Financial Regulatory Forum

EXCLUSIVE-Bank cop reworked in Senate financial bill-sources

By Kevin Drawbaugh

WASHINGTON, Jan 21 (Reuters) – The beat walked by a proposed super-cop for banks is shrinking in the latest financial regulation reforms being debated in the U.S. Senate, said sources familiar with committee negotiations on Thursday.

Senate Banking Committee Chairman Christopher Dodd has called for the formation of a Financial Institutions Regulatory Administration (FIRA) to replace a current patchwork system that includes four bank supervisors in Washington.

But Dodd and other lawmakers, seeking compromise on this and other issues, are revising the FIRA proposal, said sources who asked not to be named because negotiations continue.


U.S. judge freezes Argentine central bank accounts

Argentine President Cristina Fernandez de Kirchner (L) accompanied by Banco Nacion's head Mercedes Marco del Pont (C) and Economy Minister Amado Boudou arrive at the Banco Nacion in Buenos Aires January 11, 2010. By Jorge Otaola

BUENOS AIRES, Jan 12 (Reuters) – A U.S. judge has frozen accounts held by Argentina’s Central Bank in the U.S. Federal Reserve, deepening a legal dispute over the Argentine government’s plan to use foreign reserves to repay debt.

Speculation has grown in Argentina in recent days that some holders of defaulted government bonds could try to get Central Bank funds embargoed because of a plan to use $6.6 billion in Central Bank foreign reserves to service the nation’s debt.

“The funds that the central bank has in the (U.S.) Federal Reserve have been embargoed,” an Argentine Central Bank spokesman said.

U.S. Senate panel nears agreement on role of Fed

By Rachelle Younglai

WASHINGTON, Jan 6 (Reuters) – As Congress moves to reform U.S. financial regulation, key senators are nearing bipartisan agreement on stripping the Federal Reserve of its authority to supervise banks, two people familiar with the matter said.

Senate Banking Committee Chairman Christopher Dodd, in charge of shepherding reform legislation through the Senate, has introduced a bill aimed at preventing a recurrence of the 2008 financial crisis that shook economies worldwide.

The outlook for that legislation and Dodd’s handling of it shifted suddenly on Wednesday, however, with news that he has decided not to seek re-election in November.

U.S. Fed’s Hoenig backs bank break-ups where needed

By Mark Felsenthal

ATLANTA, Jan 5 (Reuters) – A top U.S. Federal Reserve official on Tuesday backed stripping banks of risky operations, suggesting growing support for breaking up large firms to prevent excesses that could undermine financial stability.

At a meeting of top economists here, Kansas City Federal Reserve Bank President Thomas Hoenig voiced support for former Fed Chairman Paul Volcker’s recommendation that banks not be allowed to sponsor hedge or equity funds.

However, also like Volcker, Hoenig stopped short of calling for restoration of Glass-Steagall banking laws that barred large banks from affiliating with securities firms and engaging in the insurance business.

U.S. Fed proposes creation of new exit tool

By Pedro Nicolaci da Costa

WASHINGTON, Dec 28 (Reuters) – The U.S. Federal Reserve on Monday proposed the creation of a new mechanism it could use to withdraw money from the banking system when the time comes to tighten monetary policy.

The mechanism, known as a term deposit facility, would allow financial institutions to earn interest on loans of longer maturities to the central bank. The Fed already pays interest on banks’ overnight reserves.

Rates on such loans could be determined at auction or via a specified formula, the Fed said. Their length would not exceed one year, but would most likely range from one to six months.

U.S. House OKs Fed audit provision, eyes on Senate

By Mark Felsenthal

WASHINGTON, Dec 11 (Reuters) – The U.S. Federal Reserve on Friday lost the opening round in a battle to defeat a congressional plan to subject its interest rate decisions to audits, and will now look for a comeback victory when the Senate starts to move on regulatory reforms.

The House of Representatives delivered the loss with a 223-202 vote in favor of a revamp of financial regulation that, among other things, would pare Fed supervision over financial firms and its capacity to provide emergency help to banks, while allowing audits of monetary policy by a watchdog agency.

Fed Chairman Ben Bernanke and other top officials for weeks had argued the audit provision would result in a costly impression that the central bank’s rate decisions could be swayed by politics. They warned this could lead financial markets to fear inflationary policies, which in turn could drive up borrowing costs and undermine the economy.

Fed’s Tarullo: idea of big bank surcharge appealing

Federal Reserve Board of Governors member Daniel Tarullo looks down during testimony at the Senate Banking Committee on Capitol Hill in Washington, July 23, 2009.(File Photo)     REUTERS/Larry Downing By John Parry
NEW YORK, Nov 9 (Reuters) – U.S. Federal Reserve Governor Daniel Tarullo on Monday endorsed the idea of requiring big banks to hold more capital and renewed his suggestion that direct efforts to limit the size of banks may be worth considering.


U.S. pay czar: Will soon decide how to use clawback

Kenneth Feinberg, Special Master for TARP Executive Compensation, speaks to Reuters during an interview at his Washington law office, October 26, 2009.  REUTERS/Jason Reed   (UNITED STATES)   By Karey Wutkowski
WASHINGTON, Nov 2 (Reuters) – The U.S. pay czar said on Monday that he will determine “in the near future” how he will use his power to claw back pay at companies that have taken bailout money but is not currently in negotiations to do so.


US bank regulators warn on commercial real estate

The Stuyvesant Town and Peter Cooper Village private residential development (bottom C) is seen in New York, October 26, 2009.  New York State's highest court on Thursday ruled that the landlords of Manhattan's largest apartment complex improperly raised thousands of rents, further pushing the owners of the $5.4 billion deal struck at the height of a commercial real estate boom toward default.REUTERS/Shannon Stapleton  (UNITED STATES BUSINESS)   By Karey Wutkowski
WASHINGTON, Oct 30 (Reuters) – U.S regulators on Friday encouraged banks to modify troubled commercial real estate loans, which are seen as a looming danger spot for the banking industry.


WRAPUP 1-Obama financial reforms advance in U.S. Congress

Onlookers gather outside the historic Federal Hall where U.S. President Barack Obama is speaking in the heart of Wall Street in New York September 14, 2009. Obama, marking a year since Lehman Brothers collapsed, urged financial firms Monday not to fight regulatory reform and urged Congress to pass his proposals by the end of the year. (File Photo)     REUTERS/Larry Downing (UNITED STATES BUSINESS POLITICS)   By Kevin Drawbaugh
WASHINGTON, Oct 27 (Reuters) – The Obama administration made gains on Tuesday in its push for U.S. financial reform, unveiling a landmark bill to tackle systemic risk in the economy and winning congressional committee approval for a measure to expose hedge funds to more government scrutiny.The systemic risk bill would grant vast powers to a new systemic risk regulatory council, the Federal Reserve and the Federal Deposit Insurance Corp to monitor and address risks to economic stability posed by shaky financial holding companies.