Regulation

Basel’s Coco plan is step in right direction

2 Sep 2010

The body that sets global banking rules wants all capital instruments to be written down if a lender gets into trouble. The plan will help to reduce moral hazard, though it may increase the cost of credit. There are also some imperfections in Basel's plan.

Barclays faces crucial judgement call on structure

31 Aug 2010

The UK bank's universal structure allows it to tap cheap funding. If new regulations remove this advantage, spinning off Barclays Capital could help reduce its stock market discount. But jumping the gun without knowing the full scale of the crackdown could do more harm than good.

Obama dumping rules part of good cop routine

26 Aug 2010

The White House s tighter dumping rules look like an economic owngoal, robbing shoppers of lower prices while irking China. But Obama is seeking to head off still more damaging moves from Congress. Behind the rhetoric, his policies look slightly more tradefriendly.

U.S. mortgage write-off idea deserves brush-off

5 Aug 2010

The White House may soon direct Fannie Mae and Freddie Mac to erase billions in underwater U.S. mortgage debt at least so goes the whitehot rumor searing Washington and Wall Street. If it happened, politics would be the winner and prudence and credibility the losers.

U.S. death tax anomaly tests billionaire longevity

27 Jul 2010

New York Yankees owner George Steinbrenner recently died. There's no suggestion of foul play. But with U.S. estate tax currently zero reverting to 55 pct in 2011, timing matters financially for a billionaire's heirs. The statistics are worth watching for unlikely blips.

Bernanke to Geithner: extend Bush tax cuts

23 Jul 2010

The Fed chairman doesn t want tax rates to reset higher, even for the rich, because the U.S. economy is still struggling. The White House and the Treasury think differently. Here s how an offtherecord Bernanke might try to talk the Treasury boss around.

U.S. finance bill signed; rapprochement now needed

21 Jul 2010

Although expected, the exclusion of JP Morgan s Dimon and Goldman's Blankfein from the financial reform signing ceremony suggests President Obama isn t yet easing up on Big Finance. That s a pity. While Washington needn't bow to business, repairing relations would benefit all.

Banks’ new watchdog master could give it real bite

20 Jul 2010

The new consumer finance regulator will have vast power to create rules that could crimp banks profits. And one of the top candidates to lead it is gadfly academic Elizabeth Warren. Wall Street s financial innovators will need to redouble efforts on the retail side.

Goldman needs to show business as usual

19 Jul 2010

That ll convince investors the battle with the SEC did no harm. Usual compensation gawking will be overshadowed by eagle eyes trained on trading and assets under management. If Goldman departs from the norm and reveals a harsher Q2 than rivals, Lloyd Blankfein s burden will grow.

Washington should be pro-market, not pro-business

16 Jul 2010

Despite corporate America's constant kvetching, it's not Washington's job to be probusiness. That smells of crony capitalism and often just means rewarding big campaign contributors. The better measure of any given policy is whether it respects market forces.

Wall Street’s summer may now officially commence

16 Jul 2010

Goldman settled with the SEC; the Senate passed financial reform; even hapless BP may finally have capped its Gulf gusher. Then on Friday morning, bellwether GE reported its first increased profit in ages. Finance types can afford to take a breather and maybe even to party.

Cap marks only end of beginning for BP crisis

15 Jul 2010

It's just the UK oil major's luck that its best news in 86 days was overshadowed by Goldman Sachs. Few will praise BP's speed, but its initial halting of the Gulf oil leak is a big step forward. Restoring credibility and relations with Uncle Sam will, however, take years.

U.S. financial bill finished, but reform continues

15 Jul 2010

The 2,300page law the biggest overhaul in 80 years has finally made it through Congress and is on its way to the White House. But with studies still to be done and regulators loaded with discretion, uncertainty remains about what key new rules really mean.

Goldman beats SEC on points but leaves chink

15 Jul 2010

The Wall Street firm isn't admitting guilt, despite paying a record $550 mln penalty to settle CDO fraud charges. That makes the SEC's original bombast look overdone. But Goldman is conceding its disclosure was inadequate. That's something that could matter across the industry.

New U.S. budget chief is nod to markets

13 Jul 2010

At the very least, Jacob Lew reminds investors of better days. The last time he had the White House job, the budget was in surplus. And as an exCiti executive, he brings realworld experience to Obama s team. But while the fiscal stakes are high, his profile probably won t be.

Help wanted: U.S. über-bank regulator

9 Jul 2010

Washingtonbased institution seeks new leadership after nearbrush with death and irrelevance. Strong executive skills required to manage merger with longtime rival; banking and regulatory experience essential; must love consumers. Lobbyists, academics need not apply.

TARP stays dysfunctional to the end

30 Jun 2010

The granddaddy of bailout funds started as a way to buy bad loans to save lenders, and is finishing as a way to buy votes to save financial reform. In between, the $700 bln program pumped capital into not just banks but also AIG and GM. It s a tale of toxic politics writ large.

Banks should hope U.S. Democrats have Plan B

29 Jun 2010

The passage of U.S. reforms would force hard changes on big banks. But legislative failure suddenly less farfetched than it seemed might be worse. Democrats are racing to find 60 Senate votes. If they fail, the uncertainty, haggling and headlines could drag on into 2011.

U.S. financial reform no longer a done deal

28 Jun 2010

Last Friday's 5 a.m. Capitol Hill compromise was meant to culminate months of hardfought wrangling. But Democrat Robert Byrd's death and Republican Scott Brown's wavering on a bank tax have put the proposal back in jeopardy. Obama has more work to do if he wants a bill to sign.

G20’s regulatory revamp needs a shot in the arm

25 Jun 2010

Countries are increasingly acting alone on issues like tax, proprietary trading and shortselling while coordinated rules are at risk of being delayed. As the G20 gathers in Toronto, Peter Thal Larsen assesses the state of global reform.