Tales from the Trail

Washington Extra – Summit day

Our Washington bureau interviewed regulators and lawmakers at a Reuters finance summit today.

FINANCE-SUMMIT/WOLINDeputy Treasury Secretary Neal Wolin told us he did not see any national security concerns with Deutsche Boerse’s planned takeover of NYSE Euronext.

FDIC Chairman Sheila Bair said America’s big international banks should restructure their operations unless they can prove that they can easily be broken up if they start toppling during a financial crisis.

Republican Representative Scott Garrett, who chairs the House panel overseeing mortgage finance giants Fannie Mae and Freddie Mac, said the House of Representatives will likely approve legislation revamping the way Americans finance their homes by year’s end.

House Financial Services Committee Vice Chairman Jeb Hensarling plans to introduce in weeks or months legislation that would wind down mortgage giants Fannie Mae and Freddie Mac within five years.

from Summit Notebook:

Lady Gaga may not be the only one singing a new tune in November

USA/
The 2010 Reuters Washington Summit included 4 days of on-the-record interviews with policymakers, congressmen and Obama Administration officials here in the DC bureau. The interviews covered a wide range of topics…from the impact of the mid-term elections to the importance of the Lady Gaga vote.

With less than six weeks to go before the mid-term elections the focus was on what a potential shift in power to a Republican-controlled Congress could mean for policy priorities in the coming year. We heard from Senators’ McCain, Dodd, Gregg and Bingaman. On the House side we spoke with the man responsible for getting Democrats elected…Rep. Chris Van Hollen, Chairman of the Democratic Congressional Campaign Committee. He called this election season a “tough and challenging environment,’ but predicted Democrats would retain control of the House.

From the Obama Administration, White House Press Secretary Robert Gibbs opened his comments by admitting that early on the administration did not have a “real understanding of the depth of what we were in.” News of Larry Summers’ departure as White House advisor came on the eve of our interview with a man who has worked with Summers, Austan Goolsbee, Chairman of the White House Council of Economic Advisors. Goolsbee said he expected that Mr. Summers’ replacement wouldn’t be part of “a dramatic change in direction.” On the economy, Goolsbee noted that he does not see a double dip on the horizon and that “pulling back on current spending programs could spook the markets.”

from Summit Notebook:

FDIC Chair Bair: think before you point that finger…

The latest blame game circulating in Washington on financial regulation may end up with those who point fingers  finding that they have three fingers pointing back.

During the debate on tightening financial regulations, there have been some backhanded jabs at regulators with the implication that perhaps they were asleep at the wheel. Just this morning on NBC's "Today" show, Democratic Senator Claire McCaskill said Wall Street had been creating things just to bet on -- "they were like the casino, but they had less regulation than Las Vegas."

Well hold on. Who's fault is that?

USA/We asked Sheila Bair, chairman of the Federal Deposit Insurance Corp.

She said when it comes to regulating many of the complex over-the-counter derivatives, the blame actually fell into the lap of Congress which decided against putting them under the oversight of the SEC or CFTC or insurance regulators. And in fairness to Congress, the Federal Reserve and Treasury condoned that action, she said.

from Summit Notebook:

Reuters set to spotlight financial regulation in DC

FINANCIAL-REGULATION/OBAMA
The fight over new rules that will dramatically change Wall Street and financial markets is approaching the finish line in Washington, with both lawmakers and the financial industry making last-ditch efforts to put their stamp on the reform effort. Reuters will be hearing from the key players in the debate on April 26-29 during the 2010 Reuters Global Financial Regulation Summit.

Top regulators, watchdogs, lawmakers and stakeholders will provide their perspectives on how this landmark legislation will impact banks, investors, traders and consumers. The talks will focus in on proposals for a strong new consumer agency, strict oversight of derivatives and attempts to end the perception that some financial firms are “too big to fail.”