In a Streetwise Professor blog post titled, "A Matter of Magnitudes: Making Matterhorn Out of a Molehill," University of Houston finance professor Craig Pirrong discussed the CFTC civil complaint in the Nav Sarao case, along with the affidavit by Cal-Berkeley's Terrence Hendershott. According to Dr. Pirrong, instead of supporting the CFTC's claims that Sarao's actions had a large impact on contributing to the Flash Crash, Hendershott's report "undermines" the CFTC's claims. Rather, Hendershott's two analyses estimate small price impacts from Sarao's activity that are minuscule compared to the

The IRS issued proposed regulations that could limit the ability of hedge funds from operating insurance companies to diminish their tax base. In Notice 2003-34 , the IRS described arrangements in which U.S. taxpayers organize non-U.S. companies to engage in insurance or reinsurance businesses. The insurance companies invest their capital and premiums in high-risk, high-reward investments, whose returns would exceed what would be needed to repay insurance claims. These companies engage in the "active conduct" of insurance businesses (rather than making passive investments), so they are not

The U.S. House Financial Services Subcommittee on Financial Institutions and Consumer Credit held a hearing titled "Examining Regulatory Burdens - Regulator Perspective." The hearing was intended to examine the impact of regulatory burdens on the operations of community financial institutions and the behavior of consumers in the financial marketplace. Additionally, the hearing investigated how federal financial agencies evaluate the costs and benefits to consumers and community financial institutions of the agencies' regulatory, enforcement and supervisory actions. The Subcommittee also

In his remarks before the Fitch Ratings 2015 House View Conference, Counselor to the Secretary of the Treasury for Housing Policy Dr. Michael A. Stegman focused on the RMBS market initiative announced in 2014 by U.S. Treasury Department Secretary Lew. The purpose of the initiative was to help revitalize the private label RMBS market through the development of a benchmark securitization transaction. Dr. Stegman noted that improved post-crisis loan quality and adequate geographical pool diversification would appear to allow for enough reasonable subordination levels to achieve the desired

In their collaborative article in the latest issue of Nautilus, System Logic principal Chris Clearfield and University of California Professor James Owen Weatherall cast further doubt on the CFTC's claim that accused market manipulator Navinder Sarao contributed to the Flash Crash. Clearfield and Weatherall argue that, in looking for a simple cause for the Flash Crash, regulators are asking the wrong question. From the regulators' perspective, "the Flash Crash was a fluke, an idiosyncratic event caused by an unexpected glitch in the markets." To the contrary, Clearfield and Weatherall say: