New Study: What's Next for Banking Legislation, Regulation? Interview with Eva Weber of Aite Group

Credit EligibleAs a BankInfoSecurity.com annual member, this content can be used toward your membership credits and transcript tracking. Click For More Info

Given 2008's global financial crisis, what can we expect in terms of new legislation and regulation in 2009?

Aite Group, the Boston-based financial services analyst firm, takes a stab at answering this question in a new report "What Next? Legislative and Regulatory Response to the Financial Crisis."

In an exclusive interview, Aite Analyst Eva Weber discusses:

Weber focuses on the regulatory and compliance issues facing financial institutions. Recent research has focused on anti-money laundering, risk management, fraud, and bank regulation at the federal and state levels. She brings to the position research and analytical skills gained in five years as a practicing attorney, and has helped Aite Group clients respond to major regulatory initiatives, such as Sarbanes-Oxley, the Bank Secrecy Act, the USA PATRIOT Act and new bankruptcy laws.

Weber has presented before the BITS Fraud Steering Committee and at user conferences for Metavante and Postilion. She has been quoted in leading press outlets, such as Associated Press, USA Today, The Boston Globe, and The Atlanta Journal-Constitution on mortgage industry regulation, and more broadly in trade publications, such as American Banker and The Greensheet.

Click to Get Updates on the Latest Information Security News

Company* Title* Email* Subscription Type: HTML Text Healthcare Enews General Healthcare Enews Blogs Enews Careers Enews Training Enews Webinars Enews Podcasts Enews White Papers Enews Government Enews General Government Enews Blogs Enews Careers Enews Training Enews Webinars Enews Podcasts Enews White Papers Enews Banking Enews General Banking Enews Blogs Enews Careers Enews Training Enews Webinars Enews Podcasts Enews White Papers Enews Credit Union Enews General Credit Union Enews Blogs Enews Careers Enews Training Enews Webinars Enews Podcasts Enews White Papers Enews Need Help?

TOM FIELD: Hi, this is Tom Field, Editorial Director with Information Security Media Group. We are talking today with Eva Weber, analyst with the Aite Group. The Aite Group has just come out with an interesting new report called "What's Next? Legislative and Regulatory Response to the Financial Crisis." Eva, thanks so much for taking the time to talk with me about this report.

EVA WEBER: My pleasure Tom.

FIELD: Now it's sort of an obvious question here, but what would you say was the impetus for this new study?

WEBER: Well, I think we all realize that the recent goings on in the mortgage and securities market spell future regulatory and legislative changes. Over the past several months members of Congress have gone out of their way to explore what experts and industry players have to say about how the financial crisis has unfolded, what are some possible resolutions and how best to avoid such situations in the future.

The sense I get from talking with institutions and from tracking regulators and lawmakers comments is that we are about to see a fundamental shift. Where the last decade was essentially a laissez faire in respects, such as some lending practices, particularly among mortgage brokers. The perception is that attitude has produced economic disaster, and it is not just a paper disaster. Consumers are suffering, mortgages are underwater, unemployment is rising and consumer confidence is in question.

The result is that legislators are going to take a more activist position in protecting consumers and we wanted to know what that meant in practical terms.

FIELD: So Eva, what specifically did you look at to draw your analysis for this report?

WEBER: There is a select number of organizations of course that influence the kind of legislation or regulations that we are talking about, industry lobbying groups, consumer protection groups and legislative committees that drive decision making. The picture of what banks can expect started to become clear after analyzing the positions of those different groups as well as after looking at the issues that regulators have come under fire for, such as oversight of consumer lending and risk management.

Another key ingredient lies in weighing the potential positive effect on consumers partly balanced by the potential burden that will be placed on banks.

FIELD: Now as I understand it, you've got sort of three areas that you make recommendations on. What are some of the baseline recommendations coming out of this study?

WEBER: Well, generally consumer protectionism is rising to the fore, and banks need to be ready. Particularly knowing that lawmakers are looking closely at bank activities, banks need to be more proactive in making their own changes before mandates are issued.

Risk management will require more focus, a concerted shift toward enterprise-wide risk management will be necessary. And, because of the fallout experienced from collateralized debt obligations and credit default swaps, internal processes around valuating credit and market risk will need to be stepped up. Lending practices will also need to be scrutinized and tightened. Consumer facing efforts such as disclosures need to be revisited.