Archive

Reuters blog archive

from Breakingviews:

MetLife CEO should revel in his anonymity

By Rob Cox

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Quick, who’s the chief executive of MetLife? That the name Steve Kandarian doesn’t roll off the tongue for almost anyone who isn’t deeply steeped in the insurance business is probably a good thing for his shareholders. How he handles his company’s inevitable designation later this week as a systemic threat to the financial industry could change that. A Jamie Dimon-style public spat with regulators would be foolish. Better to speak softly, and keep the CEO’s relative anonymity intact.

It’s understandable that MetLife objects to being labeled a systemically important financial institution, or SIFI. At a minimum, it imposes a higher level of oversight from regulators. It also would probably force the insurer to submit to cumbersome stress tests. More ominously, it could require MetLife, with its $890 billion of assets, to set aside a lot more capital, potentially lowering returns or forcing it to exit certain businesses. The precise rules on how insurers will be treated haven’t been worked out, however.

Insurers do not obviously pose the level of systemic harm that investment banks and other financial institutions do, a fact conceded even by Barney Frank, whose name adorns America’s post-crisis financial reform.

from Breakingviews:

Citi settlement imposes awfully pricey babysitter

By Reynolds Holding

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Citigroup’s settlement over dodgy mortgages imposes an awfully pricey babysitter. A former prosecutor will watch the bank as part of its $7 billion deal with Uncle Sam. That may ensure compliance. But as Apple and others can attest, independent monitors are too often meddlers fond of excessive oversight and multimillion-dollar fees.

from Breakingviews:

Quickie stock sales toy with Volcker Rule spirit

By Antony Currie 

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.  

Investment banks are using quickie stock sales to toy with the spirit of the Volcker Rule. Wall Street sold some $23 billion of equity block trades for public companies in the first half of the year, according to Thomson Reuters data. That’s almost as much as initial public offerings have raised. These deals are a handy tool for corporations. But at times investment banks blur the line between capital-raising and banned proprietary trading.

from Breakingviews:

BNP’s Prot should go

By Pierre Briançon

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Baudouin Prot should go. The French establishment has circled the wagons, and there is little chance that the chairman of BNP Paribas, who was the bank’s chief executive at the time of the criminal activities it just admitted to, will resign or be asked to. He will then fail to do the decent thing after the bank’s unprecedented guilty plea and near-$9 billion fine.

from Financial Regulatory Forum:

SEC faces challenges before fast-trading reforms can go on the books

By Emmanuel Olaoye, Compliance Complete

The Securities and Exchange Commission has rolled out its intentions to regulate high-frequency trading, making stricter regulation in some form a strong possibility, but the agency faces more work and some challenging obstacles before it can put new rules in the books.

SEC Chair Mary Jo White in a speech last week outlined her goals for regulating high-frequency trading (HFT), at a time when political interest over the fairness and risks of the practice has surged in the wake of a best-selling book by financial writer Michael Lewis.

from The Great Debate:

Servicing the underbanked

A new report from the United States Postal Service inspector general proposes that the agency offer non-bank financial services, including payday loans. Opinion pieces and blog posts praised this idea as a way for the post office to solve its fiscal woes while reaching a portion of Americans outside the traditional banking system. A Reuters “Great Debate” piece, “Transforming Post Offices into banks”), called the proposal a “win-win.”

These pieces overlook some practical problems, however, and leave numerous questions unanswered about implementation. While government and charitable-sponsored financial services should play a role in consumer lending, they cannot replace market-based solutions.

from MacroScope:

Raskin’s warning: ‘Shouldn’t pretend’ Fed capital rules are a panacea

Post corrected to show Brooksley Born is a former head of the Commodity Futures Trading Commission (CFTC) not a former Fed board governor.

Underlying the Federal Reserve recent announcement on new capital rules was a general sense of “mission accomplished.” The U.S. central bank, also a key financial regulator, has finally implemented requirements that it says could help prevent a repeat of the 2008 banking meltdown by forcing Wall Street firms to rely less heavily on debt, thereby making them less vulnerable during times of stress.

from MacroScope:

Mystery of the missing Fed regulator

It's one of those touchy subjects that Federal Reserve officials don't really want to talk about, thank you very much.

For nearly three years now, no one has been tapped to serve as the U.S. central bank's Vice Chairman for Supervision. According to the landmark 2010 Dodd-Frank bill, which created the position to show that the Fed means business as it cracks down on Wall Street, President Obama was to appoint a Vice Chair to spearhead bank oversight and to regularly answer to Congress as Chairman Ben Bernanke's right hand man.

from MacroScope:

Sen. Warren flags double-standard for criminal prosecutions of banks

Massachusetts' rookie Senator Elizabeth Warren was out making waves again at a Senate Banking Committee hearing on Capitol Hill today. The former Harvard law professor contrasted the legal code affecting drug prosecutions with what she depicted as cushy settlements for large Wall Street firms that committed egregious crimes.

Take Standard Chartered. They were fined $667 million by U.S. regulators for breaching sanctions related to Iran and three other countries. Yet the bank posted a tenth straight year of record profits.

from Chrystia Freeland:

Interview with Christine Lagarde at the IMF

Managing Director of the IMF Christine Lagarde sat down for an interview with Chrystia Freeland yesterday, January 17th, following the IMF's New Year Press Briefing.

http://www.youtube.com/watch?v=1OM12HY3Js4&feature=player_embedded#!

CHRYSTIA FREELAND:

Thank you for joining me, Madame Lagarde.

CHRISTINE LAGARDE:

My pleasure.

CHRYSTIA FREELAND:

One of your themes as we enter 2013 is that financial reform must continue.  And you have just said that you're concerned, you see a waning commitment to financial reform.  What do you see going on?

  •