An Agency Ready to Roar?

When Mary Schapiro took over the chairmanship of the Securities and Exchange Commission, she enjoined the staff to “act like our hair is on fire” in curing the agency of various ills such as the botched investigation of Bernard Madoff’s Ponzi scheme. But in the past nine months, a daunting slate ...

By Alix Stuart • Nov. 1, 2009

Derivatives Regulation: Pretty Nitty-gritty

If you thought derivatives were hideously complex, try following the battle to regulate them. The Obama administration’s reform blueprint, which was released in August, foreshadowed a huge shake-up to the over-the-counter (OTC) derivatives market. All “standardized” OTC derivatives would be clear...

By Economist Staff • Oct. 15, 2009

Bank of America Waives Attorney-Client Privilege

When executives read about how Bank of America is waiving its right to attorney-client privilege to cooperate with government investigations into its merger with Merrill Lynch, they will feel as though they are having a flashback to 1999. That was the year that then–Deputy Attorney General Eric H...

By Marie Leone • Oct. 13, 2009

SEC: In-House 404 Costs Top Audit Fees

In a study that took nearly two years to complete, the Securities and Exchange Commission concluded what CFOs at small, publicly traded companies have suspected for years: they’ll have to pay a disproportionately higher amount to comply with the internal-controls portions of the Sarbanes-Oxley Ac...

By Sarah Johnson • Oct. 6, 2009

Space Case

Long rows of darkened offices and cleared-out cubicles are not only bad for morale, they’re bad for the bottom line. Today, many companies find themselves with as much as 50% of their office space going to waste, according to Kevin Farrell, CEO of corporate-real-estate advisory firm Northmarq. Ev...

By Alix Stuart • Oct. 1, 2009

Credit Check

Editor’s Note: For a look at how three dozen industries are faring on key metrics associated with timely payment of invoices, check out the 2009 Credit Risk Benchmarking Report.“Credit is pretty simple,” says Barbara Smith, CFO of Gerdau Ameristeel. “If you have a set of good policies, and have a...

By Scott Leibs • Oct. 1, 2009

Climate Change and the UN: Nice Words

Just over 70 days to go and there is miserably little progress yet. The outlook for the global summit on climate change to be held in Copenhagen in December is uncertain. The current version of the draft outcome document for the meeting is hundreds of pages long, with thousands of passages in bra...

By Economist Staff • Sept. 23, 2009

Can Your Company Handle an Onrush of Risk?

How far can risk management be taken? For example, should a company with a superstar risk manager have been able to predict, two years ago, a recession so deep that it was marked by the implosion of Wall Street investment banks, massive layoffs, and plummeting consumer demand?Risk managers on a p...

By David McCann • Sept. 23, 2009

Turbulence: A Time to Fly Higher?

One week after Fed chairman Ben Bernanke declared the recession to be over — from a technical standpoint, anyway — Darrell Rigby cautioned that the associated turbulence could last five or six years.“Cautioned,” however, may not be the right word. Speaking to a crowd of nearly 300 senior finance ...

By Scott Leibs • Sept. 22, 2009

Green Backing

Neither rich countries nor poor ones can tackle climate change alone. The rich bear most of the responsibility for the greenhouse gases in the atmosphere. But if they make cuts while the poor go on a carbon-heavy growth binge, the climate will suffer anyway. Rich-to-poor aid has thus been a big p...

By Economist Staff • Sept. 18, 2009

Guidance Has Its Rewards

While the Dow’s dismal performance in the first part of 2009 may have tempted many CFOs to go incommunicado, those who fought that impulse were rewarded: a new study from investor-relations firm Sharon Merrill Associates and research firm eventVestor finds that companies that provide earnings gui...

By Kate O'Sullivan • Sept. 1, 2009

Dirty Secrets

Today the financial world is up in arms over “toxic assets,” the bad loans and securities that have wreaked so much havoc on bank balance sheets. But few investors understand the true magnitude of the threat that toxic liabilities — environmental liabilities, that is — pose to the financial healt...

By Tim Reason and Marie Leone • Sept. 1, 2009

Giving Credit Risk Its Due

Customers are the lifeblood of any business. You wine and dine them, promise to be their partners, and shape your strategy around what they want. But these days, customers may be more like vampires if their own cash-flow woes hamper their ability to pay your bills.With more and more small compani...

