RENTERS IMPACTED BY FORECLOSURE

Learn Your Responsibilities and Know Your Rights!

Tenants have rights and options when they are faced with building foreclosure. They also have responsibilities. According to the Illinois Foreclosure Listing service, through the third quarter of 2009, there were just over 53,000 legal actions filed to begin foreclosure proceedings in the Chicago land area. Illinois ranks 5th in the nation with the number of home foreclosures. It is overwhelming, but there is help available.

Why Higher Capital Standards Are Needed

At one level, the pursuit of higher and more robust capital requirements for banks is not going well. The United States Treasury insisted, throughout the yearlong financial reform debate, that capital should be the focus — increasing the loss-absorbing buffers that banks must carry — and that it (and other regulators) needed to negotiate this is through the Basel Committee process.

But Basel has come under great pressure from the banking lobby, which argues that any increase in capital requirements would limit lending and slow global growth, an issue discussed by Douglas Elliott in this useful paper. The Institute of International Finance, a lobbying group for big banks, issued an influential argument along these lines, and the European stress-test results strongly suggest that European politicians do not want to press more capital into their financial system — just enough would be fine with them.

However, at another level — in terms of the analytical consensus around these issues — a great deal of progress has been made. In particular, an important new paper by Samuel Hanson, Anil Kashyap and Jeremy Stein, “A Macroprudential Approach to Financial Regulation,” pulls together the best recent thinking and makes three essential points. (This nontechnical paper, a draft intended for publication in the Journal of Economic Perspectives, is a must-read for anyone interested in financial-sector issues, but requires some effort as a little jargon does creep in.)