The Case for Structural Reform

From: RegBlog

Natalie Punchak

The bank bailouts of the late 2000s have cost America’s taxpayers at least $21 billion, with comparatively hefty bills for taxpayers in Britain and the Eurozone, according to the Congressional Budget Office (CBO).

In an attempt to reduce the probability of future bailouts, the US, the UK and the EU have proposed structural reforms to separate retail banking from risker investment banking functions. However, these reforms have some critics wondering whether structural separation’s promised benefits will ultimately outweigh its global costs.

eBay faces a federal probe of its Bill Me Later payments service


125 retailers in the Top 500 Guide offer the payment option.

Zak Stambor, Managing Editor

The U.S. Consumer Financial Protection Bureau  is investigating eBay Inc.’s Bill Me Later division for potential consumer abuses related to its practices, the online marketplace disclosed last week in its U.S. Securities and Exchange quarterly earnings filing. Bill Me Later is a subsidiary of eBay subsidiary PayPal.

The federal agency, created in 2011, regulates consumer protection of financial products and services. It informed eBay of the investigation Aug. 7. The online marketplace bought Bill Me Later in 2008. The Consumer Financial Protection Bureau did not immediately respond to a request to explain the specifics of the investigation and eBay provided no details.

New Fed rule could boost bank bond purchases

From: MarketWatch

By Katie Peralta of Medill News Service

WASHINGTON (MarketWatch) — The Federal Reserve is considering a rule that would tighten up liquid asset requirements for U.S. financial institutions, a move that could shift banks’ buying behavior.

The Board of Governors of the Federal Reserve plans to vote Thursday on a proposal that derives from a complex international agreement by the Basel Committee on Banking Supervision. That agreement proposes a liquidity coverage ratio, according to a Fed spokesman.

Nine amazing facts about Janet Yellen, our next Fed chair

From: The Washington Post/WonkBlog

By Dylan Matthews

Janet Yellen will be appointed Fed chair tomorrow. Neil and Ylan already wrote the definitive profile of her, but here are the main things you ought to know going into her confirmation hearings.

1. She is perhaps the most qualified Fed chair in history.

Paul Volcker (center, between Elizabeth Warren and Gary Locke) is the only Fed chair who even comes close to Janet Yellen’s level of experience. (Chip Somodevilla-Getty Images)

Just look at the competition. When he was appointed chairman, Ben Bernanke’s only prior government service was three years on the Fed board and six months as chair of the Council of Economic Advisers (CEA). Alan Greenspan had three years as CEA chair.

British Regulator Plans New Rules for Payday Lenders

From: New York Times


British regulators announced plans on Thursday to impose stiff new rules next year for payday lenders, whose business has grown sharply since the financial crisis.

The new rules in Britain will include requirements that lenders properly evaluate whether a consumer can afford such a loan and to limit the number of times the loan can be rolled over. Lenders also will be required to provide consumers with sources of debt advice before refinancing.

Payday lenders also will be required to include risk warnings in advertisements, which have proliferated on British daytime television, many offering loans of up to £1,000 ($1,620) at a time.