The Atlasia Dispatch-Herald News Unit

[Southern Senator North Carolina Yankee]

National News

From the GM’s Desk: Legislation Analysis
Financial Regulatory Reform Bill of 2009 §3(c): Per the GM's understanding of §3(c) of this bill, sponsored by Senator North Carolina Yankee (RPP), the following analysis addresses capital requirements at financial institutions.

The current bill would require any national banking association in Atlasia to hold 25% of their capital as tangible, on-hand assets.

This policy, if implemented, would essentially force the breaking apart of larger, so-called "too big to fail" banks into smaller spin-offs.

If all the Senate wishes to do is level the playing field between bigger banks, that have an implicit, or explicit, federal guarantee on their debt that lowers their cost of capital, giving them a permanent competitive advantage, the maximum the capital requirements ratio would have to be raised to is 15% directed at all financial institutions that have the implied federal guarantee. It would also be effective, at varying degrees, at 10% to 12%.

It should be stressed that this ratio should only be targeted at financial institutions that have implied federal guarantees. The ratio for smaller banks that do not have this advantage should remain at 8%.

In short, the intent of the Senate should dictate the number in this section. The higher the percentage, the harder it will be for larger banks to effectively loan money, while lower percentages will allow for banks to make more, albeit riskier, investments.

Could you explain this, it has left me confused?


For one the current language only applies those new requirments to Investment Banks and Hedge Funds. There is currently an amendment before the Senate which expands it to cover all banks. I take it then that your concerns actually refer to this amendment and not the overall bill. Please clear this up.

I will clarify. When reading the legislation I missed the pre-text of §3. I will enunciate that this 10-15% only refers to banks, brokers, insurance companies or government-sponsored entities that have implied federal guarantees.

EDIT: Not sure it is what you wanted, but that is my current analysis. If you have your own views, feel free to PM me your thoughts and items I could read to back up your points and I will take it into account.

That makes more sense.


To some extent. Splitting these organizations and creating several smaller ones will reduce systemic risk and take "too big to fail" out of our vocab to describe the current situation.

I could support lowering the limits if need be.

It is the prerogative of the Senate. Just laying out the options. You can ensure "too big to fail," but it will limit the amount companies can loan. We can't expect the same speed of growth/innovation as we cutback on certain things. But we can't have unrestrained lending. It's a balance with a give and take.
[/quote]

I know its a tough choice that has to be made. But that is the business we are in, isn't it.

[Southern Senator North Carolina Yankee]

National News

From the GM’s Desk: Legislation Analysis
Financial Regulatory Reform Bill of 2009 §3(c): Per the GM's understanding of §3(c) of this bill, sponsored by Senator North Carolina Yankee (RPP), the following analysis addresses capital requirements at financial institutions.

The current bill would require any national banking association in Atlasia to hold 25% of their capital as tangible, on-hand assets.

This policy, if implemented, would essentially force the breaking apart of larger, so-called "too big to fail" banks into smaller spin-offs.

If all the Senate wishes to do is level the playing field between bigger banks, that have an implicit, or explicit, federal guarantee on their debt that lowers their cost of capital, giving them a permanent competitive advantage, the maximum the capital requirements ratio would have to be raised to is 15% directed at all financial institutions that have the implied federal guarantee. It would also be effective, at varying degrees, at 10% to 12%.

It should be stressed that this ratio should only be targeted at financial institutions that have implied federal guarantees. The ratio for smaller banks that do not have this advantage should remain at 8%.

In short, the intent of the Senate should dictate the number in this section. The higher the percentage, the harder it will be for larger banks to effectively loan money, while lower percentages will allow for banks to make more, albeit riskier, investments.

Could you explain this, it has left me confused?


For one the current language only applies those new requirments to Investment Banks and Hedge Funds. There is currently an amendment before the Senate which expands it to cover all banks. I take it then that your concerns actually refer to this amendment and not the overall bill. Please clear this up.

