Financial Regulatory Forum

US bank regulator: proprietary trading not at core of crisis

WASHINGTON, Feb 2 (Reuters) – The regulator of the largest U.S. banks said on Tuesday that proprietary trading was not at the root of the financial crisis and warned that excessive limits could impair some of banks’ central functions.

“It’s one thing to talk about pure proprietary trading as a business where the bank is in the business of taking bets on particular markets for its own account. And I understand the concern with that going forward, although this was not a big source of the problems that led to the crisis,” Comptroller of the Currency John Dugan told reporters on the sidelines of a securitization conference.

President Barack Obama late last month proposed new limits on big banks’ risk-taking, including curbs on commercial banks’ ability to engage in trading for their own profit instead of for clients.

The proposals would also restrict the banks’ ability to invest in, sponsor or own a hedge fund or private equity fund.

Details of the so-called “Volcker rule” have been scant, and it is unclear if lawmakers will include a version of it in Congress’ sweeping regulatory reform package. White House economic adviser Paul Volcker was to testify on the proposal later Tuesday before the Senate Banking Committee.

FACTBOX-One year on, US’s Geithner faces big challenges

WASHINGTON, Jan 26 (Reuters) – U.S. Treasury Secretary Timothy Geithner is in the eye of a political storm as he tries to deflect congressional inquiry into his role in bailing out insurer AIG and battle a perception that his influence is diminishing.

The White House on numerous occasions in recent weeks has reiterated its support for Geithner, a former New York Federal Reserve Bank president sworn in as Treasury chief one year ago.

A decision last week by President Barack Obama to start a fight with banks by limiting their size seemed to highlight an expanding policy role for Obama economic adviser and former Fed Chairman Paul Volcker, with Geithner less visible.

Obama to target excessive financial risk-taking

By Alister Bull and Karey Wutkowski

WASHINGTON, Jan 20 (Reuters) – President Barack Obama, reeling from an election defeat in the U.S. Senate, will propose stricter limits on financial risk-taking on Thursday in a move that may recall Depression-era curbs on banks.

The president will announce a series of measures to cut down on excessive risk-taking as part of a revamp of the country’s financial regulatory system, a senior Obama official said on Wednesday.

The move could also help the White House tap into public rage over Wall Street excess after Obama’s Democratic Party was rebuffed by voters in Massachusetts, who elected Republican Scott Brown to the U.S. senate.

White House regulatory plan won’t name systemic risk financial firms

WASHINGTON, Oct 27 (Reuters) – Financial firms that could pose a risk to the economy will not all be named at once under Obama administration plans to tighten bank and capital market regulations, a congressional aide said on Tuesday.

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