Corporate Governance

Henry Paulson and the Struggle with Regulatory Solutions

By J. Robert Brown

Henry Paulson at Treasury is struggling over the recent subprime scandals and the near collapse of Bear Stearns. He doesn't like regulation but suddenly finds himself confronting the limits of the market.  As part of this process, Treasury has announced a comprehensive restructuring of the financial markets.  We shall discuss some aspects of the proposal.  But one thing is for certain.  It is mostly DOA.  With an election coming in November and a new President and Secretary of the Treasury, few in Washington are likely to have the stomach for implementing much of the proposal.  There are some pieces that may have some short term appeal (reform in the mortgage lending area) and a few pieces that have been under consideration for a long time (the combining of the SEC and the CFTC).   But on the whole it is a set of proposals that will generate useful debate but not concrete results. 

The pieces that we will discuss relate to the corporate governance process.  Buried within the proposal are some radical shifts in the governance area.  We shall talk about them in turn.

Full post as published by The Race to the Bottom on April 02, 2008 (boomark / email).