Summit Notebook

Exclusive outtakes from industry leaders

Any questions for the MTA?

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With New York subway riders and motorists bracing for the second round of fare and toll hikes this year, we imagine some of you may have questions for Lee Sander. The chief executive of the Metropolitan Transportation Authority, the nation’s biggest public transit system, speaks at the Reuters Infrastructure Summit early Thursday. Post your questions for Sander below. Our MTA-commuting reporters will add a selection of them to their own long list and publish the answers on this blog.

AUDIO – Everything has a cost

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There’s no such thing as a free lunch.

Or bridge. Or turnpike.

Every project we’re talking about at Reuters first-ever Reuters Infrastructure Summit has an enormous cost — sometimes in the hundreds of billions of dollars. And governments are looking for ways to pay for it all.

Enter public-private partnerships (or P3s as we cool, infrastructure types like to say these days). In these deals, governments will lease or sell an asset to a group of investors for a certain big up-front fee and then they will pay the government a certain per-year fee for the right.

from LEGACY Reuters Summits:

Troubled Freddie Mac exec was “straight arrow”

James Lockhart, head of the Federal Housing Finance Agency

James Lockhart, head of the Federal Housing Finance Agency

The chief financial officer at Freddie Mac who died in an apparent suicide was a capable executive who had no involvement in any improper accounting, according to Freddie Mac's federal regulator.

"David (Kellermann) was a very conscientious and hard-working person and took, unfortunately, too much onto himself," James Lockhart, the director of the Federal Housing Finance Agency, told the Reuters Global Financial Regulation Summit in Washington.

from LEGACY Reuters Summits:

Credit card stories? She’s heard ‘em all

Democratic lawmaker Carolyn Maloney

Democratic lawmaker Carolyn MaloneyListen to Rep. Carolyn Maloney tell how she became interested in credit card reform legislation

Tired of your mailbox being jammed with unsolicited credit card offers boasting too-good-to-be-true introductory rates and confusing terms in tiny print?

SEC’s Schapiro says journalist job cuts worrying

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Mary Schapiro, America’s new top cop for the securities industry, said the current mass culling of journalists’ jobs is a concern because it could reduce the number of leads that regulators get as they seek to crack down on nefarious behavior.

“It’s an absolute worry for me because I think financial journalists have in many cases been the sources of some really important enforcement cases and really important discovery of practices and products that regulators should be profoundly concerned about,” the chairman of the Securities and Exchange Commission told the Reuters Global Financial Regulation Summit in Washington on Tuesday.

SEC’s Schapiro shows little interest in Cox’s pet projects

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When he was chairman of the Securities and Exchange Commission, Christopher Cox got slammed by many for failing to protect investors during the worst financial crisis since the Great Depression, including missing Bernie Madoff’s massive Ponzi scheme. Now, to add insult to injury, his successor is showing little interest in his pet projects concerning corporate disclosure and accounting standards, and questioning whether at least one of them is even appropriate.

Cox’s interest in forcing listed companies to file financial reports using technology that makes it easier for investors to read and analyze the data became almost an obsession during his time at the SEC from August 2005 until this past January. Indeed, the SEC voted through a rule to require 500 of the largest public companies to begin filing their reports with the technology known as XBRL, or extensible business reporting language, by the middle of this year, with the rest instructed to comply over the following two years.

Bankers’ chief says “vilification” of bankers tough to take

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As the president of the American Bankers Association, Edward Yingling has soaked up a lot of criticism of the nation’s bankers in the past year. He has also had to work many hours to fight to ensure that crisis measures by the government don’t cause long-term damage to his members. But the one thing he has had difficulty in coping with is the assault on banking as a profession and links made by politicians and the media between any financial institution that has problems and bankers. He told the Reuters Global Financial Regulation Summit on Tuesday he is angry about the “vilification of the banking industry” given that many bankers had nothing to do with creating the financial crisis. He said the word “bank” appeared in stories in which it didn’t belong. “AIG was not actually a bank,” he said.

Mind you, Yingling remains uncompromising when pushed on how much banks are to blame for the events of the past two years. While acknowledging that some of his members made mistakes, he blames accounting rules that forced banks to value their investments at market levels, even if that didn’t reflect their longer-term value, for much of the damage to the financial system. And, he says, it was liquidity problems and a loss of confidence that caused a bank like Wachovia to be rescued more than the weak quality of the mortgage assets held by Golden West, which it bought in 2006. If anyone is looking for apologies — they won’t get them from this direction.

Barney Frank says “no right answer” to Merrill sale problem

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Barney Frank indicated he isn’t as disturbed as some other lawmakers by revelations about the pressure that was brought to bear on Bank of America CEO Kenneth Lewis to complete the takeover of Merrill Lynch in the face of indications that Merrill’s financial position had deteriorated dramatically. Frank told the Reuters Global Financial Regulation Summit in Washington that “there was no right answer” over whether the government should have intervened to make sure the deal was done.

Last week, senior Republican Senator Richard Shelby joined House Democrats in seeking more details after New York’s attorney general said Lewis had testified he was pressured by former Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke to do the merger, or lose his job. Shelby even brought up the question of possible securities fraud over the controversy.

from Global Investing:

Clear road ahead for depressed Dubai

Dubai's deepening real estate slump has brought unexpected benefits to its time-poor urban residents.

Speaking at the Global Islamic Financing Summit, Dr. Humayon Dar, CEO of Shariah-compliant consultancy BMB Islamic, said Dubai was a much nicer place to live now that the immature infrastructure system was not overwhelmed with construction traffic and armies of property speculators.

from Global Investing:

The best of both worlds?

Combined Shariah and ethical/SRI products could be the way forwards for Islamic finance investing, according to Dr Humayon Dar, CEO at BMB Islamic, the Shariah consultancy at BMG Group.

Speaking at the Reuters Islamic Finance Summit today, Dar highlighted the development of an upcoming F&C fund that will meet both ethical and Shariah investing criteria, and can be sold to both Muslims and non-Muslims. "I see this as the way forward in markets such as Malaysia, where a significant proportion of the population is non-Muslim," he said, adding that once such products have established a track record, it should appeal to a broader audience, and encourage other launches.

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