Financial Regulatory Forum

U.S. financial scandals seen sparking 2010 zeal

By Dan Margolies

WASHINGTON, Dec 29 (Reuters) – The year of the Ponzi scheme will be followed by heightened regulation and more aggressive prosecutions, experts say, as U.S. officials respond to past failures.

Bernard Madoff’s massive $65-billion fraud grabbed most of the headlines in 2009, but other schemes that paid early investors with money from new victims came to light as the recession dried up new money and Madoff-inspired vigilance boosted awareness.

As 2010 approaches, regulators and prosecutors are scrambling to uncover and pursue more fraudsters, while lawmakers seek to close regulatory gaps through legislation and give enforcement officials more resources.

John Coffee, a law professor at Columbia University, said the Securities and Exchange Commission became a significantly tougher enforcement agency in 2009 and will probably issue lots more criminal referrals next year.

“The brief era of light-touch regulation… is gone, apparently,” he said.

Key U.S. senators see deal on regulatory reform

   WASHINGTON, Dec 23 (Reuters) – The top Democrat and Republican on the U.S. Senate Banking Committee said on Wednesday they hoped to resolve their differences on financial regulatory reforms before the Senate reconvenes in January.

“For the last few weeks we, and other members of the Banking Committee, have been engaged in serious negotiations, with the goal of producing a bill that strengthens our regulatory structure and makes our economy more secure,” Senators Christopher Dodd and Richard Shelby said in a joint statement.

“We have made meaningful progress and we hope to resolve the remaining issues before we reconvene in January,” they said.

U.S. financial crisis panel sets first hearings

WASHINGTON, Dec 22 (Reuters) – A U.S. commission created by Congress to investigate the financial crisis has scheduled its first public hearings for Jan. 13 and 14, more than a year since the crisis shook banks and capital markets worldwide.

No witnesses were named by the Financial Crisis Inquiry Commission in a statement distributed on Tuesday. It said the 10-member panel will hold hearings throughout 2010 — a period in which the Senate will be debating regulatory reforms.

Deliberations by the commission could spark interest in the debate in the Senate Banking Committee over reforms. The House of Representatives on Dec. 11 approved a comprehensive bill to tighten government bank and financial market oversight.

Basel group wants stricter bank standards by 2012

The Bank for International Settlements (BIS), central bank to the world's central banks, and parent organisation of the Basel Committee on banking supervision. By Sven Egenter and John O’Donnell

ZURICH/BRUSSELS, Dec 17 (Reuters) – Banks face having to hoard more funds or turn to investors for fresh capital within as little as three years under proposals by a body which guides global financial regulation.

Seeking to prevent this year’s financial crisis from being repeated, the Basel Committee of central bankers and supervisors on Thursday demanded stricter rules for the capital which banks maintain to shield their depositors and shareholders from loss.

Although its recommendations are not binding, they herald a tougher regime for banks; regions such as the European Union will use them as a reference, and higher capital requirements may end up slowing down lending or investment banking business. On Thursday, the EU said it was studying the Basel report.

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.

U.S. House approves sweeping financial regulation overhaul

By Kevin Drawbaugh

WASHINGTON, Dec 11 (Reuters) – The U.S. House of Representatives approved the biggest changes in financial regulation since the Great Depression on Friday, marking a win for the Obama administration and top Democrats in Congress.

The sweeping bill, which will have to be reconciled with any measure the slower-moving Senate might eventually approve, aims to safeguard the financial system and ward off future crises of the type that punished the nation in the past year with its deepest recession since the 1930s.

The House voted 223-202 to pass the 1,279-page bill, which was hammered out in the months since last year’s crisis convinced Democrats of an urgent need for reform. All of the chamber’s Republicans and 27 Democrats voted against bill.

U.S. House poised to back financial rules overhaul

By Kevin Drawbaugh

WASHINGTON, Dec 11 (Reuters) – The U.S. House of Representatives was expected to approve the biggest changes in financial regulation since the Great Depression on Friday, marking a win for the Obama administration.

With the Senate due to debate reforms well into next year, the House could complete its legislative work by passing a 1,279-page bill that has been hammered out in the months since 2008′s financial crisis.

The bill still faces potential amendments on the House floor, including one that would gut a key provision — the proposed creation of a Consumer Financial Protection Agency (CFPA) — and another to change mortgage bankruptcy law.

Financial reforms win procedural vote in US House

By Kevin Drawbaugh

WASHINGTON, Dec 9 (Reuters) – The U.S. House of Representatives approved a procedural rule on Wednesday that cleared the way for floor debate to begin on legislation that would give the government broad new powers over large financial firms and tighten bank and capital market regulation.

In a 235-177 vote, Democrats pushed through the rule, with only a handful from their own ranks voting in opposition, after settling differences among themselves over more than 200 proposed amendments. All Republicans voting opposed the rule.

President Barack Obama and congressional Democrats see financial regulation reform as crucial to preventing a repeat of last year’s financial crisis and the taxpayer bailouts that followed of companies such as AIG and Citigroup.

Darling says will not harm UK’s financial sector

 A man looks out over Hampstead Heath, with the City of London in the background October 29, 2009.   By Matt Falloon and Steve Slater

HORSHAM, England, Dec 7 (Reuters) – The British government will not do anything to hurt London’s financial prowess and would rather go too far with economic support measures than not go far enough, Finance Minister Alistair Darling said on Monday.

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France’s Barnier expected to get EU financial services post -envoys

Michael Barnier (2nd R), then foreign minister of France, sits between U.N. Deputy Secretary General Louise Frechette (R) and French Ambassador to the United Nations Jean Marc de la Sabliere (2nd L) at a luncheon for the five permanent members of the U.N. Security Council 59th United Nations General Assembly, September 23, 2004. (File photo) REUTERS/Henny Ray Abrams  By Julien Toyer and John O’Donnell
BRUSSELS, Nov 20 (Reuters) – A former French foreign minister is expected to take charge of financial services in the European Union, diplomats said, a move that would unsettle bankers worried he may take a hard line with the industry.
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