The ESA's report is bleak. It is interesting to note that many of the financial sector problems identified in the report are traceable to governmental action. For example, governments forced interest rates down to levels that make lending money unprofitable. Resulting bubbles in asset values are vulnerable to collapse. Governmental borrowing, like that of (but not limited to) Greece is allowed despite the fact that such entities are not financially solid in the long term. The report warns…

SIFMA's brief may actually understates the problems that would be caused by allowing state law claims to be made based on allegations of violations of the rules regarding short selling or other similar matters.  Under federal law, many such violations do not give rise to a private right of action – they can be enforced by the SEC or by the Department of Justice. If alleged violations of such rules are to be the topic of civil litigation in the fifty states, that could make for a fine…

Leaving aside the issue of whether the stay initiatives are good policy for the markets overall, the MFA raises two interesting questions: (i) are the regulators overreaching by (essentially) attempting to amend the U.S. Bankruptcy Code by regulatory fiat?; and (ii) are bank regulators' favoring the entities that they directly regulate (i.e., banks) over market participants generally (i.e., including the buy side). Neither the policy question, nor the questions as to the authority and the…

As a policy matter, protecting whistleblowers who report wrongdoing to the government but not those who report it internally would be a bad result.