July 2012

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THE LATEST SERVICING "The great challenge is to devise a system to identify risks that threaten market stability before they become a danger to the general public." — Sheila Bair, Former FDIC Chair Systemic Risk Council to Convene T recently conducted its first meet- ing, focusing on initiatives to monitor and encourage regulato- ry reform of U.S. capital markets focused on systemic risk. The council, formed by CFA he Systemic Risk Council, a volunteer group led by former FDIC chair Sheila Bair, was created in response to the slow progress of regulators and standard-setters, Bair said. It will monitor and evaluate The Systemic Risk Council for Regulation Monitoring The volunteer-based group holds an assembly to discuss oversight and reform ideas for the nation's capital markets. Institute and the Pew Charitable Trusts, is an assembly of experts in investments, capital markets, and securities regulation. Besides Bair, the group includes the activities of those who are responsible for developing and implementing Dodd-Frank provi- sions related to systemic risk, including the Financial Stability Oversight Council (FSOC) and the Office of Financial Research. "The great challenge is to senior advisor and former Federal Reserve chair Paul Volcker, former SEC chair William Donaldson and commissioner Harvey Goldschmid, and a number of current and former corporate executives and U.S. senators. 52 | THE M REPORT devise a system to identify risks that threaten market stability before they become a danger to the general public," said Bair. "As evidenced by the 2008 crisis and even recent headlines, we need a more effective and efficient early-warning system to detect issues that jeopardize the ate and provide commentary on the current efforts of regulators to design and implement a coordi- nated systemic risk oversight plan. Other activities by the council will include reports and commentary to the FSOC and its members as they adopt regulations to prevent the same type of global financial disaster that occurred in 2008. "Despite the magnitude of the financial crisis, prospects for ma- jor reform of regulatory systems functioning of U.S. financial mar- kets before they disrupt credit flows to the real economy," she added. "And two of the most critical tasks are how to impose greater market discipline on excess risk-taking and effectively end the doctrine 'too-big-to-fail.'" The council expects to evalu- are inadequate and vague," said John Rogers, president and CEO of CFA Institute and Systemic Risk Council member. "This council will serve as an essential sounding board for systemic risk reforms focused on strong investor protection and offer a critical voice to promote the enforcement of regulations, financial disclosure, and trans- parency," he added. The council issued the call to action June 18 at the Pew Charitable Trusts in Washington, D.C., where it detailed its objec- tives and future plans. "This new council is composed of experts with a thorough under- standing of the issues, and we are pleased to support their efforts to find nonpartisan and independent recommendations," said Rebecca W. Rimel, president and CEO of the Pew Charitable Trusts. "The reforms to our nation's financial system enacted by Congress and signed by the president in 2010 were an important first step. The task now is to implement these reforms, especially those related to systemic risk." SECONDARY MARKET ANALYTICS SERVICING ORIGINATION

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