I will clarify. When reading the legislation I missed the pre-text of §3. I will enunciate that this 10-15% only refers to banks, brokers, insurance companies or government-sponsored entities that have implied federal guarantees.

EDIT: Not sure it is what you wanted, but that is my current analysis. If you have your own views, feel free to PM me your thoughts and items I could read to back up your points and I will take it into account.

That makes more sense.


To some extent. Splitting these organizations and creating several smaller ones will reduce systemic risk and take "too big to fail" out of our vocab to describe the current situation.

I could support lowering the limits if need be.

It is the prerogative of the Senate. Just laying out the options. You can ensure "too big to fail," but it will limit the amount companies can loan. We can't expect the same speed of growth/innovation as we cutback on certain things. But we can't have unrestrained lending. It's a balance with a give and take.

I know its a tough choice that has to be made. But that is the business we are in, isn't it.

It's the business you're in. I just get to slam whatever it is you produce, as it will inevitably hurt someone.
[/quote]

By being the only Senator who cares about economics, I have reserved the right as the Chairmen of Budget, Appropriations, Ways and Means, Energy and Commerce, and as Education, Health and Labor committees to critique all posts of the GM.

"When I first came here, I hated seniority, but I ever year it gets better and better." - Bob Filner

[Southern Senator North Carolina Yankee]

Markets are back...

Financial News

Financial Indicators

• ANSE     896 -8 (0.89%)
• $1 Atlasian = $0.87240 U.S. (-0.01264)
• Crude Oil = $89.62/barrel +1.53 (1.74%)

Analysis:
The ANSE fell as Atlasian clout over global affairs has come under increasing doubt with seeming isolationist policies in recent months.

The Atlasian Dollar fell as global trade imbalances persist and many question the future dominance of the Atlasian dollar as a global currency. The President and Senate should begin to focus on correcting trade and currency imbalances soon.

Oil prices rose sharply with commodities after China’s exports surged in December and imports rose amid signs of accelerating global economic recovery.

You can't legislate away a trade deficit. You can create policies that encourage Economic growth such as investments in Technology and infrastructure(already done), depress the value of the dollar by spending way beyond our means(already accomplished), or you can just restart the deflationary downward spiral. I am sure 25% Unemployement will end the Trade deficit rather quickly, don't you?

[Southern Senator North Carolina Yankee]

Markets are back...

Financial News

Financial Indicators

• ANSE     896 -8 (0.89%)
• $1 Atlasian = $0.87240 U.S. (-0.01264)
• Crude Oil = $89.62/barrel +1.53 (1.74%)

Analysis:
The ANSE fell as Atlasian clout over global affairs has come under increasing doubt with seeming isolationist policies in recent months.

The Atlasian Dollar fell as global trade imbalances persist and many question the future dominance of the Atlasian dollar as a global currency. The President and Senate should begin to focus on correcting trade and currency imbalances soon.

Oil prices rose sharply with commodities after China’s exports surged in December and imports rose amid signs of accelerating global economic recovery.

You can't legislate away a trade deficit. You can create policies that encourage Economic growth such as investments in Technology and infrastructure(already done), depress the value of the dollar by spending way beyond our means(already accomplished), or you can just restart the deflationary downward spiral. I am sure 25% Unemployement will end the Trade deficit rather quickly, don't you?

It isn't necessarily "legislation" that is needed, although I can think of a few things the Senate can do to begin to address currency imbalances. Also, the President has a bully pulpit that can help the issue as well.

For evidence of how well this can work, see here.

Yea. But the problem is the US/Atlasia is not Japan and the dollar isn't the Yen. We have to be fearful in Atlasia because if you poke the currency to much it will blow up. The Dollar is the reserve currency and losing that status could cause the dollar to crash. We want a slow decline, not a one night crash. All I am saying is messing with this is dangerous.

[Southern Senator North Carolina Yankee]

Economic News

Independent Panel Finds Bank Compensation Practices At Fault For Recession
An independent panel has found risky compensation practices at financial institutions to be one of the main causes of the global recession.

