Financial Regulatory Forum

FACTBOX-US swaps reforms proposed by Agriculture panel

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.

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Democrats press advantage on financial reform

   By Andy Sullivan and Kevin Drawbaugh
   WASHINGTON, April 21 (Reuters) – Democrats in the U.S. Senate pressed forward on a sweeping regulation overhaul on Wednesday, backing a measure to drive banks from the lucrative derivatives market at the heart of the financial crisis. (more…)

from The Great Debate:

Financial reform bill puts GOP in dilemma

- John Kemp is a Reuters market analyst. The views expressed are his own -

Financial reform legislation is set to reach the Senate floor as early as this week. With U.S. President Barack Obama and Senate Majority Leader Harry Reid holding most of the cards, pressure on Senate Republicans and Wall Street to find a compromise is becoming intense.

The Senate Banking Committee's own version of reform (S 3217) was placed on the calendar of the Senate late last week (Calendar No 349) from where the Democratic majority leader can call it up for debate at any time.

In practice, Reid will wait until the Senate Agriculture Committee has had time to approve its own version of derivatives rules. The Agriculture Committee claims jurisdiction over some aspects of derivatives law. It is due to meet on Wednesday to approve a bill drafted by Chairman Blanche Lincoln (D, Arkansas).

Under Senate Rules, the majority leader has almost absolute control over the order in which legislation is called up for debate. Once the Lincoln bill has been reported out of committee, Reid will have discretion to call up the banking and agriculture committee bills any time, which could be as early as Thursday this week.

FACTBOX – How does the EU plan to shake up financial services?

BRUSSELS, April 7 (Reuters) – The European Union (EU) is embarking on an overhaul of financial services that politicians hope will send bankers back to their roots of no-frills lending to households and business.

Michel Barnier is the EU commissioner in charge of the shake up on regulations ranging from curbs on banker pay to a clampdown on speculators betting on government debt.

Here is a guide to the overhaul:

* One of Barnier’s priorities is writing a rule book for trading derivatives, a financial instrument whose value is linked to an asset such as a government bond or currency.

ANALYSIS – Obama tackles Wall Street reform in next big push

By Caren Bohan

WASHINGTON, March 25 (Reuters) – Fresh from his victory on landmark healthcare legislation, U.S. President Barack Obama is ready to take on Wall Street.

In the same week Obama signed into law his sweeping healthcare plan, his administration began a publicity blitz to sell his proposal to reshape the financial regulatory system.

Obama held a strategy session on Wednesday with two Democrats, Senate Banking Committee Chairman Christopher Dodd and House of Representatives Financial Services Committee Chairman Barney Frank, who are leading the effort to pass the plan in Congress.

ANALYSIS – Dodd bill takes pass on key U.S. broker reforms

By Helen Kearney

NEW YORK, March 23 (Reuters) – As Senator Christopher Dodd’s financial regulatory reform bill heads to the full Senate, brokerages for now have escaped tougher regulation thanks largely to fierce lobbying by insurers.

A bill approved by the Senate Banking Committee on Tuesday took a pass on two big issues affecting financial advisers — a uniform fiduciary standard for all professionals advising investors and rules that mandate brokerage customers take disputes to an industry arbitration panel.

While the terms of the legislation are likely to change during debate by the full Senate and when Rep. Barney Frank’s House Financial Services Committee weighs in, both issues for now will only be the subject of further study.

SCENARIOS-How U.S. financial regulation fight might play out

March 23 (Reuters) – The financial regulation debate has a long way to go in the U.S. Congress, with the action shifting to the full Senate and big headlines unlikely until April.

The Senate Banking Committee approved a sweeping Democratic bill by a party-line vote on Monday. That bill is now headed for the Senate floor, but not before lawmakers try again to hash out a bipartisan deal in closed-door negotiations.

With Congress adjourning on Friday for a two-week holiday break, the off-line financial reform talks probably will not produce results before lawmakers return next month.

BREAKINGVIEWS-U.S. financial reform process takes risky turn

– The author is a Reuters Breakingviews columnist. The opinions expressed are his own –

By James Pethokoukis

WASHINGTON, March 23 (Reuters Breakingviews) – The effort to reform the U.S. financial regulatory system was supposed to show the Senate working more or less as intended — bipartisan up to a point, and largely non-confrontational. But it’s starting to follow the healthcare bill’s more contentious path.

Hundreds of Republican and Democratic amendments to the legislation authored by Democrat Chris Dodd, the panel’s chairman, were supposed to be hashed out by the relatively expert Senate Banking Committee this week. Instead, Republicans yanked their proposed changes, and the bill was approved with just Democratic support. Now it will be hashed out on the Senate floor. Democrats will need to bring at least one Republican across the aisle to hit the 60 votes needed to be certain of passage.

Once skeptical, U.S. Congress warms to CFTC’s Gensler

By Christopher Doering

WASHINGTON, March 19 (Reuters) – Gary Gensler, who once supported market deregulation blamed for the recent financial meltdown, has been winning over members of Congress who had been skeptical of his ability to rein in Wall Street as the top U.S. futures regulator.

A former partner at Goldman Sachs, Gensler has quickly become a go-to guy for Congress as it navigates a sea of complex proposals to regulate the $300 trillion swaps market.

The biggest test of his influence as chairman of the Commodity Futures Trading Commission will occur next week when key Senate committees hash out landmark derivatives reforms that will go a long way toward steering the future of financial reform in Washington.

ANALYSIS-Deck chairs secure aboard USS Financial Regulation

By Kevin Drawbaugh

WASHINGTON, March 21 (Reuters) – The big U.S. government agencies in charge of policing banks and markets, despite being excoriated over the severe 2008-2009 financial crisis, have successfully dodged a major structural shake-up.

While Congress may yet clamp down on the financial industry from Wall Street to Main Street, a top-to-bottom overhaul of the nation’s regulatory apparatus — which seemed like a certainty a year and a half ago — is not going to happen.

As political reality has tempered reform proposals, plans to reconfigure a patchwork bureaucracy stitched together over decades have faded from view, with just one agency closure still on the negotiating table.

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