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Time to shore up financial regulations

21 Jun 2009 - Preaching the News for Sunday

This Sunday's psalm evokes images of distressed mariners crying out for rescue as they sink to the depths. President Barack Obama Wednesday unveiled a plan to bolster the U.S. financial regulatory system so that in the future the government will not be forced to choose between rescuing sinking institutions and financial collapse. Obama said his plan to refashion supervision of the U.S. financial system is needed to fix excessive risk-taking and lapses in oversight that helped push the economy into a prolonged recession. The president blamed the turmoil on a "culture of irresponsibility" that he said had taken root from Wall Street to Washington. The president will push Congress to grant new powers to the Federal Reserve to oversee the economy. The proposal sets out the biggest overhaul of market rules in more than seven decades, adding an additional layer of regulation for the biggest firms. A new Consumer Financial Protection Agency would oversee products from mortgages to credit cards. It would have authority to ban "unfair terms and practices," punish companies for violations with fines and penalties, and write rules to set higher standards for banks and non-bank companies. "We are called upon to recognize that the free market is the most powerful generative force for our prosperity--but it is not a free license to ignore the consequences of our actions," Obama said. But moving his plans through Congress as they are currently written is far from assured, given turf battles among lawmakers and what is sure to be heavy resistance from the financial sector. Obama acknowledged earlier this week that his revamp will be a "heavy lift." Source: Articles by Henry J. Pulizzi and Damian Paletta for the Wall Street Journal and Robert Schmidt and Hans Nichols for Bloomberg

barack obama financial system federal reserve regulation market
Wall Street playing Stall Street on reforms

20 Sep 2009 - Preaching the News for Sunday

This Sunday's reading from the Letter of James offers what many would consider an apt description of what led Wall Street to near collapse this past year: "Where jealousy and selfish ambition exist, there is disorder and every foul practice." On the one-year anniversary of Lehman Brothers' bankruptcy filing, which sparked the meltdown, President Barack Obama traveled to New York Monday to deliver a stern message to Congress and the financial community to follow through on stalled regulatory reforms. Speaking at Federal Hall, steps from the New York Stock Exchange, Obama warned that "normalcy cannot lead to complacency." "There are some in the financial industry who are misreading this moment," Obama said of the improving economy. "Instead of learning the lessons of Lehman and the crisis from which we are still recovering, they are choosing to ignore them." "Hear my words," Obama said. "We will not go back to the days of reckless behavior and unchecked excess at the heart of this crisis, where too many were motivated only by the appetite for quick kills and bloated bonuses." Public opinion would seem to validate the president's concern. According to a new Associated Press-KfK poll, seven out of 10 Americans lack confidence the federal government has taken safeguards to prevent another financial industry meltdown. A British think tank also echoed Obama's message, concluding this week that the lessons of the financial crisis have not been learned. The Institute for Public Policy Research said the rapid return to the financial community's bonus culture shows that real reform has been "very limited." The report warned that unless urgent action was taken, the banking crisis might not be the last of its type. Source: Articles by Alexi Mostrous and Neil Irwin for the Washington Post Staff, Ben Feller and Jim Kuhnhenn for Associated Press, and BBC News

barack obama wall street financial system lehman brothers institute for public policy research
Church memo to Wall Street: Greed is not good

30 Oct 2011 - Preaching the News for Sunday

The reading from the Book of Malachi this Sunday confronts Israel’s religious leaders with this challenge: “Has not the one God created us? Why then do we break faith with one another, violating the covenant of our fathers?” The Pontifical Council for Justice and Peace (PCJP) has created a stir this week with a strongly worded document critical of the world’s financial leaders, writing that the current global crisis “has revealed behaviors like selfishness, collective greed, and the hoarding of goods on a great scale.” The PCJP's "Note on Financial Reform" calls for the formation of a global political authority that would, among other things, possess broad powers to regulate financial markets. The reality of globalization, said the document, necessitates a “gradual, balanced transfer of a part of each nation’s powers to a world authority and to regional authorities. "The economic and financial crisis which the world is going through calls everyone, individuals and peoples, to examine in depth the principles and the cultural and moral values at the basis of social coexistence," the document said. "If no solutions are found to the various forms of injustice, the negative effects that will follow on the social, political, and economic level will be destined to create a climate of growing hostility and even violence, and ultimately undermine the very foundations of democratic institutions, even the ones considered most solid," warned the document. Conservative commentators objected to mass media coverage that linked “the Vatican” with Occupy Wall Street protesters, pointing out that the document was a “Note” from a curial office, nothing near the level of a papal encyclical. In introducing the document, the two senior officials of the PCJP made a similar point. Cardinal Peter Turkson, president of the council, said that the statement was intended to “make a contribution which might be useful to the deliberations of the [upcoming] G-20 meeting.” Bishop Mario Toso, S.D.B., the secretary of the council, said the document was intended to “suggest possible paths to follow.” Sources: Articles by Amy Sullivan for TIME, Philip Pullella for Reuters, George Weigeland Samuel Gregg for the National Review, and Charles Lewis the for National Post

financial system financial reform