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Could the Global Legal Entity Identifier Be Useful for Financial Transparency Legislation in the 116th Congress? [October 22, 2019]
From the Overview: "The 116th Congress is examining legislation related to financial transparency. This has come in the form of bills--H.R. 2513, S. 2563, S. 1978, or S. 1889--that would mandate greater disclosures of the natural persons or 'beneficial owners' who benefit from or control a corporation or similar legal entity. Other bills, such as H.R. 4476, seek to promote financial transparency and data standardization among securities, commodities, and banking laws to make information reported to financial regulatory agencies more easily electronically searchable. The global Legal Entity Identifier system, increasingly used in the financial sector since its 2009 inception, but seemingly little known among broader audiences, may be of interest to Congress in light of such legislative activity."
Library of Congress. Congressional Research Service
Miller, Rena S.
2019-10-22
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Climate Change Risk Disclosures and the Securities and Exchange Commission [April 20, 2021]
From the Summary: "Potential risks to the U.S. financial system from climate change have attracted growing attention in government, academia, and media, raising questions about the roles of financial regulators in addressing such risks. [...] The Securities and Exchange Commission's(SEC's)mission is to protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation. As part of this mission, the SEC issued 'Guidance Regarding Disclosure Related to Climate Change' in 2010 to assist publicly listed companies in evaluating when climate change risks require disclosure."
Library of Congress. Congressional Research Service
Miller, Rena S.; Vanatko, Nicole; Shorter, Gary W.
2021-04-20
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Financial Reform: Overview of the Volcker Rule [July 9, 2018]
"Legislators and regulators have long grappled with whether restricting the types of activities banks can engage in, or reforming banks' structures, might reduce the risk of large bank failures and the risk of systemic financial instability, such as that seen in the 2008 financial crisis. The Volcker Rule is an example of a means of addressing this issue. The statutory basis of the Volcker Rule is Section 619 of the Dodd-Frank Act, enacted in 2010 following the crisis. It was conceived of by Paul Volcker, a former Federal Reserve (Fed) chair, and implemented as 'the Volcker Rule' in a 2013 joint final rule by five financial regulators: the Fed, Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC), Securities and Exchange Commission (SEC), and Commodity Futures Trading Commission (CFTC). The Volcker Rule generally prohibits a depository bank (or company that owns one) from engaging in proprietary trading or investing in (or sponsoring) a hedge fund or private equity fund. The rule has been subject to debate and was recently amended through legislative action. Regulators have also proposed further changes to the rule."
Library of Congress. Congressional Research Service
Miller, Rena S.
2018-07-09
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Banking Policy Issues in the 116th Congress [Updated February 21, 2019]
From the Introduction: "Banks play a central role in the financial system by connecting borrowers to savers and allocating available funds across the economy. As a result, banking is vital to the U.S. economy's health and growth. Nevertheless, banking is an inherently risky activity involving extending credit and undertaking liabilities. Therefore, banking can generate tremendous societal and economic benefits, but banking panics and failures can create devastating losses. Over time, a regulatory system designed to foster the benefits of banking while limiting risks has developed, and both banks and regulation have coevolved as market conditions have changed and different risks have emerged. For these reasons, Congress often considers policies related to the banking industry."
Library of Congress. Congressional Research Service
Perkins, David W.; Cooper, Cheryl R.; Getter, Darryl E. . . .
2019-02-21
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Fintech: Overview of Innovative Financial Technology and Selected Policy Issues [April 28, 2020]
From the Summary: "Advances in technology allow for innovation in the ways businesses and individuals perform financial activities. The development of financial technology--commonly referred to as 'fintech'-- is the subject of great interest for the public and policymakers. Fintech innovations could potentially improve the efficiency of the financial system and financial outcomes for businesses and consumers. However, the new technology could pose certain risks, potentially leading to unanticipated financial losses or other harmful outcomes. Policymakers designed many of the financial laws and regulations intended to foster innovation and mitigate risks before the most recent technological changes. This raises questions concerning whether the existing legal and regulatory frameworks, when applied to fintech, effectively protect against harm without unduly hindering beneficial technologies' development."
Library of Congress. Congressional Research Service
Perkins, David W.; Cooper, Cheryl R.; Getter, Darryl E. . . .
