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Financial Crisis & Resolution 2008
ABA Resources
Through letters, calls and meetings with policymakers -- and using ABA's unparalleled reach to large and small media outlets across the country -- ABA has been advocating that traditional banks, which did not make the kind of subprime loans that ultimately spurred a global credit market crisis, should not pay the price for resolving the crisis. ABA also has made a priority of keeping members informed of the latest actions affecting their institutions and proposing practical solutions. Following is an overview of ABA's actions.
 ABA staff experts welcome calls from members with questions about how current events may affect their institutions. Contact ABA Staff Experts.  |
Emergency Economic Stabilization Act
From the first day Treasury proposed its plan for ridding financial institutions of bad assets, ABA has sought to make sure the plan would be made available to all size banks. ABA also has argued against including bankruptcy mortgage cram-down provisions in the bailout bill, and has urged the SEC to recognize that it is near impossible to determine the fair value of assets in the current environment.
Week of Dec. 8-12:
Week of December 1-5:
Week of November 24-28:
Week of November 17-21:
Week of November 10-14:
Week of November 3-7:
Week of October 27-31:
Week of October 20-24:
Week of October 13-17:
Week of October 6-10:
Week of Sept 29 - Oct 3:
Week of September 22-26:
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Fannie Mae/Freddie Mac Takeover
Many of ABA's members were harmed when the government, as part of its bailout of Fannie Mae and Freddie Mac, suspended dividends on GSE preferred shares and effectively wiped out the stocks' value. ABA has provided Congress and regulators with information about the conservatorship's real-world effects on banks and lending, and has recommended specific steps policymakers should take to prevent a worsening credit crunch.
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Fair-Value Accounting and OTTI
As economic conditions worsened this summer and Fannie/Freddie stock lost value (prior to the government's takeover), ABA began work on problems associated with applying fair value accounting in a tumultuous economic environment. ABA organized conference calls with bankers and the chief accountants at bank regulatory agencies to discuss "other than temporary impairment" as it relates to trust preferred securities and certain perpetual preferred stock.
Armed with specific examples collected from member banks, ABA has argued for changes to FASB's fair value standard and auditors' application of it. ABA continues to take the lead on this issue, and has been working with Congress for legislative relief.
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Treasury Action on Money Market Mutual Funds
Within just a few hours of the Treasury Department's Sept. 19 announcement of a government guaranty for money market mutual funds, ABA was on the phone and in meetings with Treasury officials and bank regulators explaining the dire consequences such a plan would have for banks and the financial system and asking for fixes.
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SEC Action on Short Selling
Since SEC first imposed a temporary order in July 2008 barring naked short selling of stock in only the largest publicly traded financial institutions, ABA has sought to expand the ban to include all publicly traded banks and bank holding companies to prevent market manipulators from migrating to the stocks of banks not on the list.
On Sept. 17, SEC agreed and passed new rules effectively banning abusive naked short selling for all public company stock. The SEC went further and on Sept. 19 temporarily prohibited all short selling of 799 financial institutions' stock. Since then, ABA has worked to have additional banks covered by the temporary order.
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Other Regulatory Action
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Additional Communications Resources
Questions? Please contact Charlotte Birch for more information.
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