Regulation

Replacing Bernanke would show Fed is accountable

25 Jan 2010

Bernanke is opposed by hardmoney Republicans and antiWall Street Democrats. If the latter prevail, his replacement might be worse. But his role in the housing bubble and refusal to admit error make it wrong to keep him. Even in government, messing up should be penalized.

Obama loses cool big time over Wall Street

21 Jan 2010

His new clampdown on banks is horribly vague. Worse, it s an aboutface that wrecks the credibility of Obama s team and creates damaging uncertainty. Presented sooner and better, the ideas might have made sense. As it is, they look like a flailing response to political disarray.

Odds for US financial reform improve

20 Jan 2010

The blow inflicted on Democrats in the Massachusetts Senate election has endangered healthcare reform and other parts of the Obama agenda. But reforming financial regulation could be the one major legislative initiative that both parties can get behind in 2010.

FDIC nibbles nicely at bank risk

7 Jan 2010

The U.S. regulator is maintaining a drip of creative ideas to protect the deposit insurance fund. Tying premiums to the risk profile of bank pay practices, participating in stock gains of failedbank buyers and capping the deposit rates risky banks pay are innovations to emulate.

Dodd departure boosts Wall Street in Washington

6 Jan 2010

The likely retirement of the Connecticut senator would hand the Senate Banking Committee over to a friend of the financial industry in 2011. It would also reduce the chances of tough financial regulation reform this year. 2010 is starting well for the masters of the universe.

Obama tightens antitrust screws with Intel suit

16 Dec 2009

Intel s behavior in the chip market has seemed an obvious target for monopoly watchdogs. Yet an antiregulatory bent and the difficulty in remedying tech abuses kept them out of the fray. FTC's Intel suit suggests growing confidence among authorities and more actions to come.

CDS defenders protest too much

30 Nov 2009

Credit swaps are under fire. Now ISDA, the derivatives trade body, is fighting back. It s right to debunk the idea that CDS traders can make an easy killing from a company s death spiral. But CDS do modify creditors behavior. ISDA should be looking for solutions, not objecting.

Federal Reserve can’t have it both ways

30 Nov 2009

The US central bank wants to retain its distance from Congress, particularly on monetary policy while keeping or even expanding its already beefed up responsibilities for bank regulation. It s a tricky balance. There are arguments for both, but reconciling them is a challenge.

Lower overdraft fees aren’t a free gift

20 Nov 2009

U.S. bank regulators and politicians are forcing banks to rein in this big source of profits. Consumers should be pleased but not excited. Financial institutions are likely to find other ways to charge customers or lend less. UK customers will have to live with the status quo.

Is Barney Frank turning into a bull-market banker?

19 Nov 2009

The influential US congressman wants to keep on standby the FDIC s bank debt guarantee programme, saying it made a profit for the federal government . With FDIC still on the hook, that sounds a bit like the book profits now, worry later attitude on Wall Street before the crisis.

Are US regulators now racing to the top?

18 Nov 2009

That's one interpretation of a spike in enforcement actions and ballyhooed initiatives by the likes of the SEC, the OCC and the Fed. With legislation in Congress that could gut their authority, they seem to be trying to outregulate one another.

Threat to independent FASB is danger to investors

17 Nov 2009

A US congressman wants bank regulators in charge of accounting standards. That suits those bankers who blame marktomarket accounting for the 2008 meltdown. But accounting merely exposed mistakes banks had made. Investors need independent standards, not regulatory coverups.

AIG pay standoff entirely predictable

11 Nov 2009

It s what happens if a government props up a private company, makes a show of keeping it running like one, and then interferes. CEO Benmosche s threat to quit may be a bluff. But the lesson is that if there s no clear turnaround plan firms should be wound down, not bailed out.

Oracle-Sun antitrust spat exposes turf sensitivity

10 Nov 2009

The Obama administration s relatively vigorous approach to competition policy is welcome in Brussels. But mutual cooing has turned into squawks now that the European Commission has raised objections over the merger of two US firms. Shared views are one thing, turf is another.

US Senate reform bill forgets lesson of history

10 Nov 2009

Its centrepiece is the creation of a single überregulator for banks. This has its charms. It would avoid giving new power to the Fed and should reduce the risk of regulatory capture. But the experience of Britain s FSA suggests structure alone won t ensure effective regulation.

US Treasury lets Fannie slip deeper into care

9 Nov 2009

It rejected the mortgage zombie s plan to sell nearly $3bn of tax credits it can t use to Goldman. It had its reasons, but with Fannie already calling for another $15bn of aid, any sort of market mechanism that reduces the need for government handouts ought to be embraced.

Market softens up CVS Caremark for US regulators

5 Nov 2009

The Federal Trade Commission fancies the drugs group as an antitrust target. Investors, meanwhile, gave its stock a beating after the company lost contracts worth billions in the latest quarter. The market is helping overworked officials by putting CVS Caremark on the back foot.

Too big to fail label needs more transparency

28 Oct 2009

The US Treasury s draft financial services law provides for a new class of systemically important banks which the Fed regulates more tightly and supports financially. That list should be public, not undisclosed as proposed, and the toobigtofail playing field needs to be level.

UK rightly takes on Ticketmaster/Live Nation deal

8 Oct 2009

The Competition Commission has provisionally ruled combining the dominant ticket agent with one of the largest concert promoters could hurt consumers. This should encourage US regulators which were already sceptical to gut the deal.

Over-regulation of ratings could have happy ending

24 Sep 2009

There must be a point at which credit raters would give up officially sanctioned status to avoid unworkable red tape or financial liability for errors. If that led to governmentfree ratings and ratingsfree laws, Richard Beales says the financial world could be a better place.