Welcome to Financial Reform Light
|May 24th, 2010||
|Contributed by: The Mad Hedge Fund Trader|
|Banking industry lobbyists were popping the champagne bottles in Washington yesterday, as a greatly weakened and enfeebled financial reform bill stumbled across the finish line, coughing and wheezing all the way. It is, of course, a massive bill, which seems to leave no corner of the financial markets untouched, but I'll give a few highlights. |
Derivatives will move to public exchanges and be subjected to margin requirements. Insured banks cannot use their own capital for speculative trading. The SEC is getting into the credit rating business.
For me, the big one is SEC registration of hedge funds with either $100 million or $150 million in assets under management, depending how the slugfest in the conference committee works out. The bottom line: more regulation of everything bringing higher costs of doing business.
And don't run out and buy bank shares because they dodged the bullet, no matter what John Paulson says. A possible double dip recession, another leg down in the real estate market bringing a secondary banking crisis make this a much higher risk bet than it appears.
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