Wednesday, June 17, 2009

S&P Cuts Ratings on 18 Banks – Pres. Obama’s Financial System Overhaul

Eighteen banks have had their ratings cut by Standard & Poor’s including Wells Fargo, Capital One, BB&T and others HERE. Cited is a dramatically changing financial landscape and structural transformation.

President Obama released his plan to regulate finanacial institutions calling it the greatest regulatory transformation since the Great Depression.

The Federal Reserve will have to get prior approval from the Treasury on extension of credit under extraordinary circumstances. Hedge funds will have to register with the SEC.  No more shopping for regulator of choice by financial institutions. “Fine print on mortgage applications will be a thing of the past,” said Obama. The Federal Reserve would be granted new authority over bank holding co’s. & other large firms that pose risk to economy in event of failure.

Obama calls for a “new and powerful agency charged with just one job: looking out for ordinary consumers.” Free market is most powerful generative force for prosperity – but is not a free license to ignore consequences of our actions.”

Posted By Valerie Garner

Categories: Business, Finance

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