Should a transfer tax be imposed on stock trades?
This question was the subject of a spirited debate on CNBC earlier today when Erin Burnett moderated a discussion between David Min, Associate Director for Financial Markets Policy, Center for American Progress and Mark Calabria, Director of Financial Regulation Studies at The Cato Institute.
Mr. Min argued the benefits of a trading tax, while Mr. Calabria argued the tax would not solve anything.
Mr. Min proposed that the tax could discourage speculative trading, “better align market incentives with long-term outlook,” and reduce volatility while not cramping liquidity too much.
Mr. Calabria countered Min’s argument by saying that speculation in …read more

Treasury Secretary Timothy Geithner called for legislation that would require derivatives to be traded on exchanges or clearinghouses, rather than in over-the-counter (OTC) transactions. This proposed authority over the largely unregulated derivatives multi-trillion-dollar market is aimed at mitigating the systemic risk that contributed to the current global financial crisis. Here are some of the responses to this week’s news.
TheDeal.com identified the stakeholders and explored the politics of derivatives regulation.
The key players here are regulators and payments systems executives around the world, two groups that have long been deeply intertwined and, to the public, mostly invisible. The battlefield has two locales: …read more

The Securities and Exchange Commission will hold a roundtable on May 5 to discuss whether short sale price test restrictions or short sale circuit breakers should be adopted.
The two approaches to restrictions on short selling proposed by the SEC are:

The price test approach. This would apply on a permanent market-wide basis.
The circuit breaker approach would apply to a particular security during severe market declines in the price of that security.

“Since the Commission eliminated short sale price tests two years ago, we have seen market conditions and events that differ sharply from those of previous years,” said Erik Sirri, Director of the …read more

It’s a bird…it’s a plane…it’s Super Regulator!
Treasury Secretary Tim Geithner is making the case for a new regulatory body with far reaching powers.
This new body, dubbed the “Super Regulator,” would monitor groups and activities which have been flying under the radar for quite some time.
Insurance  companies, hedge funds, financial derivatives, and private equity funds would all be subject to the rules of this new regulator.
Let’s take a look at each group:
Insurance companies – If AIG stuck to selling insurance, then insurance companies wouldn’t have been on this list. However, the company dealt in derivatives that went sour and landed the company in …read more

A lot of the buzz seems to be swirling around regulatory issues this week.

Becker and Posner discussed mark-to-market rules and how they might be applied in the future.
Huffington Post called for a financial regulatory overhaul.
Illinois Senator Dick Durbin proposed a consumer-oriented regulatory agency to police financial products: the Financial Product Safety Commission. Cool idea, if your 401(k) is full of melamine.
Truthout weighs in on big banks, huge bailouts, gigantic potential losses.
Imus gives us 60s throwback activist Dick Gregory, who thinks his taking time off food will solve complex economic crises.
I covered the tax ramifications of mortgage debt forgiveness over on Business …read more