Tomorrow: Reed to talk on regulatory framework

Interesting factoid in today's NYT:

[T]axpayers are now the biggest shareholders in Bank of America, with about 6 percent of the stock, and in Citigroup, with 7.8 percent.

The story, about the possible nationalization of banks, goes on to note:

[C]leaning up the banks’ bad assets, without extracting a heavy price for the bank managers, shareholders and their lenders, is exactly what Mr. Summers and Mr. Geithner warned against during the Asian financial crisis.

“We told the Asians that they had to be willing to let banks and companies fail,” said Jeffrey Garten, a professor at the Yale School of Management and a top official in the Clinton administration. “We warned that there was great moral hazard if governments just bailed them out.”

“And now,” he said, “we are doing the polar opposite of our advice.”

Meanwhile, Senator Reed's office sends word that he will speak tomorrow on a related topic:

WASHINGTON, DC – Tomorrow, Tuesday, January 27 at 8:30 a.m., U.S. Senator Jack Reed (D-RI), Chairman of the Banking Subcommittee on Securities, Insurance, and Investment, will deliver an important speech on regulatory reform and modernization to the Council of Institutional Investors at the Mayflower Hotel in Washington, DC. 

Reed will outline the steps needed to strengthen the regulatory structure for the financial services industry and restore investor confidence in our financial markets, including: a top to bottom review of the SEC and strengthening the enforcement division; reducing federal charters to prevent regulatory arbitrage; and granting regulators greater visibility into markets and entities that may pose systemic risk to our economy, such as credit derivatives, dark-pools, and hedge funds.

Reed will also touch on legislation he plans to introduce to reform credit rating agencies and help restore confidence in the financial marketplace.

A vocal critic of the SEC’s lack of enforcement during the Bush Administration, Reed has held a series of hearings over the last two years focused on strengthening investor protections; ensuring the transparency of complex financial markets and products; and improving federal oversight of investment banks and securities firms.

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