Financial Regulatory Forum

from MacroScope:

Spitzer: NY Fed “an absolute sinkhole”

To say former New York Governor Eliot Spitzer is no fan of the Federal Reserve Bank of New York would be an understatement.

After arguing financial regulatory reform proposals being discussed in Washington fall short, he said:

"One institution needs to be completely overhauled: The New York Fed," he said.

At a panel in New York,  Spitzer lambasted the  New York Fed as "an absolute sinkhole when it comes to what went on over the past ten years."

"There wasn't a single person there who knew what was going on because this was all one club," Spitzer said.  "Every member of that club wanted to protect what was going on," he said.

Former UBS chairman willing to give evidence-report

   ZURICH, March 9 (Reuters) – Former UBS <UBS.N><UBSN.VX> chairman Marcel Ospel is willing to give evidence to a parliamentary committee into the Swiss government’s bailout of the bank during the financial crisis, daily Blick reported on Tuesday. (more…)

BREAKINGVIEWS-Paris, Berlin might find Greek bailout profitable

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

By Pierre Briancon

PARIS, March 1 (Reuters Breakingviews) – Forget for a moment the headline-grabbing numbers and the political and financial drama, which supposedly includes a European Union Greek bailout worth tens of billion of euros. It now appears that the French and German governments are working on a scheme that would end up costing much less, and may be profitable, if coupled as planned with a tough Greek deficit reduction.

It goes like this. France and Germany first make sure that their own banks keep taking on Greek bonds. This will help Athens raise the 45 billion-odd euros ($61 billion) it still needs this year, about half in April and May. To nudge their private-sector banks in that direction, the two governments won’t rely only on the traditional, friendly but firm political pressure. They will also dangle financial guarantees from state-owned financial powerhouses, Germany’s KfW  and France’s Caisse des Depots (CDC).

Euro zone holds intensive talks on Greek rescue

By Matthias Sobolewski and Renee Maltezou

BERLIN/ATHENS, Feb 10 (Reuters) – Euro zone countries held intensive talks on Wednesday on a possible rescue for Greece, whose debt crisis has shaken the entire currency union, as civil servants staged the first big strike against Athens’ austerity plans.

Financial markets gave Greece some respite as investors hoped that other European governments would help Athens to head off a possible default on its debt repayments.

Finance ministers of the 16 countries that share the common European currency scheduled a video conference for Wednesday to discuss the issue, a European Commission spokesman said.

European governments agree to help Greece – source

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By Matthias Sobolewski

BERLIN, Feb 9 (Reuters) – European governments have agreed in principle to help heavily indebted Greece, a senior German coalition source said on Tuesday, in what would be the first rescue of a euro zone member in the currency’s 11-year history.

“The decision on help for Greece has been taken in principle within the euro zone,” said a source in the German coalition government who has knowledge of the negotiations.

Various options were under consideration and no final decision had been taken but the most likely possibility was to offer “bilateral help,” the source said.

ECB says can’t bail out Greece, sees contagion risk

By Boris Groendahl and Terhi Kinnunen

VIENNA/HELSINKI, Feb 9 (Reuters) – Greece must get its own house in order itself as the European Central Bank cannot bail it out, two ECB policymakers reiterated on Tuesday.

“Greece, being a euro country, is under the regime of euro regulations, and so the main policy approach is of course that they have to solve the problems themselves,” ECB Governing Council member Ewald Nowotny said in an interview.

“The ECB have a clear mandate … we have a clear no-bailout clause,” Nowotny said in an interview with FT Alphaville, a blog published by the Financial Times newspaper.

BREAKINGVIEWS – Is Conan O’Brien a $40 million bailout recipient?

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

By Rolfe Winkler

NEW YORK, Jan 19 (Reuters Breakingviews) – Conan O’Brien is expected to receive $40 million for leaving NBC, the media unit of General Electric, itself among the largest recipients of taxpayer help. While it would be a stretch to compare the American late-night talk show host to a Goldman Sachs or Citigroup banker, he’s only a few steps removed.

Though it wasn’t a recipient of direct aid from the Troubled Asset Relief Program, GE availed itself of perhaps an equally important bailout facility, the Temporary Liquidity Guarantee Program overseen by the Federal Deposit Insurance Corp.

Bernanke seeks government audit of Fed’s AIG bailout

WASHINGTON, Jan 19 (Reuters) – U.S. Federal Reserve chairman Ben Bernanke on Tuesday asked a government auditor to review the Fed’s actions in bailing out American International Group Inc in 2008, as controversy persisted over the central bank’s role in extending billions in credit to the insurer.

Bernanke, in a letter to Acting Comptroller General Gene Dodaro, said the Fed would make available to the Government Accountability Office all documents and personnel necessary to conduct the review.

(more…)

U.S. lawmakers force issue on Fed role in AIG bailout

By Glenn Somerville

WASHINGTON, Jan 12 (Reuters) – U.S. lawmakers moved on Tuesday to force release of documents that may show whether the New York Federal Reserve pressured insurer AIG to limit discussions about payments to banks when current Treasury Secretary Geithner led the New York Fed.

The Democrat who heads the House of Representatives Oversight Committee, Rep. Edolphus Towns of New York, issued the subpoena to the New York Fed saying it “will provide the committee with documents that will shed light on how and why taxpayer dollars were used for a backdoor bailout.”

Congressional ire was fanned by the refusal of the inspector general for the government’s bailout fund, the Troubled Asset relief Program or TARP, to release material on AIG’s payments to banks because the Federal Reserve asked them not to make them available to the public.

Obama, New York law chief Cuomo target Wall Street bonuses

By Caren Bohan and Jonathan Stempel

WASHINGTON/NEW YORK, Jan 11 (Reuters) – The White House and and New York’s top prosecutor attacked excessive Wall Street bonuses, as the nation’s biggest banks prepare to hand out awards critics say were made possible by taxpayer bailouts.

A senior U.S. official also confirmed President Barack Obama is considering a fee on financial services firms as part of the fiscal 2011 budget he will unveil in February.

The proposal reflects tougher approach the White House is taking toward Wall Street as it faces rising political heat over its support for the $700 billion financial bailout begun in the Bush administration.

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