Financial Regulatory Forum

ANALYSIS-U.S. banks prepare to battle over OTC derivatives

U.S. Representative Barney Frank By Steve Eder and Rachelle Younglai
NEW YORK/WASHINGTON, July 13 (Reuters) – The banking industry is gearing up for a battle over the lucrative derivatives market, but will have to fight hard to head off a crackdown by regulators.
Calls to regulate the $450 trillion private market — long seen as the Wild West of the financial services sector — have been building for months. Policymakers were caught off guard when a type of derivative — credit default swaps — nearly toppled insurer American International Group Inc and global financial markets. (more…)

U.S. government auto task-force chief to step down

Steve Rattner WASHINGTON/NEW YORK, July 13 (Reuters) – Steven Rattner will leave as head of the U.S. autos task force, which oversaw bankruptcies at General Motors Corp and Chrysler Group, at a time when a probe into how the private equity firm he co-founded gained New York pension business has intensified. (more…)

CDS players propose changes in U.S., Europe clearing

NEW YORK, July 13 (Reuters) – Large dealers and fund managers in the $26.5 trillion credit default swap market have proposed regulatory changes in the U.S. and Europe to protect client funds backing credit default swaps in central clearinghouses, the New York Federal Reserve said on Monday. (more…)

EU drafts sanctions for risky bonuses, tighter capital rules

Flags at EU Parliament
By Huw Jones
LONDON/BRUSSELS, July 13 (Reuters) – The European Union on Monday unveiled a new law that punishes banks who encourage too much risk-taking with their policies on pay, in an effort to put an end to the practices blamed for the credit crunch.
A draft law published by the European Commission tightens EU rules on bank capital and requires banks to improve disclosure of the holdings in securitised products, bidding to apply lessons from the worst financial crisis since the 1930s. (more…)

CIT survival ensnared in regulatory battle

By Elinor Comlay and Karey Wutkowski
NEW YORK/WASHINGTON, July 13 (Reuters) – The survival of CIT Group Inc <CIT.N>, a key source of financing for thousands of small and medium-sized companies, became ensnared in disagreements between regulators in Washington on Monday. (more…)

Basel panel sets higher capital rules for bank trading books

BASEL, Switzerland, July 13 (Reuters) – The Basel Committee published the final version on Monday of its new rules that will force banks to tie up more capital to offset trading book risks from the end of 2010. (more…)

U.S. judge delays UBS tax trial, parties in settlement talks

ZURICH/MIAMI, July 13 (Reuters) – A federal judge in Miami approved a delay in a high-profile trial on Monday in which U.S. tax authorities hoped to force UBS AG to reveal the identities of thousands of Americans suspected of using the Swiss bank to evade taxes. (more…)

Italy’s Consob calls for intnl short-selling regulation

   MILAN, July 13 (Reuters) – Italian bourse regulator Consob is calling for international regulation for short-selling, its chairman, Lamberto Cardia, said on Monday.
(more…)

Obama administration seeks more SEC investor protection

   By David Lawder
   WASHINGTON, July 10 (Reuters) – The Obama administration  wants to give the U.S. Securities and Exchange Commission broad powers to identify and ban compensation practices at investment brokers and advisers that interfere with their fiduciary duties to clients.
(more…)

Dutch government tells banks: don’t count on state

    By Ben Berkowitz

    AMSTERDAM, July 10 (Reuters) – The Dutch government wants banks to jointly guarantee customer savings, it said in a report on Friday, as it warned the sector not to rely on state aid or the hope that such aid will be available in the future.  In a more prudent future, banks would offer a narrower range of services and be more tightly regulated, according to the report. (more…)

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