2020-04-28
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COVID-19: U.S. Economic Effects [May 13, 2020]
From the Document: "This Insight discusses the current and projected effects of the Coronavirus Disease 2019 (COVID-19) pandemic on the U.S. economy. [...] The economic impacts of COVID-19 since March 2020 have been large and dramatic, with impact disparities between various sectors and regions. In the United States, fear of infection, social distancing, and various states' stay-at-home orders prompted business closures and severe declines in U.S. demand for travel, accommodations, restaurants, and entertainment, among other industries. This has led to massive layoffs, furloughs, and surges in unemployment claims, with predictions for further declines in U.S. gross domestic product (GDP)."
Library of Congress. Congressional Research Service
Miller, Rena S.; Labonte, Marc
2020-05-11
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How Do Bank Regulators Treat Climate Change Risks? [November 25, 2020]
From the Document: "Potential risks to the financial system from climate change have attracted growing attention in government, academia, and media, raising questions about the roles of central banks and bank regulators in addressing such risks. The U.S. central bank, the Federal Reserve (Fed), has responsibilities involving financial stability, monetary policy, and banking supervision. Climate change--defined in a November 9, 2020, Fed report as 'the trend toward higher average global temperatures and accompanying environmental shifts such as rising sea levels and more severe weather events'--may impact each of these. This could occur either through physical risks, such as greater storms and wildfires, or through 'transition risk,' meaning the risk that changed government policies or market perceptions might lead to sudden asset price drops, such as for carbon-emitting industries. The Fed report on financial stability warned that sudden hazards can bring about direct losses that could negatively impact banks' investments. It asserted that even slowly developing hazards such as rising sea levels could lead to sudden price drops for bank investments if abrupt changes in public perceptions about such risks emerges. This Insight focuses on the central bank's role in banking supervision and climate change risks and on what the Fed and other banking regulators have done to address such risks."
Library of Congress. Congressional Research Service
Miller, Rena S.
2020-11-25
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When an Agency's Budget Request Does Not Match the President's Request: The FY2018 CFTC Request and 'Budget Bypass' [June 7, 2017]
"The Trump Administration released its first full budget request on May 23, 2017, for FY2018. Like other recent presidential budget requests, it includes an Appendix chapter for independent agencies such as the Commodity Futures Trading Commission (CFTC). Notably, the Trump Administration's budget request for CFTC does not equal the amount requested directly by the agency in its budget justification submitted to Congress. Specifically: [1] The Trump Administration's FY2018 request for CFTC is $250 million, [2] CFTC's Budget Justification submitted to Congress requests $281.5 million."
Library of Congress. Congressional Research Service
Monke, James; Miller, Rena S.
2017-06-07
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Commodity Futures Trading Commission: Proposed Reauthorization in the 115th Congress [January 10, 2017]
"The Commodity Futures Trading Commission (CFTC), created in 1974, regulates futures, most options, and swaps markets. The CFTC administers the Commodity Exchange Act [CEA] enacted in 1936 to monitor trading in certain derivatives markets. The CFTC was last reauthorized in 2008 as part of the Food, Conservation, and Energy Act, which included authorization of appropriations through FY2013. Although the underlying authority in the statute to administer programs does not have an explicit expiration, the authorization of appropriations only applies through FY2013. As a consequence, the authorization of appropriations assumes Congress will periodically need to act to authorize future appropriations. It has not been uncommon, however, for Congress to continue to fund the CFTC for several years beyond the expiration of previous authorizations of appropriations. The current CFTC reauthorization process is the first since the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 brought the roughly $400 trillion U.S. swaps market under regulatory oversight. Historically, the reauthorization process has often been one of the principal vehicles for modifying the CFTC's regulatory authority and evaluating the efficacy of its regulatory programs. In the 115th Congress, a CFTC reauthorization bill that also would make changes to the CEA-- H.R. 238, the Commodity End-User Relief Act--was introduced on January 4, 2017, by Representative Michael Conaway. The House Rules Committee has scheduled a hearing on H.R. 238 for January 10, 2017. [...] This report examines [...] selected major provisions of H.R. 238."
Library of Congress. Congressional Research Service
Miller, Rena S.
