From NPR News:

Federal Reserve Chairman Ben Bernanke told a panel investigating the financial crisis that regulators must be ready to shutter the largest institutions if they threaten to bring down the financial system.

Bernanke is presenting his analysis of the crisis and views on potential systemwide risks as the panel approaches the end of its yearlong investigation into the Wall Street meltdown.

The Fed chief said bailing out these institutions is not a healthy solution and that great improvement will come from the new financial overhaul law. It empowers regulators to shut down firms whose collapse pose a broader threat to the system.

"Too-big-to-fail financial institutions were both a source ... of the crisis and among the primary impediments to policymakers' efforts to contain it," Bernanke told the bipartisan panel.

"We should not imagine ... that it is possible to prevent all crises," he said. "To achieve both sustained growth and stability, we need to provide a framework which promotes the appropriate mix of prudence, risk-taking and innovation in our financial system."

You can read the testimony of Chairman Bernanke here on the Federal Reserve website.

You can read the full article here on the NPR Website.

Bernanke photo is from TopNews.

The head of the Securities and Exchange Commission said Tuesday the agency has revamped itself and stepped up enforcement in the wake of the financial crisis. It is also ready to write numerous new rules for the sweeping financial legislation that is about to become law, she told House lawmakers.

SEC Chairman Mary Schapiro appeared at a House subcommittee hearing, in her first public testimony since passage of the financial overhaul legislation that gives the agency new powers. Her comments also came after the agency agreed to let Wall Street giant Goldman Sachs Group Inc. pay $550 million to settle civil fraud charges.

Lawmakers voiced approval for changes Schapiro has made at the SEC in response to the agency's failure to detect the massive Madoff fraud and other schemes. Some Republicans, however, chafed at the expanded authority the SEC will gain over hedge funds, derivatives and other areas.

Read the full story here on the Yahoo!Finance web page.

The Senate on Thursday morning voted to move the Wall Street reform package forward, assuring safe passage of the regulatory overhaul to President Obama's desk next week.

The Senate voted 60-38 to officially end debate on the bill. Next, the chamber will hold a final vote on it at about 2 p.m. Democrats only need the support of 51 senators for final passage before it goes to the President.

The bill aims to strengthen consumer protection, shine a light on complex financial products and establish a new process for shutting down giant financial firms in trouble.  "Wall Street rigged the game," said Senate Majory Leader Harry Reid. "When they won, they won big. . . But when they lost..they came crawling to the taxpayers for help."

You can see a history of the bill, as well as updates here on the CNNMoney.Com website.

CNN Money has a great article about the Wall Street Reform Bill and how instead of implementing stronger standards for marketing and ethics rules, they will instead study the issue.  Actually, they are going to create 68 different studies.  From the article:

The bill also studies, among other things: short selling, reverse mortgages, improved insurance regulation, private student loans, oversight of carbon markets and the "feasibility of requiring use of standardized algorithmic descriptions for financial derivatives."

Financial sector lobbyists say the bill's sweeping nature -- even more than the health care bill, which mandated about 40 studies -- leads to the studies.

"A lot of the topics the new bill deals with are very complex and interconnected, and one change in one area can set off a domino effect," said Scott Talbott, senior lobbyist with the Financial Services Roundtable, a bank lobbying group. "It's better to take the time to do a study and do it right then to do something in haste to get it wrong."

Read the full story here on the CNNMoney.Com website.

On a day when House and Senate lawmakers have vowed to resolve the most divisive and far-reaching provisions in a broad financial overhaul package, they didn't exactly get off to a lightning start.

On Thursday, the tensions standing in the way of the bill's final passage -- some of them partisan but the most notable involving rifts between Democrats -- boiled to the surface early.

Senator Bob Corker (R-Tenn.) complained that a handful of senators "almost are hijacking the process" over a few very parochial issues.

"I just want to say to my friend," he said, addressing Senate Banking Committee Chairman Christopher J. Dodd (D-Conn.), "there are a number of ways to get to 60 votes. . . . I'm ready to talk."

Although Corker didn't mention any names, he seemed to be alluding to a series of political deals that Democratic leaders eagerly tried to hammer out in recent days to secure enough votes to pass a final bill.

