More On Legal & Compliancefrom The Advisor's Professional Library
- Where Are We Headed? The ultimate compliance goal is to help ensure that everyone associated with an advisory firm acts ethically at all times. Advisors and RIAs should do the right thing, even when regulators are not looking over their shoulders.
- The Few and the Proud: Chief Compliance Officers CCOs make significant contributions to success of an RIA, designing and implementing compliance programs that prevent, detect and correct securities law violations. When major compliance problems occur at firms, CCOs will likely receive regulatory consequences.
The unprecedented has become almost routine. One day after saying it would set up a facility to buy commercial paper directly from corporate issuers, the Federal Reserve early on October 8 issued a joint statement with five other central banks around the word that it would reduce interest rates. The banks include the European Central Bank, the Bank of England, and the Canadian, Swedish, and Swiss national banks.
Later in the day, the Chinese national bank also cut its benchmark lending and deposit rates by 27 basis points, while the Bank of Japan expressed its support of the actions.
The statement from the Fed noted that "inflationary pressures have started to moderate in a number of countries," and that "inflation expectations are diminishing." The Federal Open Market Committee thus decided--three weeks ahead of its next scheduled meeting--to lower its target for the federal funds rate by 50 basis points, to 1.5%. The other central banks also cut their rates by 50 bps.
The FOMC cited economic data suggesting that "the pace of economic activity has slowed markedly in recent months," and that the "intensification of financial market turmoil is likely to exert additional restraint on spending, partly by further reducing the ability of households and businesses to obtain credit." The committee acknowledged that "inflation has been high," but voiced its belief that a decline in prices for energy and other commodities and "weaker prospects for economic activity have reduced the upside risks to inflation."
The Fed Board of Governors also cut the discount rate by 50 bps to 1.75%.