Financial Regulatory Forum

Bank reform may have $220 billion global capital hit – analysts

LONDON, Feb 17 (Reuters) – Top global banks will need an extra $221 billion of capital and see annual profits slump by $110 billion if all proposed regulations to reform the industry are brought in, leading analysts said on Wednesday.

If all the initiatives from regulators are implemented it would cut the average return on equity to 5.4 percent from 13.3 percent next year, hurt economic growth and raise costs for bank services, JPMorgan analysts warned.

“The cumulative impact of all the proposed regulation suggests that there is a real risk that we may move from a system that was under regulated to one that is over regulated and that that could cause a significant increase in lending costs and a negative impact on the economy,” Nick O’Donohue, head of research at JPMorgan, said in a research note.

The capital needs of banks would be $221 billion higher in the extreme event that all the reforms were brought in.

British banks alone would need $91 billion, other European banks would need $86 billion and U.S. banks would need $44 billion, JPMorgan estimated.

U.S. watchdog probes firms’ trading tips – sources

NEW YORK/WASHINGTON, Dec 18 (Reuters) – The U.S. brokerage watchdog is probing how Wall Street firms, including JP Morgan Chase and Citigroup Inc, offer stock research, two people familiar with the probe said on Friday.

The Financial Industry Regulatory Authority, which supervises nearly 4,800 brokerage firms, sent letters to more than 10 firms in early November asking for information related to their unpublished research material, one of the people said.

The same person said FINRA is eyeing the firms’ policies related to their delivery of the unpublished research material. Both sources requested anonymity because the sweep has not been made public.

US Treasury to net $936 million from JPMorgan warrants

WASHINGTON, Dec 11 (Reuters) – The U.S. Treasury Department on Friday said it priced warrants in JPMorgan Chase & Co at $10.75 per warrant in a deal that will bring U.S. taxpayers net proceeds of $936.06 million.

The 88.4 million warrants to purchase common stock in JPMorgan were priced in a modified Dutch auction. The sale marks the disposal of the government’s remaining investment in the banking giant, which the Treasury received last year in exchange for $25 billion in bailout money.

The closing of the warrant sale is expected to occur on or about Dec. 16. Deutsche Bank Securities was the sole bookrunner, with Ramirez & Co., The Williams Capital Group and Utendahl Capital Group co-managing the offering.

U.S. extends TALF lending program for commercial real estate

By Mark Felsenthal and Al Yoon
WASHINGTON/NEW YORK, Aug 17 (Reuters) – The U.S. Federal Reserve moved on Monday to boost credit to the ailing market for commercial real estate by extending to mid-2010 an emergency lending program.

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Obama’s “pay czar” says weighing power to claw back compensation

By Steve Eder

MARTHA’S VINEYARD, MASSACHUSETTS (Reuters) – Kenneth Feinberg, the Obama administration’s pay czar, said on Sunday he has broad and “binding” authority over executive compensation, including the ability to “claw back” money already paid, and he is weighing how and whether to use that power. (more…)

FDIC warns U.S. banks they may need more home-equity reserves

By Jonathan Stempel
NEW YORK, Aug 3 (Reuters) – A U.S. regulator said on Monday banks may need to boost their reserves for losses on home equity loans, after housing prices fell by roughly one-third from their 2006 peak. (more…)

Bonuses topped profits at some U.S. bailout banks – NY attorney general

AIG/CUOMO By Grant McCool

NEW YORK (Reuters) – Bonuses paid to executives at nine banks that received U.S. government bailout money in 2008 were greater than net income at some of the banks, the office of New York Attorney General Andrew Cuomo said on Thursday.

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