Financial Regulatory Forum

US Senate OKs plan for dismantling ailing financial giants – details

WASHINGTON, May 5 (Reuters) – The U.S. Senate on Wednesday approved an amendment to a sweeping Wall Street reform bill that would set up a new government protocol for seizing and dismantling large financial firms that are in distress.

Here is a description of the bipartisan plan, in a statement by Senate Banking Committee Chairman Christopher Dodd, a Democrat.

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Bipartisan US financial reform deal uncertain – Sen. Dodd

By Kevin Drawbaugh

WASHINGTON, March 5 (Reuters) – Senator Christopher Dodd, chief negotiator for the Democrats in U.S. Senate talks on financial regulation reform, said on Friday he was uncertain whether bipartisan support for a compromise bill could be achieved.

With one of the Obama administration’s top domestic policy priorities in the balance, Dodd sounded wary but hopeful following weeks of discussions that have snagged on a proposal to create a new financial consumer watchdog.

“While we do not have a bipartisan agreement yet at all, we’re getting there, we’re trying. I don’t know if it will happen or not,” Dodd said in remarks on the Senate floor.

Big banks’ risky trading should be curbed-Volcker

volcker 2 WASHINGTON, Feb 1 (Reuters) – White House adviser Paul Volcker will urge Congress to curb the risks taken by large banks to help prevent them from being treated as “too big to fail,” according to testimony obtained by Reuters on Monday.
Detailing a recent proposal known as “the Volcker rule,” the former Federal Reserve Chairman will tell lawmakers that commercial banks’ proprietary and speculative activities should not be protected by the government.
He will also urge international consensus on “appropriate” actions to restrict commercial banks’ activities.
Volcker — an adviser to President Barack Obama whose star has risen in recent weeks — will appear before the Senate Banking Committee on Tuesday to defend the administration’s latest proposal to rein in the banks.
In January, Obama proposed limiting commercial banks’ ability to engage in proprietary trading, to end their ties to hedge funds and private equity funds and to restrict the future growth of large banks beyond a new market share cap.
In his testimony, Volcker will say there are strong conflicts of interest inherent in participation by commercial banks in proprietary or private investment activity.
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BoE’s King calls for radical reform of banks

By Tim Castle

LONDON, Jan 26 (Reuters) – Radical reform is needed to make the banking system safer, Britain’s top central banker said on Tuesday, adding U.S. President Barack Obama’s plan to curb some activities would not fully solve the “too big to fail” problem.

Bank of England Governor Mervyn King said there was no “silver bullet” to solve the banking sector’s problems, and tinkering with regulation alone, such as bumping up capital and liquidity requirements, would not be enough when “stuff happens”.

Radical reforms were also needed to change the liability structure of the banking system, so creditors can’t simply walk away unscathed when a bank fails, King said.

Germany’s Merkel says G20 needs to act on big banks’ influence

Merkel warning    BERLIN, Jan 20 (Reuters) – The Group of 20 economic powers need to develop a set of rules to prevent banks becoming so big that they can hold governments to ransom, German Chancellor Angela Merkel said on Wednesday. (more…)

Swiss should tighten rules on UBS, CS further-OECD

Credit Suisse, UBS: Too big to fail?   By Sven Egenter
   BERNE, Jan 15 (Reuters) – Switzerland should tighten the reins on UBS and Credit Suisse further as a failure of the banks may push the economy over the edge, the OCED said on Friday, backing Swiss regulators in their push for tougher regulation. (more…)

Barons of Wall St concede failures, defend pay

By Kevin Drawbaugh

WASHINGTON, Jan 13 (Reuters) – Top executives of Wall Street’s biggest banks acknowledged broad failures as they testified to a U.S. commission looking into the financial crisis, while the White House said an industry apology was in order.

With U.S. unemployment near a 26-year-high after the worst recession in decades, public fury is growing over the cost of taxpayer bailouts and huge bonuses for bankers, now that the industry has rebounded from the 2008 meltdown.

The top executives acknowledged mistakes in managing risk but defended their pay packages and called for modest regulatory changes.

Bank of America’s Moynihan urges focus on “contagion risk,” not breakups

CHARLOTTE, North Carolina, Jan 13 (Reuters) – Bank of America Corp Chief Executive Brian Moynihan said on Wednesday banking regulation needs to focus more closely on limiting “contagion risk” between financial firms, rather than breaking up the biggest U.S. banks.

Moynihan called for broader changes in banking industry regulation — from accounting rules to leverage and capital requirements — to shore up a system that he said created a mix of combustible elements during the crisis.

“That starts with recognizing that ‘interconnectedness’ and not ‘bigness’ is what led to the need for taxpayer bailouts,” Moynihan said in testimony prepared for his appearance before the Financial Crisis Inquiry Commission, a 10-member panel formed by the U.S. Congress to examine the causes of the financial meltdown.

Banks sense danger, warn U.S. Congress on breakup power

By Kevin Drawbaugh
WASHINGTON, Nov 16 (Reuters) – Some of the world’s largest financial firms on Monday urged a top U.S. lawmaker not to pursue big bank break-up legislation, an idea attracting interest in Congress and causing alarm on Wall Street.

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US senator offers ‘too big to fail’ bank break-up bill

Senator-elect Bernie Sanders (I-VT) is interviewed by a Reuters reporter at Sanders' office in Burlington, Vermont November 28, 2006. (File photo) REUTERS/Brian Snyder    (UNITED STATES)   WASHINGTON, Nov 6 (Reuters) – Senator Bernie Sanders on Friday introduced legislation that would make the U.S. Treasury Department identify and break up financial institutions that are “too big to fail.”

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