that fail.

There is broad agreement among Democrats that the government needs new power to demand information from financial companies and markets and to place limits on activities that pose risks to the broader economy. The administration wants the Fed to play this role, with advice from a council of other regulators. Dodd’s bill would instead employ a much more powerful version of the council, which would consult with the new banking regulator.

The Dodd bill also would place the Federal Reserve more firmly under the thumb of the administration. The Board of Governors in Washington is appointed by the president, but the 12 regional reserve banks, which implement policy, are private companies with boards chosen by their owners — the commercial banks in each region. Those boards would now be appointed by the Board of Governors, and the chairmen of those boards would require Senate confirmation.

The Securities and Exchange Commission would gain the long-sought power to fund itself by assessing fees on the financial industry, a change designed to alleviate chronic shortfalls.

House Financial Services Committee: Chairman Rep. Barney Frank (D-Mass.), of the House Financial Services Committee favors the administration’s approach. He has said he plans to present a final bill for a House vote by the end of the year, said Tuesday that Dodd’s draft represents welcome progress.

“Obviously the bills aren’t going to be identical, but it confirms that we are moving in the same direction and reaffirms my confidence that we are going to be able to get an appropriate, effective reform package passed very soon,” Frank said.

A regulatory overview is provided in the slideshow. This summary is intended for management to Keep Abreast of … and, for those famliar with this topic, the overview will  provide a review.

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