2017-01-10
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Financial Regulatory Reform and the 111th Congress [March 31, 2010]
"Financial regulatory reform is being discussed in the 111th Congress, the continuation of a policy debate that began before the September 2008 financial disruption. For example, Treasury Secretary Henry Paulson issued a blueprint for financial reform in March 2008. In September 2008, after this blueprint was issued but before congressional action, the financial system suffered severe distress as Lehman Brothers and AIG failed. This financial panic accelerated the review of financial regulation and refocused some of the policy debate on areas that experienced the most distress. […] This report reviews issues related to financial regulation. It provides brief descriptions of comprehensive reform bills in the 111th Congress that address these issues. This report will be periodically updated to reflect congressional activity in financial regulatory reform."
Library of Congress. Congressional Research Service
Shorter, Gary W.; Murphy, Edward Vincent; Miller, Rena S. . . .
2010-03-31
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Financial Regulatory Reform and the 111th Congress [April 16, 2010]
"Financial regulatory reform is being discussed in the 111th Congress, the continuation of a policy debate that began before the September 2008 financial disruption. For example, Treasury Secretary Henry Paulson issued a blueprint for financial reform in March 2008. In September 2008, after this blueprint was issued but before congressional action, the financial system suffered severe distress as Lehman Brothers and AIG failed. This financial panic accelerated the review of financial regulation and refocused some of the policy debate on areas that experienced the most distress. […] This report reviews issues related to financial regulation. It provides brief descriptions of comprehensive reform bills in the 111th Congress that address these issues. This report will be updated to reflect congressional activity in financial regulatory reform."
Library of Congress. Congressional Research Service
Webel, Baird; Carpenter, David Hatcher; Labonte, Marc . . .
2010-04-16
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Target Data Breach: Frequently Asked Questions [April 22, 2014]
"In November and December of 2013, cyber-criminals breached the data security of Target, one of the largest U.S. retail chains, stealing the personal and financial information of millions of customers. On December 19, 2013, Target confirmed that some 40 million credit and debit card account numbers had been stolen. On January 10, 2014, Target announced that personal information, including the names, addresses, phone numbers, and email addresses of up to 70 million customers, was also stolen during the data breach. A report by the Senate Committee on Commerce in March 2014 concluded that Target missed opportunities to prevent the data breach. [...] In the wake of Target's revelations, Congress has held seven hearings by six different committees related to these topics between February 3 and April 2, 2014. In addition to examining the events surrounding the Target breach, hearings have focused on preventing such data breaches, improving data security standards, better protecting consumers' personal data, and providing notice to consumers when their data have been compromised. [...]This report answers some frequently asked questions about the Target breach, including what is known to have happened in the breach, and what costs may result. [...] The report addresses policy issues discussed in congressional hearings and describes some of the legislation that the 113th Congress has introduced to deal with these issues."
Library of Congress. Congressional Research Service
Miller, Rena S.; Weiss, N. Eric
2014-04-22
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Dark Pools in Equity Trading: Policy Concerns and Recent Developments [September 26, 2014]
"The term 'dark pools' generally refers to electronic stock trading platforms in which pre-trade bids and offers are not published and price information about the trade is only made public after the trade has been executed. This differs from trading in so-called 'lit' venues, such as traditional stock exchanges, which provide pre-trade bids and offers publicly into the consolidated quote stream widely used to price stocks. […] This report examines the confluence of factors that led to the rise of dark pools; the potential benefits and costs of such trading; some regulatory and congressional concerns over dark pools; recent regulatory developments by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA), which oversees broker-dealers; and some recent lawsuits and enforcement actions garnering significant media attention. These include a 2014 civil suit filed by New York Attorney General Eric Schneiderman against the securities firm Barclays for its dark pool operations. A central allegation was that in marketing materials for prospective investors, Barclays misrepresented the extent and nature of the high-frequency trading in its pool. The report also examines steps regulators in Canada and Australia have taken to address any reduction in price transparency from dark pool trading."
Library of Congress. Congressional Research Service
Shorter, Gary W.; Miller, Rena S.
