“Months before MF Global teetered on the brink, federal regulators were seeking to rein in the types of risky trades that contributed to the firm’s collapse. But they faced opposition from an influential opponent: Jon S. Corzine, the head of the then little-known brokerage firm.” “As a former United States senator and a former governor […]
Derivatives exchanges may be required to establish and enforce new rules to limit risks of high- frequency trading firms, Commodity Futures Trading Commission Chairman Gary Gensler will tell lawmakers today. The CFTC, which oversees derivatives markets, is preparing a set of broad principles for testing and supervision of electronic trading systems, Gensler said in remarks prepared […]
A little before 2 a.m. on Monday, Jon S. Corzine was in MF Global’s offices in Midtown Manhattan, scrambling to cut a deal to save his firm. Haggard from too little sleep, at times pacing the hallways, he at least had a handshake agreement with one suitor for the firm. Then the chief executive was interrupted to […]
Better Markets Chairman Michael Masters appeared on the Nov. 2, 2011, edition of CNBC’s “Closing Bell” and spoke about efforts to rein in excessive speculation in commodity markets. Watch video here
Icap, the largest inter-dealer broker, announced on Tuesday that it is opening a government relations office in Washington as financial reform of the vast over-the-counter derivatives market enters a crucial period. Rules defining how derivatives will trade and be centrally cleared under the Dodd Frank Act are currently being written by the US Commodity Futures Trading […]
U.S. Senator Mike Crapo withdrew a plan to overhaul a Dodd-Frank Act derivatives measure after Democrats assured the Idaho Republican that they would work with him to address concerns about regulatory overreach. Lawmakers including Senator Debbie Stabenow, the Michigan Democrat who leads the Agriculture Committee, “have indicated a willingness to help try and achieve these […]
The Republican presidential contenders have begun to coalesce around a rough consensus on financial issues, which rejects not only the record of the Obama administration, but also some key accomplishments of George W. Bush’s administration. It’s certainly no surprise that the Republican candidates are loudly criticizing the Obama-era Dodd-Frank Act. And perhaps the candidates’ efforts […]
Jon Corzine’s risk appetite helped destroy his firm. It also provided an object lesson for Paul Volcker’s campaign against proprietary trading on Wall Street. Nineteen months after former New Jersey Governor Corzine became chairman and chief executive officer, MF Global Holdings Ltd. yesterday filed for bankruptcy. Corzine’s decision to boost risk-taking, including a $6.3 billion […]
“CITIGROUP is lucky that Muammar el-Qaddafi was killed when he was. The Libyan leader’s death diverted attention from a lethal article involving Citigroup that deserved more attention because it helps to explain why many average Americans have expressed support for the Occupy Wall Street movement. The news was that Citigroup had to pay a $285 […]
President Barack Obama signed the Dodd-Frank financial reform bill into law 15 months ago, saying he was anxious to put new rules of the road in place for Wall Street. But federal agencies have blown about 77 percent of the rule-making deadlines for the massive overhaul, according to a recent progress report by the law […]
“We are slowly — and painfully — being forced to realize that we are no longer the America of our imaginations. Our greatness was not enshrined. Being a world leader is less about destiny than focused determination, and it is there that we have faltered.” “We sold ourselves a pipe dream that everyone could get […]
“On Friday, the law firm of Steven J. Baum threw a Halloween party. The firm, which is located near Buffalo, is what is commonly referred to as a “foreclosure mill” firm, meaning it represents banks and mortgage servicers as they attempt to foreclose on homeowners and evict them from their homes. Steven J. Baum is, […]
Better Markets President and CEO Dennis Kelleher spoke on a panel at the New America Foundation on future of the Federal Reserve and its role in shaping the U.S. economy. Mr. Kelleher outlined the role of the Fed under Dodd-Frank, spelling out new oversight of systemically important firms and the importance of greater public disclosure in the […]
Congressional Democrats are asking regulators whether they explored possible risks connected to Bank of America Corp. (BAC)’s moving of derivatives from Merrill Lynch into its deposit-taking unit after a credit downgrade. Eighteen lawmakers signed onto letters from Representative Brad Miller and Senator Sherrod Brown seeking information about whether agencies consulted on the transfer considered the potential impact […]
“European banks may need to raise as little as €20bn in fresh capital under a plan to shore up the region’s teetering financial system, as they hoard profits and sell off assets rather than tap investors for funds to meet an estimated €106bn shortfall across the region.” “Investors sent bank shares soaring in response to […]
“One of the consequences of clinching a last-minute deal in the early hours, such as Thursday morning’s agreement between Greek bondholders and European governments, is that much of what is needed has not yet been finalised.” “The headline figure of a 50 per cent cut in the face value of Greek bonds has drawn the […]
“The shadow banking system, the host of lightly regulated entities that compete with banks to provide credit, is bigger than it was before the financial crisis, despite growing efforts by regulators to rein it in, a report from the Financial Stability Board shows.” Read the full story here.
