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News Release
6/30/2010
CONTACT CONTACT: Judy Dugan 213-280-0175 (cell); or Jamie Court, 310-874-9989
Consumer Watchdog Says Average 15% Rate Could Still be Excessive Under Proposed ‘Prior Review’ Rate Regulations Santa Monica, CA -- Anthem Blue Cross of California, under fire for substantial math errors in its proposed health premium increases averaging 25%, has made the minimum possible reduction in reissuing its proposed increases,...
Blog Post
6/30/2010
By Khan Shoieb
My wireless had been knocked out for several hours, so apologies for the blackout. We are about an hour and a half into Session 3 with Goldman, but before discussing what is going on now I'll briefly discuss the AIG session. Cassano, former head of AIG's Financial Products division, was in charge of creating the financial instruments that...
Blog Post
6/30/2010
Posted by Khan Shoieb
Representatives from AIG are asserting good faith and denying that credit default swaps (CDSs) or over-the-counter derivatives were ever sold without due diligence or with lower underwriting standards. Cassano especially is maintaining that the financial instruments are performing well now under vehicles operated by the federal government. Phil...
Blog Post
6/30/2010
Posted by Khan Shoieb
The session with the "experts" is over. It is not entirely clear if the Commission learned anything new, especially considering the disparate views held by each of the panelists. In a telling series of answers, one member asked each of the panelists to rank the causes of the financial crisis. Two said over the counter derivatives were...
Blog Post
6/30/2010
Posted by Carmen Balber
A quick interaction between members of the FCIC as they questioned their first panel of academics on derivatives this morning foreshadows the quagmire commissioners are delving into as they question AIG and Goldman Sachs executives this afternoon, concerning the derivatives deals that ultimately found AIG using taxpayer bailout funds to pay...
Blog Post
6/30/2010
Posted by Khan Shoieb
So far, the questioning has been abstract, about the nature of derivatives and their inherent risk in the market. The Commission is trying to get a better understanding of these financial instruments. While nothing especially controversial has been said so far, the answers from the witnesses seem informed and have depth. It will be interesting to...
Blog Post
6/30/2010
Posted by Khan Shoieb
While opening statements wrap up from our four witnesses, only one witness seems to be defending the stance that over the counter derivatives played "no role" in exacerbating the crisis: Steve Kohlhagen. As questioning starts soon, it will be interesting to see him elaborate on his position.
Blog Post
6/30/2010
Posted by Khan Shoieb
The first round of questioning will be with experts (aka professors) on derivatives. Here are the witnesses: Michael Greenberger Professor University of Maryland School of Law Testimony (PDF) | Video --> Steve Kohlhagen Former Professor of International Finance, University of California at Berkeley Former Wall Street derivatives executive...
Blog Post
6/30/2010
Posted by Khan Shoieb
This morning in Dirksen Senate Building the Financial Crisis Inquiry Commission, a congressionally appointed panel, will be investigating "how the interaction of these two financial giants may or may not have contributed to the causes of the financial crisis," according to the Commission chairman, Phil Angelides. Why is Goldman there?...
Blog Post
6/29/2010
Posted by Carmen Balber
Drivers, homeowners and every other American who expects their insurance policies to be there in an emergency can breathe a sigh of relief that an eleventh hour fix saved consumers from insurance deregulation in the financial reform bill. The bill, as approved last week by the House-Senate conference committee, would prevent a new Federal...