It is difficult to understand the logic of ignoring a bank's unrealized losses on its banking book, especially when those losses are determinable. Further, it is hard to justify forcing securities holders of the bank to take losses when the accounting regulations deprive them of information that is clearly material.  

Commissioners Uyeda and Pierce produced fairly blistering dissents. The SEC seems to be pushing for a system where the only products available, at least to retail investors, (except behind closed doors) are index funds. The SEC is simply increasing the risks associated with providing advice to retail investors. It's getting to the point that the only information a broker-dealer should give them is "go look it up on the internet."

The fact that hedge funds, for example, are subject to many of the same risks as banks does not mean that bank-like regulation should be applied to them. Banks are regulated because they take deposits from retail investors and some (or maybe all) of their deposits are backed by the FDIC.

The FRB penalty raises the often-repeated question as to the purpose of money fines in situations like this. As a result of its poor risk management the bank (Credit Suisse) lost $5.5 billion and was forced to be acquired by another bank (UBS). Presumably, the responsible individuals have lost their jobs. One can certainly see the benefits of a study and disclosure of what went wrong. But it's hard to see the purpose of the fine. After all, the bank lost a boatload of money and no longer…