2014-09-26
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High-Frequency Trading: Background, Concerns, and Regulatory Developments [June 19, 2014]
"High-frequency trading (HFT) is a broad term without a precise legal or regulatory definition. It is used to describe what many characterize as a subset of algorithmic trading that involves very rapid placement of orders, in the realm of tiny fractions of a second. Regulators have been scrutinizing HFT practices for years, but public concern about this form of trading intensified following the April 2014 publication of a book by author Michael Lewis. The Federal Bureau of Investigation (FBI), Department of Justice (DOJ), Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC), the Office of the New York Attorney General, and the Massachusetts Secretary of Commerce have begun HFT-related probes. […] This report provides an overview of HFT in the equities and derivatives markets regulated by the SEC and the CFTC. It also examines the Flash Crash of 2010 and the role that HFT may have played, as well as recent regulatory developments."
Library of Congress. Congressional Research Service
Shorter, Gary W.; Miller, Rena S.
2014-06-19
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'Dark Pools' In Equity Trading: Significance and Recent Developments [August 27, 2014]
"'Dark pools' are relatively recent and controversial electronic stock trading alternatives to traditional exchanges, such as the New York Stock Exchange (NYSE), and now account for about 15% of overall trading volume. A dark pool is a type of 'alternative trading system' (ATS), a broker-dealer who matches the stock trading orders of multiple buyers and sellers outside of exchanges. Orders sent to dark pools to buy or sell certain stocks are not publicly displayed. When they emerged in the late 1990s, that opacity attracted the pools' initial clients, institutional investors (such as pension and mutual funds), who used it to conceal large trading interests, thus helping to reduce the risk of the market moving against their trades. Quote concealment is a legacy of a regulation adopted by the Securities and Exchange Commission (SEC) in 1998, Regulation ATS, which allowed ATSs with less than an average 5% share of the trading volume to not publicly display their quotes. This contrasts with the 'lit' venues, Nasdaq and the exchanges, which do. Under Regulation ATS, dark pools are required to register either as exchanges with the SEC or as broker-dealers with the Financial Industry Regulatory Authority (FINRA). FINRA, which the SEC oversees, is the frontline regulator of SEC-registered broker-dealers. Dark pools are subject to the same rules that govern trading either on an exchange or by a broker-dealer."
Library of Congress. Congressional Research Service
Shorter, Gary W.; Miller, Rena S.
2014-08-27
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Designation of Global 'Too Big To Fail' Firms [October 29, 2015]
"Hearings in both the House and the Senate have examined the role and processes for U.S. financial regulators and the international standard-setting body--the Financial Stability Board (FSB)--for designating large financial institutions as systemically important (or 'too big to fail'). Members of Congress and various witnesses have raised concerns that the process of FSB designation for global firms, including U.S. firms, is opaque, and that it has potentially costly implications for large U.S. financial firms without affording them U.S. legal means of redress or U.S. 'due process.' This CRS [Congressional Research Service] Insight provides background on the FSB's designation process for systemically significant financial institutions, but takes no position on any potential benefits or shortcomings of that process. Background The FSB was established by G-20 nations in April 2009 to help strengthen the global financial system following the 2008 financial crisis. Its members comprise financial regulatory agencies of G-20 nations. The United States is represented at the FSB by the Department of the Treasury, the Federal Reserve Board, and the Securities and Exchange Commission. The FSB's functions include assessing vulnerabilities to the global financial system; coordinating with financial authorities of member nations; and recommending measures to protect and strengthen the global financial system. The FSB's recommendations and decisions are not legally binding on any of its member nations. Rather, the FSB 'operates by moral suasion and peer pressure, in order to set internationally agreed policies and minimum standards that its members commit to implementing at national level.'"
Library of Congress. Congressional Research Service
Miller, Rena S.; Jackson, James K., 1949-
2015-10-29
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Commodity Futures Trading Commission: Proposed Reauthorization in the 114th Congress [October 19, 2015]
"The Commodity Futures Trading Commission (CFTC), created in 1974, regulates futures, most
options, and swaps markets. The CFTC administers the Commodity Exchange Act (CEA),
enacted in 1936 to monitor trading in certain derivatives markets. The CEA contains a sunset
provision, meaning Congress periodically reauthorizes appropriations to carry out the CEA. If an
explicit authorization of appropriations for a program or activity is present-as in the CEA-and
it expires, the underlying authority in the statute to administer such a program does not, however.
