Details of the Plan
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Details of the Plan
The report from the President's Working Group on Financial Markets addresses six major issues that have contributed to the market crisis. Here are some of its recommendations:
Implement strong licensing standards for mortgage brokers and make mortgage terms easier for consumers to understand and compare.
Encourage investors to assess the risks of mortgage securities and similar assets rather than relying on credit ratings.
Require credit-rating agencies to reduce conflicts of interest, make it easier to understand ratings, ensure that ratings are adequately monitored and differentiate ratings of complex securities and traditional bonds.
Ask bank regulators and the Securities and Exchange Commission to advise investment firms on how to improve their risk assessment procedures and alter compensation policies to discourage reckless behavior.
Provide incentives for financial institutions to hold enough capital in case of market downturns and require them to make more transparent disclosures of off-balance-sheet or complex holdings.
Push for Wall Street to set new standards to improve transparency in the trading of derivatives that are bought and sold privately.
SOURCE: Treasury Department