The non-partisan panel issued a report outlining the ways in which many large financial corporations promoted short-term profits through compensation packages, without sufficient regard for the risk of long-term losses in the run-up to the crisis. It also stresses the need for government-led reform to ensure that such practices are discontinued or diminished.

One method to shift the focus of compensation practices include compensating employees with awards of deferred stock - shares that they cannot sell immediately. Companies can also include "clawback" provisions requiring employees to repay bonuses if short-term gains curdle into long-term losses. Finally, it is recommended that pay decisions made by independent members of a company's board of directors.

The Office of the GM recommends that the Senate take action to promote such changes in businesses. Some paths to achieve this include government oversight, FDIC action or other means to be assessed at official request.

Lol. This "commission" needs to have it's member's heads examined. This fails to take into account the fact that if it weren't for the Housing Boom 1996-2006 the banks wouldn't have had the risky derivitives to trade. Or the fact that there are macro-economic problems in the US economy that have existed since 2001 that made such a speculatory bubble necessary. To say it is a root cause is a misinterpretation. The speculation in risky derivitives and the accompanying asset bubble was created primarily do to the lack of substantial growth in the real economy so speculation looked like the most promising return on investment unlike in the 90's when the best place to be was in Dow or Nasdaq trading shares of productive companies, not financial schemes. So that was the "root" cause right there.

[Southern Senator North Carolina Yankee]

Regional News

Biweekly Regional Report
Mideast
Reports indicate that labor laws are being violated at a record pace in the Mideast, many instances going unreported. The region should consider passing comprehensive labor reform legislation in the current session to address the current abuses and clarify the law.

Midwest
As previously reported, the Midwest has seen a recent uptick in the crime rate, especially in violent crimes, as the government seems to have collapsed under its own weight. Reform of the police force is needed, offset by taxes, to ensure future stability. Recommendations to this effect can be found in previous comments by this office from December 30, 2009.

Northeast
Reports indicate that the Northeast has the highest rate of obesity in the country, having nearly doubled in the last two decades from 15% to 27%. Laws promoting healthy living habits, as well as programs to help prevent childhood obesity should be considered for the long-term sustainability of health in the region.

Pacific
As previously reported, the Pacific has seen a rapid influx of illegal immigrants, predominantly from East Asia and Mexico, as security at the border and ports have faltered over the past year. Research of the issue and implementation of new training and security protocols is necessary to maintain the integrity and protection of the region and nation. If the region will not take up the issue, it is recommended that the Senate look to address the matter.

Southeast
The Southeast has moved quickly to address its lower-than-expected revenue with the passage of the Southeast Tax Amnest Act, projected to raise $2 billion over ten years; however, the region still must make efforts to exert proper authority over certain areas in order to prevent the continued abuse of the system. Additional recommendations by this office should be looked into for the upcoming initiative ballot.

What are your recommendations?

[Southern Senator North Carolina Yankee]

If you refer to the Southeast, I posted them previously. The tax amnesty was only one of a number of options recommended.

I suggest you repost them then. Otherwise this will never get noticed.

[Southern Senator North Carolina Yankee]

Regional News

Biweekly Regional Report

Southeast
As stated previously, a study of the region's prisons finds that 90% of non-free-range prisons are at or above capacity, with the remaining 10% nearly there. The packed prisons comes at a cost to both the taxpayers and the prisons, burdening the system with growing costs and making it difficult for prisons to account for all prison activities. The region should look into expanding capacity and staffing, lightening restrictions on free-range prisons or reducing penalties for some non-violent crimes.

Experts estimate that the Southeast region will be hit the hardest by rising gas prices as the summer months loom ahead. The Office of the GM recommends movement on the creation of domestic sources of alternative and renewable energy sources to help alleviate the growing pressure on Southeastern families.

Could you explain what free ranger prisons are?

Another thing I would like to know what crimes could be reduced in penalty.

Finally moves to build alternative energy and renewables wouldn't have an effect for years, and would not have an impact on prices this summer. In fact the region already made investments in this years ago, and appearently barring a repeal I don't know about, they have not succeeded.