Thus, the CFTC continues functioning and administering the CEA even if its authorization has
expired-which has been the case since the last CFTC reauthorization expired on September 30,
2013. It has not been uncommon for Congress to pass CFTC reauthorization bills several years
after the prior authorization had expired."
Library of Congress. Congressional Research Service
Miller, Rena S.
2015-10-19
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High Frequency Trading: Overview of Recent Developments [April 4, 2016]
"High-frequency trading (HFT) generally refers to trading in financial instruments, such as securities and derivatives, transacted through supercomputers executing trades within microseconds or milliseconds (or, in the technical jargon, with extremely low latency). There is no universal or legal definition of HFT, however. Neither the Securities and Exchange Commission (SEC), which oversees securities markets, nor the Commodity Futures Trading Commission (CFTC), which regulates most derivatives trading, have specifically defined the term. By most accounts, high frequency trading has grown substantially over the past 10 years: estimates hold that it accounts for roughly 55% of trading volume in U.S. equity markets and about 40% in European equity markets. Likewise, HFT has grown in futures markets--to roughly 80% of foreign exchange futures volume and two-thirds of both interest rate futures and Treasury 10-year futures volumes. […] This report provides background on various HFT strategies and some associated policy issues, recent regulatory developments and selected enforcement actions by the SEC and CFTC on HFT, and congressional action such as proposed legislation and hearings related to HFT."
Library of Congress. Congressional Research Service
Miller, Rena S.; Shorter, Gary W.
2016-04-04
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Derivatives: Introduction and Legislation in the 114th Congress [July 1, 2016]
"Derivatives are financial instruments that come in several different forms, including 'futures', 'options', and 'swaps'. A derivative is a contract that derives its value from some underlying asset at a designated point in time. The derivative may be tied to a physical commodity, a stock index, an interest rate, or some other asset. Derivatives played a role in the 2008 financial crisis in a variety of ways. The unmonitored buildup of derivatives positions in the largely unregulated 'over-the-counter' (OTC) market led many major financial institutions into large financial losses. Possibly the best-known example of such losses was the insurance giant American International Group (AIG), whose massive losses from selling credit-default swaps ultimately contributed to the need for government assistance. OTC derivatives, prior to the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act; P.L. 111-203), were traded bilaterally rather than cleared through a clearinghouse, and no reporting trail existed, which created uncertainty during the crisis over the web of exposures to large derivatives losses. The Dodd-Frank Act aimed to address these policy concerns by bringing the swaps market into a regulatory framework based on that of the futures markets, which had long been regulated by the Commodity Futures Trading Commission (CFTC). Security-based swaps tied to equities or narrow-based credit indexes were placed under the jurisdiction of the Securities and Exchange Commission (SEC) within a similar framework."
Library of Congress. Congressional Research Service
Miller, Rena S.
2016-07-01
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Commodity Futures Trading Commission: Proposed Reauthorization in the 114th Congress [August 3, 2016]
"The Commodity Futures Trading Commission (CFTC), created in 1974, regulates futures, most
options, and swaps markets. The CFTC administers the Commodity Exchange Act (CEA),
enacted in 1936 to monitor trading in certain derivatives markets. The CEA contains a sunset
provision, meaning Congress periodically reauthorizes appropriations to carry out the CEA. If an
explicit authorization of appropriations for a program or activity is present-as in the CEA-and
it expires, the underlying authority in the statute to administer such a program does not, however.
Thus, the CFTC continues functioning and administering the CEA even if its authorization has
expired-which has been the case since the last CFTC reauthorization expired on September 30,
2013. It has not been uncommon for Congress to pass CFTC reauthorization bills several years
after the prior authorization had expired."
Library of Congress. Congressional Research Service
Miller, Rena S.
