Financial Regulatory Forum

Financial reform talks break down in U.S. Senate

Dodd and Shelby, in happier times

Dodd and Shelby, in happier times

By Kevin Drawbaugh and Kim Dixon

WASHINGTON, Feb 5 (Reuters) – Bipartisan efforts to tighten U.S. financial regulation ground to a halt in the Senate on Friday, leaving Democrats to proceed on their own and painting Republicans into an uncomfortable political corner.

After months of public debate and closed-door talks, Senate Banking Committee Chairman Christopher Dodd, chief negotiator for the Democrats, said he is at an impasse with his Republican counterpart, Senator Richard Shelby.

Dodd said in a statement he will begin drafting new legislation to be considered later this month.

“Last night, Senator Shelby assured me that he is still committed to finding a consensus on financial reform, but for now we have reached an impasse,” Dodd said.

“While I still hope that we will ultimately have a consensus package, it is time to move the process forward.”

Volcker urges U.S. curbs on big banks’ risky trades

By Kevin Drawbaugh and Rachelle Younglai

WASHINGTON, Feb 2 (Reuters) – White House economic adviser Paul Volcker urged Congress on Tuesday to rein in risky investing by big banks to prevent them from becoming “too big to fail.”

The former Federal Reserve chairman — a sage of monetary policy and crusader for tighter regulation whose star is rising in the Obama administration,– faced questions from lawmakers about President Barack Obama’s latest proposals affecting big banks.

Obama stunned financial markets in late January by calling for new limits on banks’ ability to do proprietary trading, or buying and selling of investments for their own accounts unrelated to customers.

US Senate panel to hear from Volcker on bank plan

WASHINGTON, Jan 26 (Reuters) – Former Federal Reserve Chairman Paul Volcker is tentatively scheduled to testify next week on the latest White House bank regulation proposals to the U.S. Senate Banking Committee, two Democratic aides told Reuters on Tuesday.

The panel is also working on another hearing with Treasury Department officials on the proposals unveiled last week to limit the size of banks, their proprietary trading and their links to hedge funds and private equity, the aides said.


U.S. Senate banking panel moves to muzzle consumer watchdog

By Kevin Drawbaugh and Rachelle Younglai

WASHINGTON, Jan 12 (Reuters) – The Obama administration’s proposal to create a new U.S. agency to protect financial consumers is fast losing support in the U.S. Senate Banking Committee, said lobbyists and analysts on Tuesday.

In a potential setback for the White House, committee members were said to be talking about reducing the proposed agency’s status, possibly making it instead a division of a new systemic risk regulator or a new super-cop for banks.

Stripped of independent agency status, the watchdog would be less formidable than President Barack Obama’s proposal for a new U.S. Consumer Financial Protection Agency, or CFPA.

Johnson seen taking over as U.S. Senate banking panel chief

By Karey Wutkowski and Rachelle Younglai

WASHINGTON, Jan 6 (Reuters) – South Dakota Democratic Senator Tim Johnson, a champion of community banks and credit card companies, is expected to take over the chairmanship of the influential U.S. Senate Banking Committee in 2011.

With the announcement on Wednesday by Connecticut Senator Christopher Dodd that he will not seek re-election in November, Johnson is next on the seniority list to lead the panel, which is in the midst of a debate over financial regulation reform.

In a flurry of speculation following Dodd’s news, financial services industry lobbyists and analysts said that the banking committee under Johnson would likely be more favorable to some business sectors than it has been under Dodd.

U.S. Senate panel nears agreement on role of Fed

By Rachelle Younglai

WASHINGTON, Jan 6 (Reuters) – As Congress moves to reform U.S. financial regulation, key senators are nearing bipartisan agreement on stripping the Federal Reserve of its authority to supervise banks, two people familiar with the matter said.

Senate Banking Committee Chairman Christopher Dodd, in charge of shepherding reform legislation through the Senate, has introduced a bill aimed at preventing a recurrence of the 2008 financial crisis that shook economies worldwide.

The outlook for that legislation and Dodd’s handling of it shifted suddenly on Wednesday, however, with news that he has decided not to seek re-election in November.

Banking chief Dodd to leave US Senate

By Thomas Ferraro and Steve Holland

WASHINGTON, Jan 6 (Reuters) – Veteran Democratic Senator Christopher Dodd,  leader of a financial regulation overhaul in the Senate, said on Wednesday he will not seek re-election in November in recognition that he faced an uphill battle and underscoring upheaval facing President Barack Obama’s Democrats.

Dodd, 65, chairman of the Senate Banking Committee, has been dogged by questions over his financial industry connections and was trailing badly in polls in his home state of Connecticut.

Dodd’s decision may well help Democrats hang on to his seat. Republicans conceded that Democratic chances would improve in the event that Connecticut’s attorney general, Richard Blumenthal, runs for the seat, and he told CNBC that he planned to do so.

Global financial regulation overhaul seen in 2010

By Kevin Drawbaugh and Huw Jones

WASHINGTON/LONDON, Jan 6 (Reuters) – Global financial regulation has changed little since the 2008 banking crisis, but that won’t be the case much longer.

U.S. and EU authorities are expected to hammer out the definite shape of a new regulatory order in 2010 that will fundamentally change how world banks and markets operate.

Stricter limits on leverage and capital will emerge, leading eventually to slimmer profits for banks, policy analysts said. Formerly unregulated off-exchange derivatives markets will have to conform to new procedures.

Banking chief Dodd to leave US Senate – sources

By Thomas Ferraro

WASHINGTON, Jan 6 (Reuters) – U.S. Senate Banking Committee Chairman Christopher Dodd, a key player in still-unfinished work to overhaul U.S. financial regulations, will announce on Wednesday he will not seek re-election in November, two senior Democratic party aides said.

The news, coupled with another Democrat’s retirement announcement, underscored the fragility of the Democrats’ Senate majority, which is just enough to push President Barack Obama’s agenda past Republican procedural obstacles.

The aides offered no reason for Dodd’s decision, but it had been clear for months the Democratic lawmaker from Connecticut, dogged by questions over his financial industry connections, had faced the prospect of being voted out of office.

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.