Regulation

Ex-Bear boss still blowing same old smoke

5 May 2010

Jimmy Cayne repeated his shortselling conspiracy to the commission scrutinizing the crisis, saying he couldn't have saved the firm. Panel members resisted cheap shots about his outofoffice antics, but Cayne revealed his time off hasn't put him any more in touch with reality.

Reform needs care to avoid financial trichinosis

5 May 2010

The legislation has officially entered the U.S. Senate sausage factory, where lawmakers are trying to stuff the bill with myriad amendments. Most aim for porky local projects or piggishly prey on populist sentiment. Herein are three proposals that could sicken the system.

JPMorgan shows Congress can be an easy target too

4 May 2010

A senior economist at the bank slammed the unnerving ignorance of lawmakers at the Goldman hearings. The view reflects what many on Wall Street say privately, but JPMorgan disavowed it. That probably makes as much political sense as the grandstanding by the senators.

Oil watchdogs slept beside banking brethren

4 May 2010

Regulators are often accused of being in bed with industry even literally in the oil sector. The BP spill fiasco suggests they trusted tiny track records and deferred to Big Oil on the safety of new technology. Bankers aren't the only ones who need more vigilant oversight.

Aussie tax approach risks world resource shortages

3 May 2010

Australia's proposed 40 pct resource super profits tax risks doesn't just legitimize thirdworld profits grabs. By suppressing mining profits peaks, it could reduce goldrush exploration activity when prices are high. That, in turn, might exacerbate resource cycles.

Is Obama losing control of U.S. financial reform?

3 May 2010

Legislators seem to be scrambling to outregulate each other while the White House keeps mum. It defied its liberal base on nationalizing the banks last year and breaking them up. But as controversial amendments, such as those on derivatives, emerge, it may be time to pipe up.

Wall Street’s separation anxiety is misplaced

30 Apr 2010

Big banks don't want to spin off their lucrative derivatives desks, even into subsidiaries. Yet the U.S. Senate plan has merits. It would rid the derivatives market of perceived taxpayer support and discourage risky speculation. But international cooperation is critical.

Politics, not substance, delaying U.S. reforms

28 Apr 2010

If the bill to rejig financial regulation implodes in the Senate, it won t be because of policy divisions. The Republicans have finally offered their proposals. But it all looks much like what the Democrats are pushing. If both sides want a deal, it's there to be had.

Fed maintains course – into possible storm

28 Apr 2010

The FOMC has kept its extended period language for ultralow interest rates, shrugging off soaring commodity prices. But broad money supply has declined of late, as it did in summer 2008. If nothing gives, Fed policy could steer right into a new liquidity problem.

U.S. budget fixes require heavy political lifting

27 Apr 2010

President Obama s deficitreducing commission is now officially at work. A target for taxes and cuts might be some $650 billion a year. A VAT looks likely, but that alone won t do it. Breakingviews suggests a few other ideas. They are all needed but would mostly be unpopular.

It’s put-up time for financial reform critics

27 Apr 2010

Republicans keep demanding a better plan and have blocked U.S. Senate debate on the Democratic overhaul. But the GOP should move beyond political maneuvering and put forward a proposal one that fixes Fannie and Freddie and gives regulators less wiggle room on bank closures.

Goldman emails show rise of technology and traders

27 Apr 2010

The Wall Street bank s use of voicemail, rather than email, helped it dodge earlier scandals. Embarrassing emails released by Senate investigators show how the Blackberry culture may have changed behaviour. But they also underscore the power shift from Goldman bankers to traders.

Derivatives reform needs to look forward, not back

27 Apr 2010

Many companies want to be exempt from new U.S. rules particularly requirements to post hard cash against swaps. Warren Buffett s wish that existing deals should be spared is selfinterested, but makes sense. But there shouldn t be too many free passes in the future.

Goldman performance shows one bubble yet to pop

27 Apr 2010

That s the one Wall Street and those close to it inhabit. Sure, current and former executives who testified in Congress were lawyered up, and the senators did a lot of grandstanding. But it s clear Goldman is still out of touch with the world beyond its immediate orbit.

Markets give Fed TIP on inflation expectations

26 Apr 2010

Soso demand for Monday's batch of U.S. inflationprotected bonds suggests price pressures aren't scaring investors. That gives the Fed cover for keeping interest rates low. One market measure, however, does suggest inflation is expected to rise just further down the road.

Obama gracious in victory over Wall Street

22 Apr 2010

The tone of Thursday s speech was mild compared to his earlier fatcat rhetoric. Bank bosses even turned up after spurning Obama s last visit. With financial reform now seemingly assured of passage, the president only needed to make a strong closing argument and did.

Wall Street has most to fear from new bank taxes

22 Apr 2010

The IMF has proposed two taxes: a levy to pay for future rescues and a charge against profit and pay. Governments have not approved the plan and some details are vague. But using the IMF's own estimates, banks in big countries that pay a lot to staff look set to suffer the most.

New bank taxes mustn’t be used for bailouts

21 Apr 2010

The IMF says its proposed bank taxes could go into government coffers or be siphoned off into separate resolution funds. The former is probably better. What's more important is that the tax does not stop shareholders and bondholders from suffering when banks teeter on the brink.

Goldman woes could bring new limits for U.S. banks

21 Apr 2010

Sure, the furor makes congressional passage of the current financial reform bill more likely. But there could be sequels, too. Calls persist for new taxes and restraints on banks even breakups. And the SEC s charges against Goldman help keep it all on the front burner.

Regulation could make bank FAT tax unnecessary

21 Apr 2010

The IMF has proposed a Financial Activities Tax to target excess bank profits and pay. The tax could rein in bonuses and cut the financial sector down to size. But higher capital ratios and new rules to safely shut down failing banks are a better way to achieve the same result.