2016-08-03
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Trade-Based Money Laundering: Overview and Policy Issues [June 22, 2016]
"Trade-based money laundering (TBML) involves the exploitation of the international trade system for the purpose of transferring value and obscuring the true origins of illicit wealth. TBML schemes vary in complexity but typically involve misrepresentation of the price, quantity, or quality of imports or exports. Financial institutions may wittingly or unwittingly be implicated in TBML schemes when such institutions are used to settle, facilitate, or finance international trade transactions (e.g., through the processing of wire transfers, provision of trade finance, and issuance of letters of credit and guarantees). TBML activity is considered to be growing in both volume and global reach. Although TBML is widely recognized as one of the most common manifestations of international money laundering, TBML appears to be less understood among academics and policymakers than traditional forms of money laundering through the international banking system and bulk cash smuggling. Nevertheless, TBML has emerged as an issue of growing interest in the 114th Congress, especially as Members and committees examine tools to counter terrorist financing. The U.S. government has historically focused on TBML schemes involving drug proceeds from Latin America, particularly the Black Market Peso Exchange (BMPE). Although a number of anecdotal case studies in recent years have revealed instances in which TBML is used by known terrorist groups and other non-state armed groups, including Hezbollah, the Treasury Department's June 2015 National Terrorist Financing Risk Assessment concluded that TBML is not a dominant method for terrorist financing. This report discusses the scope of the TBML problem and analyzes selected U.S. government policy responses to address TBML. It includes a listing of hearings in the 114th Congress that addressed TBML."
Library of Congress. Congressional Research Service
Jackson, James K., 1949-; Miller, Rena S.; Rosen, Liana W.
2016-06-22
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Key Issues in Derivatives Reform [December 1, 2009]
From the document: "Financial derivatives allow users to manage or hedge certain business risks that arise from volatile commodity prices, interest rates, foreign currencies, and a wide range of other variables. Derivatives also permit potentially risky speculation on future trends in those rates and prices. Derivatives markets are very large--measured in the hundreds of trillions of dollars--and they grew rapidly in the years before the recent financial crisis. The events of the crisis have sparked calls for fundamental reform. Derivatives are traded in two kinds of markets: on regulated exchanges and in an unregulated over-the-counter (OTC) market. During the crisis, the web of risk exposures arising from OTC derivatives contracts complicated the potential failures of major market participants like Bear Stearns, Lehman Brothers, and AIG. In deciding whether to provide federal support, regulators had to consider not only the direct impact of those firms failing, but also the effect of any failure on their derivatives counterparties. Because OTC derivatives are unregulated, little information was available about the extent and distribution of possible derivatives-related losses. The OTC market is dominated by a few dozen large financial institutions who act as dealers. Before the crisis, the OTC dealer system was viewed as robust, and as a means for dispersing risk throughout the financial system. The idea that OTC derivatives tend to promote financial stability has been challenged by the crisis, as many of the major dealers required infusions of capital from the government."
Library of Congress. Congressional Research Service
Miller, Rena S.
2009-12-01
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Financial Regulatory Reform and the 111th Congress [June 1, 2010]
"The financial regulatory reform being considered in the 111th Congress is the continuation of a policy debate beginning before the September 2008 financial panic. For example, Treasury Secretary Henry Paulson issued a blueprint for financial reform in March 2008. In September 2008, after this blueprint was issued but before congressional action, the financial system suffered severe distress as Lehman Brothers and AIG failed. This accelerated the review of financial regulation and refocused some of the policy debate on areas that experienced the most distress. […] One issue in financial reform is the potential reorganization of the financial system regulatory architecture. Currently, the United States has many regulators, some with overlapping jurisdictions, but many believe there are gaps in the oversight of some issues. This structure evolved largely in reaction to past financial crises, with new agencies and rules created to address the perceived causes of the particular financial problems at that time. One option would be to consolidate agencies that appear to have similar missions. […] This report reviews issues related to financial regulation. It provides brief descriptions of the two main comprehensive reform bills in the 111th Congress that address these issues. This report will be updated to reflect congressional activity in financial regulatory reform."
Library of Congress. Congressional Research Service
Shorter, Gary W.; Murphy, Edward Vincent; Miller, Rena S. . . .
2010-06-01
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Commodity Futures Trading Commission: Background and Current Issues [June 24, 2013]
"The 113th Congress is interested in an array of issues faced by the Commodity Futures Trading Commission (CFTC). The congressional committees with oversight of the agency, the House and Senate Agriculture Committees, have begun to hold hearings related to various policy issues faced by the agency, as part of the CFTC reauthorization process. This process occurs roughly every five years and is currently underway, as the last authorization of appropriations for the agency expires September 30, 2013. […] This report provides summaries and abbreviated analyses of selected issues faced by the CFTC that may be relevant to the 113th Congress. It is not an exhaustive list of issues facing the agency. The appendix offers detailed background information on derivatives markets and related policy issues addressed in the Dodd-Frank Act. This report will be updated as events warrant."
