Financial Regulatory Forum

By Stuart Gittleman

NEW YORK, June 12 (Thomson Reuters Accelus) – A need to break up big banks is one of the several lessons policy makers should have learned from the financial crisis that have either been ignored or forgotten, according to Phil Angelides, who chaired the congressionally appointed Financial Crisis Inquiry Commission.

If the largest banks can only be run so recklessly that they harm the economy as well as themselves, they should be broken up, Angelides said in a talk at the Center for National Policy, an independent Washington D.C. think tank. (more…)

By Ted Knutson, Complinet

As Democratic U.S. Senator Christopher Dodd prepares to leave office, Republicans are threatening to chip away at what may be his biggest legislative accomplishment: the Wall Street regulation overhaul he helped steer through Congress this year as chairman of the Senate Banking Committee. It was the biggest fix to the financial regulatory system in 70 years, and Republicans emboldened by November election gains are looking to deny regulators the extra money they want to enforce it, and to delay seating a head of the Consumer Financial Protection Bureau (CFPB).

Dodd said in an interview with ThomsonReuters unit Complinet that the damage to a “real darn good bill” could be real, but not complete. In his half-hour interview last Friday, Dodd looked ahead to the future of the Dodd-Frank Wall Street Reform and Consumer Protection Act and back at the two-year process that led to its creation.

Complinet: How much would it damage regulatory reform if Republicans block budget increases for the Securities and Exchange Commission and the Commodity Futures Trading Commission that say they need to implement it? (more…)

By Kevin Drawbaugh

WASHINGTON, Oct 28 (Reuters) – If Republicans make big gains in U.S. Congressional elections on Tuesday, as expected, Wall Street and big banks will have sweet, but incomplete, revenge on Democrats who drove through sweeping financial reforms against industry opposition.

The likeliest outcome of Democrats losing control of one or both chambers of Congress will be divided government and two years of legislative gridlock on issues important to the financial services sector, said policy analysts and aides.

That means the sector’s regulatory headaches — near migraine level following the enactment in July of the Dodd-Frank Wall Street Reform and Consumer Protection Act — won’t get worse, but probably won’t get much better, either.

By Dave Clarke

WASHINGTON, Aug 19 (Reuters) – The government’s $700 billion bailout of the financial system may still be politically toxic, but for those who voted for the program, there is some good news: the taxpayer bill continues to drop.

On Thursday, congressional scorekeepers projected the overall deficit impact of the Troubled Asset Relief Program — or TARP — will be about $66 billion.

(more…)

By Kevin Drawbaugh

WASHINGTON, July 1 (Reuters) – The sweeping Wall Street reform bill moving through the U.S. Congress calls for no fewer than 39 studies — an impressive level of trying to look busy while dodging controversy, even by Washington standards.

In what amounts to a full employment act for policy analysts, the 2,300-page bill seeks further inquiry on topics ranging from “ending the conservatorship of Fannie Mae  (and) Freddie Mac  to “oversight of carbon markets.”

(more…)

By Matthew Goldstein

NEW YORK, June 28 (Reuters) – One of the sleeper provisions in the 2,000-page financial regulatory reform bill may be one that is no more than six paragraphs long.

The brief section of the massive bill is aimed at stamping out some of the conflicts of interest that arise from Wall Street’s packaging and marketing of asset-backed securities — investment products backed by a pool of mortgages, loans or bonds.

The measure could give U.S. securities regulators the authority to ban a narrow class of so-called securitized products that enable Wall Street banks to take the opposite side of trade from a client, lawyers and other structured finance experts said.

By Steve Eder

NEW YORK, June 25 (Reuters) – U.S. lawmakers have hammered out a law that is designed to fundamentally change Wall Street, but financial professionals largely yawned.

Legislators took steps that at first blush could change the industry, including limiting banks’ swaps-dealing operations and their investments in private equity and hedge funds.

But in the end, banks like Goldman Sachs Group Inc, JPMorgan Chase & Co and Morgan Stanley won concessions that watered down the proposals that could have been most damaging to their profits, staving off a watershed overhaul like the one that took place after the Great Depression.

By Svea Herbst-Bayliss and Matthew Goldstein

BOSTON/NEW YORK, June 25 (Reuters) – It appears Wall Street investment banks can stay in the highly-profitable hedge fund business after all.

An overhaul of financial regulations hammered-out by U.S. lawmakers after weeks of negotiation would permit Wall Street banks to continue to manage and sponsor hedge funds along with private equity funds, according to lawyers and Wall Street officials familiar with the massive bill.

For months Wall Street bankers and hedge fund managers have worried that the legislation, which could be signed into law by President Obama within two weeks, would prohibit investment banks from running hedge funds and possibly force them to sell these often very profitable businesses.

WASHINGTON, June 25 (Reuters) – U.S. lawmakers are close to finalizing legislation that will overhaul the country’s financial system and usher in new rules for Wall Street.

A joint House of Representatives and Senate committee approved a bank regulation bill that lawmakers expect to pass each chamber separately in the coming days. It will then be ready for U.S. President Barack Obama to sign into law, possibly by July 4.

Below are some of the likely winners and losers under the regulation bill.

CREDIT RATING AGENCIES – WIN AND LOSE

* Credit rating agencies — such as Moody’s Corp, Standard & Poor’s and Fitch Ratings — will be subject to greater liability.

By Pedro Nicolaci da Costa

WASHINGTON, June 25 (Reuters) – As officials at the Federal Reserve may soon discover, more isn’t always better.

On the face it, the results of the landmark regulatory reform bill finalized on Friday should have policymakers at the U.S. central bank running victory laps around Congress.

Despite self-professed regulatory shortcomings in the run-up to the worst financial crisis in modern history, the Fed has emerged from legislative reform efforts with its powers greatly enhanced.