“It sounds like a big number: European regulators instructed some of the Continent’s biggest banks to come up with a total of €106 billion ($147.4 billion) in new capital by the middle of next year, part of policy makers’ latest bid to squelch a two-year financial crisis.” “But the amounts that individual banks will need […]
“The 17 governments of the euro area have agreed to rely on Byzantine financial engineering and outside help to beef up the firepower of a rescue fund aimed at comforting investors that the group can fix Greece’s debt woes and handle future crises.” Read the full story here.
“Mortgage finance giants Fannie Mae and Freddie Mac are unlikely to need any more taxpayer money and will soon start paying back their loans, bringing the total cost of the government bailout of the firms to $124 billion by the end of 2014, according to federal officials.” “To date, the companies, which play a central […]
“A federal judge is trying to determine whether the Securities and Exchange Commission is letting Citigroup off the hook too easily for allegedly misleading investors about a $1 billion investment it sold in 2007 tied to the collapsing housing market.” Read the full story here.
“The main self-policing organization for brokers and stock markets misled the government by altering documents sought by federal regulators, the Securities and Exchange Commission charged Thursday.” “FINRA, a private organization responsible for overseeing much of the U.S. financial industry, altered minutes of staff meetings before turning them over to SEC inspectors in 2008, the agency […]
“After the financial crisis, Mr Volcker’s own concern was directed at what he saw as unchecked dangers in the banking system. After a long campaign, the Obama administration decided to embrace his proposed ban on banks’ proprietary trading.” “The so-called “Volcker rule”, which seeks to prevent banks trading for their own account and also limits […]
“Large hedge funds and other private-fund advisers will have to file periodic reports with regulators seeking to assess threats to the financial system, according to a new rule approved by the Securities and Exchange Commission on Wednesday. “However, in a concession to the industry, the SEC eased some of the requirements, reducing the number of […]
“Bank of New York Mellon Corp.’s currency-trading practices are under renewed legal fire, as a lawsuit alleges the bank made “bundles of cash” by overcharging customers.” “The civil lawsuit, filed by Massachusetts’ top securities regulator against BNY Mellon Wednesday, is seeking more than $30 million in damages for allegedly overcharging the state’s pension fund on […]
“J.P. Morgan Chase & Co. recently approached U.S. regulators about potentially buying back more of its shares but the giant bank was told it might not get the answer it wanted, according to people familiar with the situation.” “J.P. Morgan decided against submitting a formal application following the Fed’s discouraging feedback. But it isn’t the […]
8″European leaders said they secured a deal to reduce Greece’s debt after they labored overnight and into Thursday morning to find agreement on what they had billed as a blockbuster package to stem the Continent’s debt crisis.” “French President Nicolas Sarkozy said after the marathon negotiating session that the leaders had reached agreement with private […]
“Freddie Mac has taken nearly $52 billion in government aid to stay afloat, though for the past four quarters it has returned more money to the Treasury than it has taken. Fannie has cost taxpayers $89 billion. The firms own or guarantee nearly half of all U.S. home loans outstanding.” Read the full story here.
“The world economy may soon find itself in the hands of a small group of bankers who must make a seemingly technical decision that has huge ramifications.” “As European government leaders reached a deal early Thursday on a plan for containing the debt crisis in Greece and other nations, they looked for the owners of […]
“European leaders reached a deal with Greek debtholders on Thursday morning that would see private investors take a 50 per cent cut in the face value of their bonds, a deep haircut that officials believe will reduce Greek debt levels to 120 per cent of gross domestic product by the end of the decade.” Read […]
“Pierre Mariani was desperate to raise cash. The eurozone crisis had made investors shy away from lending to just about any European bank in recent months, but Dexia, the Brussels-based financial group where he was entering his fourth year as chief executive, was finding it even more difficult.” “International lenders that provided Dexia’s day-to-day liquidity […]
“The need to bolster bank capital is perhaps the most settled part of Europe’s proposed antidote to the sovereign debt crisis. But translating this big political decision into practice remains fraught with difficulties.” “Finance ministers last weekend agreed that Europe’s banks must meet a higher, 9 per cent threshold for their core tier one capital […]
“UBS executives said that last month’s $2.3bn unauthorised trading loss would not force the bank to dramatically rein in bonuses, as it set aside nearly 90 per cent of its investment banking revenues for staff pay.” Read the full story here.