By Alix Stuart • Aug. 14, 2009

A Renewed Push to Hook Companies for Counterparties’ Actions

Regulators and lawmakers are trying to widen the net of securities-fraud liability. If they’re successful, more companies could be ensnared in private litigation because of their business partnerships with fraudulent companies.In an amicus brief filed in an appeals court last week, the Securities...

By Sarah Johnson • Aug. 11, 2009

Reforming Derivatives: Naked Fear

Tim Geithner has reportedly grown so exasperated with uncooperative regulators that he recently blasted them with an expletive-filled rant. Yet the American treasury secretary’s worker ants continue to draft financial reforms as if nothing were amiss. The next and last proposal to be sent to Cong...

By Economist Staff • Aug. 6, 2009

The SEC’s Most Wanted

Last fall the Securities and Exchange Commission promised to scrutinize the regulatory filings of the largest financial institutions. So it’s little wonder that many of the recent comment letters sent by the SEC to corporations focused on the more controversial accounting issues that cropped up d...

By Sarah Johnson • Aug. 3, 2009

Flexible Spending Account Providers Fighting to Protect Benefits

Payflex Systems, an employee benefits company in Omaha, Neb., never saw much use for hiring a federal lobbyist. That is, until Congress started sniffing around Payflex’s business to help defray the costs of health care reform legislation.“This is all new to us,” Payflex CEO Bob Natt said. The com...

By Roll Call Staff • Aug. 3, 2009

Towers of Debt

From a distance Potsdamer Platz looks a bit like its old self. Once the central hub of Berlin, before it was turned into a rubble-strewn no-man’s-land divided by the Wall, it is now surrounded by shiny new towers. Get a little closer, however, and it becomes clear that many buildings are just faç...

By Economist Staff • July 31, 2009

Five Firms Hold 80% of Derivatives Risk, Fitch Report Finds

Members of Congress probing threats to the global financial system — especially the threat of concentration of risk — will have a lot to ponder in newly mandated disclosures highlighted by a Fitch Ratings report issued last week. While derivatives use among U.S. companies is widespread, an “overw...

By David Katz • July 24, 2009

How to Avoid Bank Bailouts

The last time the Obama Administration labeled financial-services firms too big to fail, the result was government handouts to prop up sputtering giants like Bear Stearns, Morgan Stanley, and AIG. The latest proposal from President Obama, which he sent to Congress on Wednesday, takes a different ...

By Marie Leone • July 24, 2009

Rules Dig Deep into Financing Receivables

The Financial Accounting Standards Board has issued an ambitious new plan that will dramatically increase the volume and quality of the disclosures creditors will be asked to provide with respect “financing receivables.” The plan takes the form of a rule exposure draft, and according to the propo...

By Robert Willens • July 20, 2009

Securities Lawsuits Plummet in 2009

The number of federal class-action securities lawsuits declined substantially in the first half of this year compared to 2008, a new report says. Given the state of the economy, that may seem odd, but there are some logical explanations for the dearth of lawsuits.According to the Cornerstone Rese...

By David McCann • July 20, 2009

Clearing the Air on Carbon Disclosures

The sweeping 1,400-page energy bill passed by the House of Representatives in late June, and now on its way to the Senate, contains the makings of a new asset class for affected companies: carbon emissions allowances. Further, the proposed legislation, dubbed the American Clean Energy and Securit...

By Marie Leone • July 8, 2009

As Supply Outpaced Demand, Insurance Costs Slid

With the bad name that risk-taking of all sorts is being strapped with these days, corporations have pulled back on activities that contain the slightest amounts of peril. Following the law of supply and demand, the cost of limiting those risks has plummeted. Thus, even as financial markets churn...

By Kate O'Sullivan • July 7, 2009

The Carbon Effect on Earnings, M&A

The U.S. House of Representatives narrowly passed a new carbon cap and trade bill last week, bringing American businesses one step closer to a mandatory lid on carbon dioxide emissions — the air pollutant cited as being most responsible for global climate change.The legislation, sponsored by Reps...

By Marie Leone • July 6, 2009