Hi friend,
A year ago this month, Silicon Valley Bank failed and shortly after, Signature Bank and First Republic Bank followed, causing a banking crisis. These were three of the four largest bank failures in U.S. history and they are going to cost American taxpayers about $40 billion in bailouts. Long before March 2023, we were sounding the alarm and flagging the risks that led to the crisis, especially the need for more capital.
This month, we put out a report detailing the ongoing threats to the financial system and Main Street, and provided a roadmap for necessary changes that will help prevent another crisis. These recommendations include improving and strengthening capital rules, increasing and enhancing resolution planning, adopting improved and enforceable corporate governance and risk management guidelines, holding bank executives accountable, and more. These changes are necessary to prevent another financial crash that could cost Main Street Americans their jobs and livelihoods.
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The 2023 banking crisis was a stark reminder of the importance of our work, and the urgency to reform Wall Street and protect Main Street. In this month’s newsletter, you’ll see how that work extends to pushing regulators to effectively punish financial criminals and fighting against relatively new threats, including industry resistance to climate disclosure, the increasing prominence of gamification, and the challenges involving the use of AI in finance.
We appreciate the support of our generous partners who allow us to push back against these threats to our economy and to provide a vision for an economy that works for all Americans. We’d be grateful if you’d join them and support us too, which you can do here.
Dennis
Dennis Kelleher
Co-Founder, President & CEO
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The SEC’s enforcement program is key to protecting the hard-earned money of investors and the integrity of the capital markets they invest in. However, the program would be more effective if the SEC meaningfully punished individuals, not just fining large corporations that can afford them. In our report, we urge the SEC to work harder to hold individuals personally accountable for wrongdoing.
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Better Markets filed an amicus brief in KalshiEx LLC v. CFTC, a case that will determine whether gambling on U.S. elections will be allowed. The stakes are high, as this decision could undermine the democracy and the integrity of our elections, trigger market manipulation, and victimize countless Americans. Learn more about the Kalshi case in our FAQ.
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The SEC released much-anticipated final rules on climate risk disclosures. While it does include some important provisions, it is mostly deficient and watered down. This weakened rule was not driven by merits, but by the SEC’s fear of losing a future lawsuit that the financial industry has relentlessly threatened and, no surprise, filed. Read more in our statement.
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The push to incorporate AI (artificial intelligence) into banking and other financial markets is intense, and Wall Street megabanks are heaping money into it, with an expected $400 billion spent by 2027. AI applications present potential benefits, but also serious risks to investors, markets, and financial stability because of the susceptibility to fraud and manipulation. In our new fact sheet, we outline steps regulators should take to keep up with the growing technology.
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Better Markets in the News
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The involvement [in crypto] of traditional and trusted financial firms like BlackRock and Fidelity not only provide false comfort, but also a level of assumed legitimacy. Financial firms have engaged in a massive marketing campaign that’s just getting off the ground, and opened up a gigantic new pool of Main Street investors.
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Activities at the Regulatory Agencies
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Each month our legal team outlines some of the top cases we're keeping an eye on, the Amicus "Friend of the Court" Briefs we have filed, and why everyone with a bank account, credit card, mortgage loan, or retirement loan should be interested in those cases.
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| A number of high-profile Congressional hearings, the State of the Union, and government funding deadlines made March another busy month on Capitol Hill. Federal Reserve Chair Jay Powell also delivered his semi-annual report to Congress.
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