“The Federal Reserve rejected MetLife Inc.’s request to raise its dividend for the first time in four years, in the latest clash between giant U.S. financial institutions and their regulators.” “The Fed told the New York-based company that it can’t do any stock repurchases or dividend increases until after the next round of big bank […]
“As the continent’s policy makers continue to grapple with the unfolding crisis that began with debt problems in Greece, investors’ focus has turned to Italy, the euro-zone’s third largest economy, and a nation saddled with one of its heaviest debt burdens. Worries that the government won’t be able to keep up payments on its debt […]
“As regulators draft new rules for hedge funds, private-equity funds and other money managers, some of these companies and their supporters have been laying a foundation that could be used to challenge the requirements in court.” Read the full story here.
It is not too late for bold federal prosecutors to try to bring a few successful cases. A handful of wins could create new precedents and common law that would set a higher and clearer standard for Wall Street, encourage more ethical practices, deter fraud—and arguably prevent future crises. Read the full story here.
“At issue is the overall size of Europe’s banking system and its reliance on the wholesale funding markets. With $55,000bn in assets, the sector is more than four times the size of its US counterpart. As a result, Europe’s banks are primarily funded by the wholesale markets, a much less stable source of financing than […]
“Prices for billions of dollars in mortgage bonds fell to their lowest levels in six months on Monday as traders bet that new measures to help distressed homeowners would lead to a wave of early repayments.” “The price falls highlight the mixed effects of the FHFA action, because for every homeowner who refinances and enjoys […]
“European negotiators have asked Greek debt holders to accept a 60 per cent cut in the face value of their bonds, a hardline stance that far exceeds losses agreed in a deal between private investors and eurozone authorities three months ago.” “The stance, delivered to a consortium of international banks at the weekend by Vittorio […]
“Regulators dragged a “dark pool” trading platform into the light, settling charges that the firm was running a secret affiliate that sought to trade ahead of customers’ orders before filling “a vast majority” of them on the private market.” Read the full story here.
“The risk of recession in the euro zone is mounting, according to a closely watched business survey, signalling that a vicious cycle of fiscal austerity and economic contraction threatens even some of Europe’s biggest economies. “The gloomy outlook comes as political differences among European leaders over how to handle the worsening debt crisis have given […]
“Wall Street regulators expressed mounting concern about SAC Capital Advisors’ trading over a nine-year period, detailing in dozens of confidential reports suspicions that the hedge-fund firm might have profited from insider information.” “The reports, submitted by the regulators to the Securities and Exchange Commission, don’t allege wrongdoing by SAC, one of the world’s best-known hedge-funds, […]
“Reckless Jew that I am, I muscled my way into the Occupy Wall Street encampment in Lower Manhattan despite multiple reports of virulent and conceivably lethal anti-Semitism. Projecting an unvarnished Semitism, I circled the place, encountering nothing and no one to suggest bigotry — not a sign, not a book and not even the guy […]
“To avoid tipping their hand to other investors, institutions such as mutual and pension funds have been shunning traditional stock markets in favor of alternative arenas known as “dark pools,” where they can theoretically mask their moves. The idea is to avoid driving up the price of a stock before the institutions can buy a […]
“What does this have to do with Europe? Well, at this point, Greece, where the crisis began, is no more than a grim sideshow. The clear and present danger comes instead from a sort of bank run on Italy, the euro area’s third-largest economy. Investors, fearing a possible default, are demanding high interest rates on […]
“’Tough quarter, tough outlook.’ That was the view of UBS analysts ahead of European bank earnings this week, as the industry grapples with shrinking revenues, tighter funding conditions, sweeping regulatory changes and the sovereign debt crisis.” “UBS should know – an alleged rogue trading scandal blew a $2.3bn hole in the Swiss group’s books in […]
“When ABN Amro was taken over and broken up by Royal Bank of Scotland, Santander and Fortis back in 2007, it was a wrench for the Netherlands – the country’s biggest bank was to be gutted and a proud brand killed off.” “But it has not turned out that way. The first phase of the […]
“”Banks are striking deals with private equity groups, hedge funds and insurance companies in an effort to preserve their precious regulatory capital.” “A growing number of investors is moving to provide beleaguered lenders with special targeted transactions to help them share their risks – for lucrative fees – through a fast developing class of “regulatory […]
“Try this on your credit card company: your creditworthiness has weakened, so you write down the value of what you owe them to reflect the greater risk that you will not pay it all back and credit the difference to your personal income. That is exactly what accounting allows; the five big US banks – […]
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