Library of Congress. Congressional Research Service
Miller, Rena S.
2013-06-24
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Target and Other Financial Data Breaches: Frequently Asked Questions [February 4, 2015]
"On January 10, 2014, Target announced that personal information, including the names, addresses, phone numbers, and email addresses of up to 70 million customers, was also stolen during the data breach. A report by the Senate Committee on Commerce in March 2014 concluded that Target missed opportunities to prevent the data breach. […] To date, Target has reported data breach costs of $248 million. Independent sources have made back-of-the-envelope estimates ranging from $240 million to $2.2 billion in fraudulent charges alone. This does not include additional potential costs to consumers concerned about their personal information or credit histories; potential fines or penalties to Target, financial institutions, or others; or any costs to Target related to a loss of consumer confidence. The breach was among the largest in U.S. history. […] In addition to Target, there have been data breaches at Home Depot, JPMorgan Chase, Sony, and Adobe. Payment card information was obtained at Adobe and Home Depot. Hackers downloaded a wide range of company confidential information at Sony, and they obtained contact information in the JPMorgan Chase breach. […] Policy options discussed in these hearings include federal legislation to require notification to consumers when their data have been breached; potentially increase Federal Trade Commission (FTC) powers and authorities over companies' data security; and create a federal standard for the general quality or reasonableness of companies' data security. […] This report answers some frequently asked questions about the Target and selected other data breaches, including what is known to have happened in the breach, and what costs may result."
Library of Congress. Congressional Research Service
Weiss, N. Eric; Miller, Rena S.
2015-02-04
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Anti-Money Laundering: An Overview for Congress [March 1, 2017]
"Anti-money laundering (AML) refers to efforts to prevent criminal exploitation of financial systems to conceal the location, ownership, source, nature, or control of illicit proceeds. Despite the existence of longstanding domestic regulatory and enforcement mechanisms, as well as international commitments and guidance on best practices, policymakers remain challenged to identify and address policy gaps and new laundering methods that criminals exploit. According to United Nations estimates recognized by the U.S. Department of the Treasury, criminals in the United States generate some $300 billion in illicit proceeds that might involve money laundering. Rough International Monetary Fund estimates also indicate that the global volume of money laundering could amount to as much as 2.7% of the world's gross domestic product, or $1.6 trillion annually. Money laundering is broadly recognized to have potentially significant economic and political consequences at both national and international levels. Despite robust AML efforts in the United States, the ability to counter money laundering effectively remains challenged by a variety of factors. These include: the scale of global money laundering; the diversity of illicit methods to move and store ill-gotten proceeds through the international financial system; the introduction of new and emerging threats (e.g., cyber-related financial crimes); the ongoing use of old methods (e.g., bulk cash smuggling); gaps in legal, regulatory, and enforcement regimes, including uneven availability of international training and technical assistance for AML purposes; and
the costs associated with financial institution compliance with global AML guidance and national laws."
Library of Congress. Congressional Research Service
Miller, Rena S.; Rosen, Liana W.
2017-03-01
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Financial Services and General Government (FSGG) FY2019 Appropriations: Independent Agencies and General Provisions [October 26, 2018]
"The Financial Services and General Government (FSGG) appropriations bill includes funding for more than two dozen independent agencies primarily in Title V. These agencies perform a wide range of functions, including the management of federal real property, the regulation of financial institutions and markets, and mail delivery. This report focuses on funding for those independent agencies in Title V of the FSGG appropriations bill. It also addresses general provisions that apply government-wide, which appear in Title VII, and provisions on Cuba sanctions, which would typically appear in Title I. In addition, the FSGG bill funds agencies not covered in this report--the Department of the Treasury (Title I), the Executive Office of the President (EOP; Title II), the judiciary (Title III), and the District of Columbia (Title IV). The bill typically funds mandatory retirement accounts in Title VI, which also contains general provisions applying to the FSGG agencies."
Library of Congress. Congressional Research Service
Webel, Baird; Christensen, Michelle D.; Dilger, Robert Jay, 1954- . . .
