Financial Regulatory Forum

PREVIEW-Final act begins in U.S. Congress on Wall St reform

By Kevin Drawbaugh

WASHINGTON, June 7 (Reuters) – Negotiators from the U.S. Senate and House will begin meeting this week to craft a final Wall Street reform bill, with banks facing changes that threaten their profits, if not their business models.

Some congressional Democrats want to fashion a bill that forces a basic banking industry restructuring, but leaders will have to balance that agenda against the need to forge compromise legislation that retains some Republican support.

Analysts are expecting that fundamental restructuring will be avoided, “This bill is more about profitability and less about viability. That means the legislation will hurt the banking sector, but it will not sink it,” said Jaret Seiberg, a policy analyst at investment firm Concept Capital.

The delicate task of crafting a winning compromise will fall to Representative Barney Frank, who will chair the “conference committee” getting under way in a few days, and Senator Christopher Dodd, a consensus builder who will lead the Senate negotiating team.

Both lawmakers are old-school liberal Democrats with more than 60 years on Capitol Hill between them. They will need all of that experience to finish up a legislative project that is at the top of President Barack Obama’s priority list.

ANALYSIS-Markets fret, but chance of big bank crash slim

By Steve Slater and Alex Chambers

LONDON, May 28 (Reuters) – This week’s market jitters that banks were heading back to the darkest days of 2008 look overdone because lenders have vastly improved their assets and central banks stand ready with abundant funding.

Bank of Spain’s bailout of a small regional bank has brought back the spectre of another systemic crash after the demise of Lehman Brothers in 2008, this time on concerns about the financial sector in the euro-zone’s periphery.

But the conclusion is too hasty, analysts said — and a recovery in markets since the middle of the week is confirming that view.

Euro rescue could help banks in regulatory battle

By Lionel Laurent and Huw Jones

PARIS/LONDON, May 10 (Reuters) – A $1 trillion rescue package to stabilise the euro could bolster European banks’ negotiating power as they attempt to fight stricter regulatory capital requirements they expect will hurt economic growth.

Europe’s lenders are already significant holders of sovereign euro debt and will be relied upon to buy more state-guaranteed debt as part of the rescue package, which is likely to see them push for extra concessions, analysts said.

“What there needs to be is a realisation among politicians that you cannot legislate and regulate the banks’ profitability away and expect them to keep buying your debts,” MF Global bank sector analyst Simon Maughan said.

PREVIEW-Reuters Summit-Banks face pressure to get dull

By Kevin Drawbaugh

WASHINGTON, April 25 (Reuters) – If the U.S. Congress approves financial regulation reform — and that looks likely to happen soon — banking stands to become a duller business.

On the “out” list will be unrestrained trading desks spitting out exotic debt instruments. On the “in” list will be the banker trying to find a solid 30-year fixed-rate mortgage for borrowers with good income.
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FACTBOX – How does the EU plan to shake up financial services?

BRUSSELS, April 7 (Reuters) – The European Union (EU) is embarking on an overhaul of financial services that politicians hope will send bankers back to their roots of no-frills lending to households and business.

Michel Barnier is the EU commissioner in charge of the shake up on regulations ranging from curbs on banker pay to a clampdown on speculators betting on government debt.

Here is a guide to the overhaul:

* One of Barnier’s priorities is writing a rule book for trading derivatives, a financial instrument whose value is linked to an asset such as a government bond or currency.

US Treasury delays first step in new capital rules

By Karey Wutkowski

WASHINGTON, Jan 20 (Reuters) – The U.S. Treasury Department has missed the first deadline in its work to draft tougher capital standards, raising questions about the timeline of international efforts to ensure stronger bank balance sheets.

Treasury had given itself until the end of 2009 for an internal working group to produce a report assessing existing capital requirements.

The report is expected to inform the department as it tries to reach a domestic and then international agreement on stricter capital and leverage standards.

White House regulatory plan won’t name systemic risk financial firms

WASHINGTON, Oct 27 (Reuters) – Financial firms that could pose a risk to the economy will not all be named at once under Obama administration plans to tighten bank and capital market regulations, a congressional aide said on Tuesday.

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Bank of Canada raps finance industry, says G20 determined to reshape

Bank of Canada Governor Mark Carney speaks during a news conference upon the release of the Monetary Policy Report in Ottawa October 22, 2009.  (File Photo) REUTERS/Chris Wattie       (CANADA BUSINESS POLITICS)   MONTREAL, Oct 26 (Reuters) – Bank of Canada Governor Mark Carney delivered a blunt rebuke to the global financial industry on Monday, saying it had shown insensitivity over high compensation and calling on it to get on board with reforms.

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U.S. won’t list systemically key firms – Geithner

U.S. Treasury Secretary Timothy Geithner finishes his testimony to Committee Chairman Representative Barney Frank (D-MA) (L, in monitor) and the House Financial Services Committee on Capitol Hill in Washington, March 26, 2009 (File photo) WASHINGTON, Sept 22 (Reuters) – U.S. Treasury Secretary Timothy Geithner said in testimony prepared for delivery on Wednesday that the United States would not identify in advance financial firms that it views as systemically important.
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UK says “living wills” to drive bank restructurings

British Financial Services Minister Paul Myners (file) By Huw Jones
LONDON, Sept 18 (Reuters) – Mandatory “living wills” for banks in Britain will spark major restructuring in the sector in the next few years, a UK minister said on Friday.

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