One includes a proposal by Sen. Blanche Lincoln (D-Ark.) that would force big banks to spin off their derivatives businesses. The provision has faced opposition from Obama administration officials, some regulators and, most conspicuously, a sizable collection of centrist Democrats.

Lincoln's amendment has been a tricky issue for Democrats because the party is polarized over how to revamp U.S. financial regulations. Many liberals have supported her provision, while some moderate Democrats and a bloc of House Democrats from New York have opposed it. Lincoln has shown no inclination to back down on her provision, saying it is essential to shielding taxpayers from future bailouts

Read the full story here on the Washington Post website.

From the Knowledge@Wharton website comes an interesting article about young women, sports, and how it changes outcomes later in their business career.

Sports advocates have long insisted that playing sports in school contributes to a child's success later in life, and they point to various evidence as proof: a disproportionate number of CEOs with an athletic side; employers who look for a sports background on résumés to decide between candidates; and studies showing that people who play sports in high school go on to earn more than those who don't.

Still, looking at the correlation between sports and career success brings up a troubling chicken-and-egg question: Does playing sports help people become more successful, or are successful people just more likely to play sports?

New research from Wharton takes a step towards answering the question. In her paper titled, "Beyond the Classroom: Using Title IX to Measure the Return to High School Sports," (PDF) Wharton business and public policy professor Betsey Stevenson offers empirical evidence that playing sports leads to more education and better employment opportunities.

From our friends over at InsuranceNewsNet.Com, the following report on the much rumored Federal Office of Insurance:

The federal office for monitoring the insurance industry is closer to fruition, with only two remaining points left to be worked out between U.S. senators and House members who are putting together the final unified financial reform bill. However, those points are significant, involving the authority the office would have to override state law when securing international insurance deals on behalf of the U.S. industry.

So far, the House and Senate versions of the office have been largely meshed together, agreeing on several key points:

-- This office, within the U.S. Department of the Treasury, would be called the Federal Insurance Office.

-- Treasury would have to work jointly with the U.S. Trade Representative in securing international insurance agreements, and those agreements would require consultation with relevant congressional committees.

-- The office, which would have the authority to request and collect market information from insurers, would first have to determine whether it can get that information elsewhere.

These were all changes requested by House negotiators and granted. "The Big I is pleased that those changes are agreed to by the conferees, because they do improve the legislation," said Charles Symington, senior vice president of government affairs for the Independent Insurance Agents & Brokers of America.

You can read the full story here on the InsuranceNewsNet website.

Claire Wilkinson over at the Insurance Information Institute "Terms & Conditions" Blog has the following note about the US Department of Treasury seeking comments about terrorism insurance:

With this in mind, we note that the U.S. Department of the Treasury has issued a federal notice seeking comments on the long-term availability and affordability of terrorism insurance.

 

Hat tip to National Underwriter which reports on the Treasury’s request for feedback here.

 

In the notice, the Treasury said the Terrorism Risk Insurance Act of 2002, as amended by the Terrorism Risk Insurance Program Reauthorization Act of 2007 (which extended TRIA until December 31, 2014), requires the President’s Working Group on Financial Markets to perform an ongoing analysis regarding the long-term availability and affordability of insurance for terrorism risk.

There are also a couple of great articles the risks facing insurers when it comes to terrorism.  Check them out here on the Terms & Conditions Blog.

Global markets rallied Monday, reversing the steep declines of recent days, after European leaders agreed to provide a huge rescue package of nearly $1 trillion to combat the debt crisis that has engulfed Europe, and central banks began injecting cash into the financial system.

In an extraordinary meeting that lasted into the early hours of Monday morning, finance ministers from the European Union agreed on a deal that would provide $560 billion in new loans and $76 billion under an existing lending program to countries facing instability. Elena Salgado, the Spanish finance minister, who announced the deal, also said the International Monetary Fund was prepared to give up to $321 billion separately.

Officials were hoping the size of the program — a total of $957 billion — would signal a “shock and awe” commitment to such troubled countries as Greece, Portugal and Spain, in the same vein as the $700 billion package the United States government provided to help its own ailing financial institutions in 2008. 

Read the full story here on the New York Times website.