2018-10-26
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HEROS Act, Division K--COVID-19 Housing, Economic Relief, and Oversight Act [June 29, 2020]
From the Document: "Many economic effects of the Coronavirus Disease 2019 (COVID-19) pandemic intensified in April and May 2020, including historically high levels of unemployment and related housing affordability issues, consumption and spending reductions, and state and local government financial strains. In an attempt to mitigate a range of issues stemming from COVID-19, the House of Representatives on May 15, 2020, passed the HEROES [Health and Economic Recovery Omnibus Emergency Solutions] Act (H.R. 6800), by a vote of 208 to 199. This wide-ranging bill, consisting of Divisions A through T, would provide a new round of economic stimulus checks to individuals and tax credits to certain COVID-19-affected businesses and employees; extend certain federal unemployment benefits; grant some student loan forgiveness; provide rental and mortgage assistance; provide certain health care equipment; and offer economic assistance to state and local governments, among other provisions. [...] This report provides an overview of the HEROES Act's Division K--the COVID-19 Housing, Economic Relief, and Oversight Act--which includes provisions for housing assistance, student loan forgiveness, the provision of medical equipment, credit reporting and debt collection, greater funding for Community Development Financial Institutions, and increased oversight of COVID19-related government loans to businesses, among other measures."
Library of Congress. Congressional Research Service
Miller, Rena S.; Lowry, Sean; Cecire, Michael H. . . .
2020-06-29
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JP Morgan Trading Losses: Implications for the Volcker Rule and Other Regulation [August 16, 2012]
From the Document: "JP Morgan Chase (JP Morgan), the nation's largest bank holding company by asset size, had established a reputation for quality risk management. On May 10, 2012, Jamie Dimon, the bank's chairman and chief executive officer (CEO), held an unplanned conference call. As reflected in the firm's first quarter 2012 filings with the Securities and Exchange Commission (SEC), Mr. Dimon reported that, during the early part of the second quarter, a London-based office of the bank (insured depository) unit, the Chief Investment Office (CIO), sought 'to hedge the firm's overall credit exposure' and incurred 'slightly more than [a] $2 billion trading [paper] loss on … synthetic credit positions.' The CEO characterized the trading strategy behind the loss as 'flawed, complex, poorly reviewed, poorly executed and poorly monitored [and noted that] the portfolio has proven to be riskier, more volatile and less effective as economic hedge than we thought.' He also said that the portfolio still contained securities with 'a lot of risk and volatility going forward.... It could cost us as much as $1 billion or more…. [I]t is risky, and it will be for a couple of quarters.' The loss was charged to the bank's corporate and private equity division, which houses the CIO. During the conference call, Mr. Dimon also indicated that the loss would be partially offset by a $1 billion gain from the sale of securities by the unit, resulting in an $800 million second quarter loss for the division."
Library of Congress. Congressional Research Service
Shorter, Gary W.; Murphy, Edward Vincent; Miller, Rena S.
2012-08-16
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U.S. Initial Public Stock Offerings and the JOBS Act [September 27, 2012]
"Over the past decade, many sources have reported a precipitous decline in the number of initial public offerings (IPOs) in the United States. These statistics raise several questions: what has caused such a decline? What are the implications for the U.S. economy, and particularly for job creation? At the same time as IPOs appear to have fallen, the amount of private stock offerings has increased, suggesting growth in an alternative source of equity financing. This report analyzes factors contributing to the decline in IPOs, differences between an IPO involving the sale of shares to the public versus a private stock offering limited to sophisticated investors, and potential economic implications of such a rise in private versus public stock offerings. It also provides analysis of the causes and implications of the stagnation in public IPOs. [...] Enacted on April 5, 2012, in the 112th Congress, the Jumpstart Our Businesses Startup Act (JOBS) Act (P.L. 112-106) is broadly aimed at stimulating capital formation for companies, especially for relatively new and smaller ones. Among other things, the JOBS Act lifts certain impediments to a small company external financing technique known as crowdfunding, establishes a category of firm known as an emerging growth company (EGC), and relaxes various disclosure and accounting requirements for such firms."
Library of Congress. Congressional Research Service
Miller, Rena S.; Shorter, Gary W.
2012-09-27
