Financial Regulatory Forum

from MacroScope:

A “Greed Tax” on banks

The International Monetary Fund has done what it was bid by the G20  and come up with proposals for getting banks to pay for the government help they receive when they get in trouble.  You can read the actual wording here, but it comes down to this:

Cat1) A "Financial Stability Contribution" which would be pooled into a fund that would use it to help weak banks, or just go into general government revenues.

2)  A "Financial Activities Tax" -- perhaps intentionally known as FAT -- to be levied on combined bank profits and remuneration (for which read "bonuses") and paid to governments.

The first is a kind of insurance policy. The second, however, looks decidedly like what might be called a Greed Tax -- government action on the kind of wealth that has infuriated taxpayers across the world.

The debate will be over whether this is simple kowtowing to populist sentiment or whether it is a reasonable limit on people being accused of knowing none.

Obama to target excessive financial risk-taking

By Alister Bull and Karey Wutkowski

WASHINGTON, Jan 20 (Reuters) – President Barack Obama, reeling from an election defeat in the U.S. Senate, will propose stricter limits on financial risk-taking on Thursday in a move that may recall Depression-era curbs on banks.

The president will announce a series of measures to cut down on excessive risk-taking as part of a revamp of the country’s financial regulatory system, a senior Obama official said on Wednesday.

The move could also help the White House tap into public rage over Wall Street excess after Obama’s Democratic Party was rebuffed by voters in Massachusetts, who elected Republican Scott Brown to the U.S. senate.

Obama proposes U.S. bank fee, slams Wall Street

By Caren Bohan and Alister Bull

WASHINGTON, Jan 14 (Reuters) – U.S. President Barack Obama on Thursday proposed Wall Street banks pay up to $117 billion to reimburse taxpayers for the financial bailout, as he slammed bankers for their “massive profits and obscene bonuses.”

Striking a populist tone, Obama called for a fee on the biggest U.S banks to “recover every single dime” the government spent rescuing the financial sector from its worst crisis since the Great Depression.

“My determination to achieve this goal is only heightened when I see reports of massive profits and obscene bonuses at some of the very firms who owe their continued existence to the American people,” Obama said, reflecting increasingly harsh rhetoric toward the financial industry.

Obama to propose bank fees to recoup bailout funds

By Alister Bull

WASHINGTON, Jan 14 (Reuters) – President Barack Obama on Thursday will propose major U.S. financial firms pay a fee to protect taxpayers from up to $117 billion in losses on a bank bailout that has spurred fury at Wall Street excess.

Obama, whose action comes amid mounting public anger over multi-million dollar bank bonuses while ordinary Americans struggle in the face of 10 percent unemployment, will announce the plan at 11:50 a.m. (1650 GMT), a senior administration official said.

“The fee that is put forward here is in many ways a minimum — a minimum of what is owed back for the rather significant costs that are borne in many aspects by the taxpayers,” the administration official told reporters.

US pay czar caps more salaries at bailed out firms

By Karey Wutkowski and Steve Eder

WASHINGTON/NEW YORK, Dec 11 (Reuters) – The U.S. pay czar on Friday expanded a crackdown on pay packages at four companies rescued with taxpayer money, limiting most cash salaries at $500,000 for a second tier of top earners.

The Treasury Department’s Kenneth Feinberg issued the new limits amid outcries from some companies on a government lifeline that they cannot retain or attract key employees, sending the firms racing for a bailout exit.

He set the compensation structures for the 26th through 100th highest-paid employees at four firms: Citigroup Inc, American International Group, General Motors Co, and GMAC.

Resolution authority bill hits speed bump in Congress

U.S. Representative Barney Frank (D-MA), Chairman of the House Financial Services Committee, listens to a reporter's question during the Reuters Global Financial Regulation Summit in Washington, April 28, 2009.  REUTERS/Jonathan Ernst (UNITED STATES POLITICS BUSINESS HEADSHOT)   By Kevin Drawbaugh and Karey Wutkowski
   WASHINGTON, Nov 3 (Reuters) – Congressional Democrats need more time to debate the funding for an Obama administration “resolution authority” bill for dealing with troubled financial firms, likely pushing committee consideration of the measure into next week, said lobbyists and a House aide on Tuesday.

(more…)

EXCLUSIVE-Obama ‘too big to fail’ bill draft curbs bailouts

WASHINGTON, Oct 27 (Reuters) – A key U.S. congressional committee was expected on Tuesday to release draft legislation agreed with the Obama administration that will restrict future bailouts and create a new protocol for government handling of giant financial firms that get into trouble, a senior congressional source told Reuters.

(more…)

Reuters Summit-U.S. FDIC seeks bailout ban, risk fees

Chairman of the Federal Deposit Insurance Corporation (FDIC) Sheila Bair speaks with reporters during the 2009 Reuters Washington Summit in Washington October 21, 2009.  REUTERS/Jonathan Ernst    (UNITED STATES POLITICS BUSINESS) By Karey Wutkowski
WASHINGTON, Oct 21 (Reuters) – Congress should eliminate any possibility of temporary bailouts in draft legislation that would give the government power to break up troubled, systemic financial firms, a top U.S. bank regulator said on Wednesday.

(more…)

German bank crisis not over -rescue fund head

Hannes Rehm, new head of steering committee for Financial Market Stabilisation Fund (SoFFin), leaves his office after a photo call in Frankfurt February 3, 2009. REUTERS/Alex Grimm (GERMANY)    HAMBURG, Germany, Oct 7 (Reuters) – The financial sector  faces big challenges even after governments intervened massively to prop up tottering banks, the head of Germany’s nearly 500 billion euro ($735 billion) bank rescue fund Soffin warned. (more…)

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