THE financial industry's lobbying about US mortgage rules may have contributed to the recent financial crisis and may pose a threat to the industry's stability, according to a report published by three International Monetary Fund economists.
The economists found that institutions that lobbied the most also had more lax lending standards, tended to securitise more of their mortgages and had faster-growing loan portfolios.
The delinquency rates were also higher in areas in which these companies' lending grew fastest, the report showed.
"Our analysis suggests that the political influence of the financial industry can be a source of systemic risk," Deniz Igan, Prachi Mishra, and Thierry Tressel said in the conclusion of their report.
"It provides some support to the view that the prevention of future crises might require weakening political influence of the financial industry or closer monitoring of lobbying activities."
Regulators worldwide are pressing companies to improve risk oversight after the world's biggest banks and brokerages reported more than $US1.7 trillion in write-downs and credit losses since 2007 tied to the global financial crisis.
In the US, the Government has extended the $US700 billion financial rescue program until October.
The authors favoured a "moral hazard" interpretation of their findings, where financial companies lobby seeking looser lending standards because they expect to be bailed out during a crisis or because they favour short-term gains.
The report noted that 16 of the 20 lenders that spent the most on lobbying between 2000 and 2006 received funds under the US Emergency Economic Stabilisation Act.
Spending by finance and real estate industry companies accounted for about 15 per cent of overall lobbying in any election cycle, the report said.
Spending on lobbying was $US479,500 per company in 2006, compared with $US300,273 for defence companies and $US200,187 for construction companies, the authors said.
Source:smh.com.au/
Showing posts with label lobbying restrictions. Show all posts
Showing posts with label lobbying restrictions. Show all posts
Monday, January 4, 2010
Sunday, November 29, 2009
OUR VIEW: Lawmakers need to beef up lobbying restrictions
For the past couple of weeks, The Star Press and 22 other newspapers serving 1.5 million readers in the state have printed articles and editorial cartoons detailing the plight of lobbying at the Indiana General Assembly.
It's not a pretty picture, and reform is called for -- reform with real teeth.
Currently, legislators may accept gifts of unlimited value from lobbyists. They even can interview for jobs with lobbying firms while still serving in elected office. This is wrong.
Fortunately, and no doubt thanks to the efforts of the Indiana newspapers, reform during the next session appears to be on the agenda.
House Speaker Patrick Bauer, D-South Bend, and David Long, president pro tempore of the Indiana Senate, are backing tougher lobbying laws.
A key provision backed by both lawmakers is a one-year "cooling off" period before former lawmakers can become paid lobbyists and turned loose in the halls of the Statehouse.
More than 30 former legislators are now working as lobbyists. There can be little doubt they have access and influence the average citizen can only dream about.
A second tenet is banning all gifts worth more than $50 in value. There's no justification for lawmakers to accept trips and tickets to sporting events from lobbyists. Trips and tickets do nothing to advance the public's interest.
There's a whole list of reforms that have been proposed (see breakout). We think it's a good starting point, and we encourage our local lawmakers to support changing the state's lobbying practices.
We also encourage Gov. Mitch Daniels to speak out on this issue. His strong voice of leadership is needed and the public deserves to know where he stands on lobbying.
Indiana has in place many preventative measures such as lobbyists registration and reporting requirements. These are good starts, but we believe you can never have too much transparency when it comes to influencing those we elect to govern us.
We hope our lawmakers agree and do something about it in the upcoming session.
Source:thestarpress.com
It's not a pretty picture, and reform is called for -- reform with real teeth.
Currently, legislators may accept gifts of unlimited value from lobbyists. They even can interview for jobs with lobbying firms while still serving in elected office. This is wrong.
Fortunately, and no doubt thanks to the efforts of the Indiana newspapers, reform during the next session appears to be on the agenda.
House Speaker Patrick Bauer, D-South Bend, and David Long, president pro tempore of the Indiana Senate, are backing tougher lobbying laws.
A key provision backed by both lawmakers is a one-year "cooling off" period before former lawmakers can become paid lobbyists and turned loose in the halls of the Statehouse.
More than 30 former legislators are now working as lobbyists. There can be little doubt they have access and influence the average citizen can only dream about.
A second tenet is banning all gifts worth more than $50 in value. There's no justification for lawmakers to accept trips and tickets to sporting events from lobbyists. Trips and tickets do nothing to advance the public's interest.
There's a whole list of reforms that have been proposed (see breakout). We think it's a good starting point, and we encourage our local lawmakers to support changing the state's lobbying practices.
We also encourage Gov. Mitch Daniels to speak out on this issue. His strong voice of leadership is needed and the public deserves to know where he stands on lobbying.
Indiana has in place many preventative measures such as lobbyists registration and reporting requirements. These are good starts, but we believe you can never have too much transparency when it comes to influencing those we elect to govern us.
We hope our lawmakers agree and do something about it in the upcoming session.
Source:thestarpress.com
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