Now that healthcare reform has passed, the Obama administration has turned its focus on financial services regulatory reform. Today, Obama gave a speech on the administration’s position and priorities. The House has already passed a bill, and the senate may take up one this week, largely authored by Senator Dodd. A major sticking point has been the fund to facilitate an orderly liquidation (labeled a “bailout” fund by some critics) and the way to handle derivatives, but Senator Grassley’s vote yesterday to approve a senate committee’s plan for derivatives trading gave new momentum to a bipartisan effort on regulatory reform, and it looks increasingly likely that in the coming months (if not weeks) we’ll see a major overhaul of the regulations that govern Wall Street.
Further, the SEC demonstrated late last week that they are one government agency that is going to take their oversight responsibilities seriously. Their civil suit against Wall Street giant Goldman Sachs sent shock waves through the financial services sector. It’s clear that there’s a major shift on in the way regulators are regulating. Whether or not you agree with the merits of the suit, SEC Chair Shapiro is sending a message to the industry that they are going to be watching closely.
A common theme here is transparency: the SEC argues that Goldman didn’t provide adequate disclosure about the nature of the Abacus investment opportunity; Obama argues today that “reform would bring new transparency to many financial markets.” We also see this as a common theme with our customers–they are looking for greater transparency into the risks in their business. We see this push for regulatory reform and increased oversight as driving the demand for a new information architecture that provides this transparency to managers, executives, board members and regulators. Of course, many companies are finding that it can help you run your business better, too.