Editor's Note: This is a monthly publication on economic trends and financial policy issues. In this publication you can read "The Longbrake Letter", an analysis of economic trends and conditions written by Bill Longbrake, as well as commentary on financial regulation and policy written by members of the law firm Barnett, Sivon & Natter, P.C., a Washington, DC based law firm that specializes in financial services law.

ISSUE: #24, April 2012

The Longbrake Letter
- Bill Longbrake
Optimism, which was building a month ago, is faltering in the aftermath of a disappointing U.S. employment report. Spanish and Italian debt yields are climbing once again – the European sovereign debt crisis is far from over. In this month's letter, Bill Longbrake reviews recent developments and prospects for U.S GDP growth and examines troublesome trends in employment and in consumer income, spending and debt. The final section contains a country level update of evolving economic and political consequences of deepening recession in Europe.

The Power to Direct and the Power to Recommend
- Jim Sivon
How much power should financial regulators have to control potential systemic risks? A debate in the UK over the proposed powers for the UK's equivalent of FSOC may foreshadow a debate in the US over the exercise of FSOC's power to recommend heightened prudential standards for certain financial products or services.

Can QM and QRM be Unified or Harmonized?
- Bob Barnett
While momentum is building for making the standards for QRM and QM the same, that may be not possible. But because QM standards will be incorporated into the QRM standards, the required risk retention can be differentiated among loans, with many if not most of them requiring only a very minimal retained risk.