Post Event Summary
On Monday at AEI, members of the Shadow Financial Regulatory Committee discussed pressing financial regulation issues at a luncheon press briefing. Richard Herring of the Wharton Business School discussed "The Federal Reserve Board Proposal for Enhanced Prudential Standards and Early Remediation Requirements." The committee commented on aspects of the proposed rule, noting that it seemed excessively complex, but that the number of forward-looking indicators regarding the health of systemically important financial institutions was encouraging. Catherine Schrand focused on "Alternatives to the Proposed Risk-Based Bank Capital Standards," proposing that bank regulation would be better served by replacing the risk-weighted standards with a minimum leverage ratio, defined as shareholder equity divided by total assets. Chester Spatt talked about the report "Some Lessons from the MF Global Debacle," highlighting a range of important questions about our financial system. Franklin Edwards discussed "The Regulation of Money Market Mutual Funds and Systemic Risk," highlighting a regulatory structure that will greatly moderate the systemic risk associated with the present structure of the money market mutual funds (MMMF) industry while still both enabling the industry to provide a variety of MMMF products and permitting investors to benefit from the competition and financial innovation MMMFs provide. Kenneth Scott finished with a discussion of "The Volcker Rule: Market Making Exception," suggesting two steps that would help to minimize the rule's adverse consequences by easing both compliance and enforcement.

Event Description
The Shadow Financial Regulatory Committee (SFRC) is a group of publicly recognized independent experts on the financial services industry--including banking, insurance and securities--who meet regularly to study and critique regulatory policies affecting this sector of the economy. At two closed sessions before the luncheon, committee members will discuss the latest in financial regulation issues, including Basel market risk capital requirements, the Dodd-Frank Act, MF Global, Securities Exchange Commission issues and accounting issues. At a luncheon briefing that follows these sessions, SFRC members will issue several statements and answer questions related to the topics discussed. 

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