The Dow Jones Industrial Average plummeted almost 1,000 points in a half-hour today, the cause of which appears to be human error exacerbated by a market made more volatile by high-speed trades and automatic sale orders that are measured in milliseconds.

Sources said a trader attempting to short-sell 16 million shares of S&P 500 stock, possibly involving Proctor & Gamble profits, entered a "b" for billion instead of an "m" for million. That error sent high frequency traders scurrying, causing liquidity to vanish.

You can read that full article here on the Businessweek website...and see the related global impact in the video below...

Goldman Sachs' legal headaches don't start and end with the Securities and Exchange Commission.

Reports surfaced late Thursday that federal prosecutors have opened a criminal investigation into Goldman and its employees, over whether it may have committed securities fraud in its mortgage trading operations.

A representative for the firm would not confirm reports of an inquiry, but said they were not surprised given the scrutiny the firm has endured in recent weeks, adding they would cooperate with any requests for information.

The latest legal action builds on the high-profile civil case brought against the company last month by the SEC, in which the agency charged the firm and one of its employees with defrauding investors in the sale of securities tied to subprime mortgages.

Read the full story here on the CNNMoney.com website.

Photo from Businessweek.

Warren Buffett Saturday launched a strong defense of Berkshire Hathaway Inc.'s $5 billion investment in Goldman Sachs Group Inc. and the investment bank's embattled chief executive, Lloyd Blankfein.

Speaking at Berkshire's annual meeting before an estimated 40,000 shareholders, Buffett's forceful defense makes him perhaps Goldman's most powerful defender in the wake of the U.S. Securities and Exchange Commission's civil fraud lawsuit on April 16 against the company.

Buffett also said Berkshire swung to a $3.63 billion first-quarter profit from a year-earlier $1.53 billion loss, helped by an improving economy and gains from investments and derivatives. Operating earnings rose 30 percent to $2.22 billion from $1.71 billion, reflecting "a pretty good uptick'' in business activity, he said.

The SEC lawsuit alleged that Goldman hid from investors the fact that securities underlying a risky debt transaction were chosen by Paulson & Co., a hedge fund firm that was betting they would lose value. Goldman has called the charges unfounded, and Paulson was not charged.

Read the full story here from Insurance Journal and Reuters.

Photo from Businessweek.Com.

It's rare that professional wrestling and professional liability cross paths, but Hulk Hogan is suing his insurance company for malpractice.  From UPI:

The St. Petersburg (Fla.) Times said Hogan, whose real name is Terry Bollea, is accusing the insurance company of failing to advise him to take out an umbrella policy that would have protected his net worth following his son Nick's 2007 car crash, which seriously injured his son's friend, John Graziano.

"The layman's way to put it is, this is broker malpractice," Hogan's attorney Wil Florin told the newspaper.

The lawsuit reportedly says while Hogan had third-party auto liability insurance with a $250,000 limit per person injured, Wells Fargo neglected to suggest Hogan take out an umbrella policy to protect his assets.

You can read the full article here on the UPI website. 

(Image is from UPI).

In an article from Reuters and the Insurance Journal, author Peter Elkind raises the question of whether a well funded and politically connected Eliot Spitzer can rise above the scandal that brought him down and help him reclaim his position of a tough guy on Wall Street.

While running for office this year might be too soon -- there has been speculation he could run for state comptroller or United States Senator -- Elkind noted that Spitzer "is not a patient man.''

"He won't completely shut the door. It's clear he's itching to get back into it,'' said Elkind, who spent several hours interviewing Spitzer for the book.

Spitzer, who has fueled speculation of a return with increased visibility in interviews and as a pundit, recently told Fortune magazine that he was "incredibly frustrated'' at no longer being governor. "I've never said I would never consider running for office again,'' he added.

You can read the full article here on the Insurance Journal website, and a review the book Rough Justice, the Rise and Fall of Eliot Spitzer by Peter Elkind here on the New York Times website.

You don't need to be stuck in an airport to uderstand just how large of a problem the Icelandic Volcano has become on travel in Europe, and the BBC has a great article this morning on how it is impacting the European Union.

Airlines, tourism, delivery services, imports and exports, and general business have been brought to a halt in many areas.  Check out the full article here on the BBC Website.