Barry Ritholtz ('Bailout Nation' author) grades today's financial regulatory reform

[swag]

http://www.ritholtz.com/blog/2010/06/grading-financial-regulatory-reform/

This morning, we learned of a huge compromise in regulatory reform. The expectation was that no one was happy with the bill, but the politicians, who all get to go home to the voters and say “Well, at least we passed something.”

Overall, I give this a C minus: There are simply too many Fs to give them a much higher grade. Let’s look at what was passed and grade each section of reform:

TOO BIG TO FAIL: Grade: F

The new regulation does not directly address either the repeal of Glass Steagall or TBTF. The crisis legacy is a financial services sector that is highly concentrated with dramatically reduced competition. The six largest financial firms — combined assets: $9.4 trillion — will still dominate the industry. Too-Big-to-Fail remains the law of the land.

MORTGAGE UNDERWRITING STANDARDS: Grade A

Establishes new minimum underwriting standards for mortgages. No more no doc, NINJA, or Liar loans. Lenders must verify income, credit history and job status. Would ban payments to brokers for steering borrowers to high-priced loans. Of all the regulatory changes passed today, this seems to be the only one that, if in place a decade ago, would have prevented (or at least dramatically reduced) the crisis.


much more at the link:

http://www.ritholtz.com/blog/2010/06/grading-financial-regulatory-reform/

[taught_me_patience]

1. This is a great summary.

The market also graded the financial reform...








A+ - For the banks.

[Oregone]

2. I wonder how long it'll be until entrenched capitalists hack away those new standards