The problem with this guidance is that the dividing line between a loan and a debt security is economically indeterminate. That said, the guidance does point out "bad language" in documents that would indicate that a credit obligation to a bank might be deemed a security rather than a bank loan; e.g., the use of the instrument of terms such as "bond" or "security" or "purchaser." In short, if it is desired that a credit instrument be treated as a "loan," then the instrument should use…

While it is certainly appropriate for the SEC to concern itself with investment in private issuers, the SEC should also be concerned that the costs of the regulation that it imposes might discourage companies from going public. Put differently, the SEC should consider whether it is selling a "product" (access to the public capital markets and exchange liquidity) that is unattractive in light of its subsequent costs.  

Congress should also be concerned about the…

Is this good public policy, or is this the government favoring lending to the public sector by effectively deeming loans to the public sector as being less risky than they, in fact, are?  

President Dudley asserts that when the Board extended credit in the financial crisis, "it intervened to prevent the failure of several systemically important institutions, including firms it did not supervise – namely Bear Stearns and AIG." The gist of Mr. Dudley's remarks seems to be: if the Board made any mistakes leading to the crisis, it was not realizing that others would screw up. Wouldn't it have been fairer to say that if the Board had not existed as a lender…