Financial Regulatory Forum

By Karey Wutkowski

WASHINGTON, Jan 12 (Reuters) – U.S. banks whose compensation plans encourage risk-taking would have to pay more for deposit insurance under a proposal floated by the Federal Deposit Insurance Corp on Tuesday.

The proposal is very preliminary and was contentious even among the members of the FDIC board, which is made up of regulators for different-sized financial firms. The board voted 3-2 to seek public comment on the proposal.

The plan would reward pay structures that tie banker pay to long-term performance and include “clawback” provisions to recoup payments.

Likewise, banks with risky payment schemes, including huge cash components and incentives for short-term results, would have to pay more in insurance premiums.

The proposal, which is not guaranteed to lead to rulemaking, said the FDIC would not seek to impose a specific level of compensation. Also, it would not require banks to provide more than a minimal amount of data, in an attempt to lighten the burden of the proposal.

By Rachelle Younglai

WASHINGTON, Jan 11 (Reuters) – Key U.S. senators are considering the creation of a special bankruptcy court for troubled financial services firms, a person familiar with the plans said on Monday.

Senate Banking Committee members are trying to toughen up parts of a draft bill that overhauls how the financial system is supervised. The draft, introduced by Senate Banking Committee Chairman Christopher Dodd, would create a system to unwind troubled financial firms.

But members of the committee want a more specific and tougher regime to deal with troubled financial firms after the federal government used billions of dollars in taxpayer funds to prop up firms like Bank of America.

By Karey Wutkowski and Kevin Drawbaugh

WASHINGTON, Dec 8 (Reuters) – U.S. industry is freshening its attack on financial reform, pledging more cash to defeat a new consumer agency and raising concerns over a provision that could force secured creditors to shoulder losses.

The U.S. Chamber of Commerce on Tuesday unveiled a new radio and television advertising campaign that portrays the proposed Consumer Financial Protection Agency as a threat to small business and economic growth.

The push comes just one day before the full U.S. House of Representatives is scheduled to start debating a massive legislative package that would overhaul financial regulation.

   By Karey Wutkowski
WASHINGTON, Nov 20 (Reuters) – As the biggest U.S. banks clamor to defeat Congressional measures that could break up their firms or slap a big tax on their transactions, another costly proposal is quietly gaining steam.

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    ISTANBUL, Oct 5 (Reuters) -   Federal Deposit Insurance Corp Chairman Sheila Bair told a group of international bankers on Sunday that officials might want to consider “the very strong medicine” of limiting secured claims to 80 percent, although she said such a proposal would need to be carefully weighed. (more…)

WASHINGTON, Sept 23 (Reuters) – U.S. regulators will meet next week to discuss how to rebuild the deposit insurance fund, which has been depleted by a sharp increase in bank failures, the Federal Deposit Insurance Corp said in an agenda notice on Wednesday.

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By Karey Wutkowski
WASHINGTON, Sept 9 (Reuters) – Decreasing the number of U.S. agencies that police banks is an idea gaining momentum in Congress, even though bolder efforts to rip up the overall financial regulatory system and start fresh have stalled.

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   WASHINGTON, Sept 1 (Reuters) – The chairman of the Federal Deposit Insurance Corp said commercial real estate issues will increasingly drive U.S. bank failures.
   FDIC head Sheila Bair told CNBC Tuesday evening that commercial real estate loans remain a “looming problem” for banks’ balance sheets and she expects the area to increasingly be a driver for bank failures during the remainder of this year and 2010.
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Sept 1 (Reuters) – A single regulator for all U.S. banks is not the solution to streamline the financial regulatory system, Federal Deposit Insurance Corp Chairman Sheila Bair wrote in an opinion column in the New York Times.
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WASHINGTON, Aug 28 (Reuters) – U.S. bank regulators said on Friday that they are extending the amount of time they keep new banks under strict supervision, saying recent bank failures have indicated that new institutions pose an elevated risk to the insurance fund that safeguards bank deposits.

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