WASHINGTON, June 8 (Reuters) – U.S. Senator Blanche Lincoln, an Arkansas moderate Democrat, is buoyed by winning nomination to a third term in the Senate but not sure of victory for her hot-button Wall Street reform — forcing big banks to spin off their swaps desks.
The proposal is one of the salient disputes for House-Senate negotiations that could begin this week on a financial regulatory reform law. The Senate endorsed the idea. The House is silent on the question.
By Huw Jones
LONDON, May 18 (Reuters) – LCH.Clearnet moved to reassure markets on Tuesday that its capital base was adequate despite a ratings downgrade at a time when regulators are finalising laws to force banks to clear vast numbers of derivatives.
Standard & Poor’s placed LCH.Clearnet’s rating on “negative credit watch” last week after one of its biggest customers, the transatlantic exchange NYSE Euronext said it would stop using the Anglo-French clearer from late 2012.
“The clearing activity itself is not dependent upon the creditworthiness of the clearing house,” LCH.Clearnet Chief Executive Roger Liddell told an industry conference.
– John Kemp is a Reuters market analyst. The views expressed are his own –
By John Kemp
LONDON, May 10 (Reuters) – May or shall. Even one small word can make a big difference. Lobbyists for financial services firms and officials from the Commodity Futures Trading Commission (CFTC) and the U.S. Treasury are sparring over a single word in the derivatives reform legislation being considered by the U.S. Senate.
At issue is the Commission’s authority to impose position limits on major energy contracts.
The White House published a top 10 list of “lobbyist loopholes” sought by Wall Street in Senate debate on an overhaul of financial regulation. Here is a link to the list, which tellingly omits the banking industry’s desire to strike a provision that would force banks to spin off their lucrative swaps desks.
– The authors is a Reuters Breakingviews columnists. The opinions expressed are his own –
By James Pethokoukis
WASHINGTON, May 3 (Reuters Breakingviews) – Is President Barack Obama losing control of financial reform? It is starting to seem that way. With the bill nearing its finale in the U.S Senate, Democratic legislators — and even some Republicans — seem to be scrambling to out-regulate each other while the White House keeps mum. The Obama administration defied its liberal base on nationalizing the banks last year and breaking them up this year. But as controversial amendments, such as those on derivatives, continue to emerge, it may be time to pipe up.
Of course, Team Obama would understandably prefer to lie low. It doesn’t want to backtrack entirely from the populist, get-tough-on-the-banks line. Arguing forcefully on behalf of letting banks keep their derivatives businesses, in particular, would risk message mismatch. That’s especially true after the Securities and Exchange Commission filed a lawsuit against Goldman Sachs over its involvement in a derivatives deal.
By Huw Jones
Put regulation in the hands of politicians and, well, it becomes politicised.
That, anyway, is what Europe’s new kid on lobbying block, the Association for Financial Markets in Europe (AFME’s), told the Reuters Regulation Summit about EU plans to crack down on opaque derivatives markets by insisting on central clearing of standardised contracts, trade reporting and even exchange trading. (more…)
WASHINGTON, April 23 (Reuters) – The Senate Agriculture Committee has proposed tough rules for the previously unregulated $450 trillion derivatives market, including a requirement for banks to spin off their swaps trading desks.
Banks and major financial companies that dominate the market are concerned the proposal could cut into their profits — and businesses ranging from oil companies to manufacturers that use derivatives to hedge risk are also worried the bill could hike their costs.
By Roberta Rampton
WASHINGTON, April 16 (Reuters) – Bombshell fraud charges against Goldman Sachs, one of the largest swaps dealers on Wall Street, give new impetus to a tough derivatives reform bill proposed by Senate Agriculture Chairman Blanche Lincoln on Friday.
The bill must be meshed with other proposals that are part of Congressional efforts to reform the financial regulatory system. But Lincoln is now placed to play a leading role in the debate on how the final package will impact on the $450 trillion over-the-counter swaps market.
With one eye to the November mid-term elections, the bill could find support from lawmakers keen to take a stand against excess on Wall Street. But it is unclear whether the White House would support going this far.
By Charles Abbott and Roberta Rampton
WASHINGTON, April 16 (Reuters) – Senator Blanche Lincoln, a self-styled “farmer’s daughter” facing a tough re-election race in Arkansas, had not been expected to become the latest Democrat to rail against the risky practices of Wall Street.
Lincoln, chairman of the Senate Agriculture Committee, is known for working across party lines on issues, but took Washington by surprise with an aggressive draft bill she was unveiling on Friday that she hopes will force big banks out of the $450 trillion over-the-counter derivatives market.
“My bill will put banks back into the business of banking and prevent future bailouts of Wall Street firms engaging in risky behavior,” Lincoln said in a statement.
By Jonathan Spicer
NEW YORK, April 13 (Reuters) – Big exchanges and clearinghouses are key planks in the U.S. government’s plan to revamp derivatives markets, but the fierce competitors warned in near-unison on Tuesday that lawmakers should not recklessly force more products through them than is appropriate. (more…)
