Fed Faces Biggest Blow to Authority, Independence in Dodd Banking Measure Nov 11, 2009
The Fed should have a particularly important role in supervising institutions that create systemic risk, , president of the San Francisco Fed, told reporters yesterday after a speech in Phoenix. Under the proposal, commercial banks would lose their power to appoint directors of the 12 regional Fed banks. (Bloomberg -- US)
Tarullo Says Dividing Bank Operations May Not Cut Risk to Financial System Nov 10, 2009
The Obama administration wants to boost the Feds ability to set stricter capital and liquidity standards at the biggest firms to curb systemic risk ... Regulators would have to define how size increases systemic risk or perceptions of too-big-to-fail, a condition when investors and counterparties assume that the federal government must backstop a failing firm to save the overall financial system. (Bloomberg -- US)
How Obama Can Bounce Back Nov 10, 2009
Nor will creating a new bureaucratic entity to address "systemic risk" in the financial markets ... If health care reform, pay czars, and systemic risk regulators appear simply to be disconnected dots, the public will not understand that the Obama administration is helping to create a new model of government as market facilitator and market protectora government that makes markets work, rather than a government that coddles certain special market participants. (Slate)
Doubling Down on Defeat Nov 9, 2009
The legislation would give bureaucrats the power to declare that a bank in good financial standing is a future systemic risk. The House is also working on several other financial regulatory bills, including one that would establish a consumer financial protection agency, and will combine them all together into one huge package at a later date. (Human Events Online)
Financial Regulation: Way Easier Than Health-Care Nov 9, 2009
All three reform packages aim to create a systemic risk council that can impose emergency measures and unleash extra powers throughout government in case of a future meltdown like the one that almost destroyed the global economy last fall. Dodd differs with the administration in who should head the council: he wants the president to appoint someone, while the administration thinks it should be an internal player like the Treasury Secretary. (Time.com)
British PM suggests better economic and social contract Nov 8, 2009
Brown told the ongoing G20 Finance Minister and Central Bank Governor Meeting here four principles should be followed "when considering the proposals for an insurance fee to reflect systemic risk or a resolution fund or contingent capital arrangements or a global financial transactions levy.". First, the proposals should be global to reflect the existence of financial institutions as the world's first truly global sector and thereby create a level playing field for its operation, he told the... (Xinhuanet, China)
Transcript: View from the Top with Terry Duffy and Craig Donohue of CME Group Nov 8, 2009
Chrystia Freeland, US managing editor, of CME Group about the draft legislation for regulatory reform and the industrys move to address some of the systemic risk issues of derivatives through central counterparty clearing. This is a transcript of that interview. (FT.com -- Markets)
Lessons from global crisis Nov 7, 2009
I guess it would be that systemic risks can emerge from unlikely sources, and from Ioscos perspective, that we, as a grouping of market regulators, need to consider how we can contribute in mitigating such risks, particularly because the markets are sort of the transmission mechanism for these risks, he told StarBizWeek ... In a June 2009 report, Iosco says systemic risk includes both micro-prudential issues (related to the financial soundness of market intermediaries) and macro-prudential... (The Star Online, Malaysia -- Business)
RBI to audit foreign banks ops before allowing new branches Nov 5, 2009
The move is aimed at ensuring they do not pose any systemic risk to the banking sector, a senior central bank official told ET.. Till this process is completed, foreign banks are unlikely to be allowed to open more branches in the country. (India Times)
Economic Myths and Irrelevancy Nov 4, 2009
Professor Hanke argues that the chief enabler of both the Great Depression and our latest economic downturn is the Federal Reserve Bank, who sees itself as America's systemic risk regulator. This is the world upside down, Hanke explains: The Federal Reserve is the systemic risk. (Townhall.com)
Dollar each way on the future Nov 2, 2009
Currency strategists are divided on whether global growth will continue uninterrupted or if systemic risk still looms in developing economies, particularly eastern Europe. However, emerging market specialists say eastern European economies are no longer at risk of default, but would struggle to keep their currencies pegged to the strong euro. (Sydney Morning Herald -- Business)
Worries as stimulus winds down Nov 2, 2009
"There's still some systemic risk to the environment," said Anthony Conroy, head trader for BNY ConvergEx, an affiliate of the Bank of New York, in New York. "You need growth, you need a healthy financial system to have a healthy economy. There are questions out there about how things go from here. Right now the government is fuelling the system with cash. That can't last forever.". (Sydney Morning Herald -- Business)
EU summit removes hurdle to Lisbon Treaty Oct 31, 2009
As for financial supervision, the leaders called on the EU presidency and the European Parliament to initiate the process on two draft legislative proposals on the establishment of a European Systemic Risk Board for macro-prudential supervision. The meeting urged the member states to reach an agreement by December 2009 on a complete package setting up a new supervisory structure in Europe. (Xinhuanet, China)
Bank bailouts Oct 31, 2009
By the time a truly big bank gets into trouble -- one that poses a "systemic risk" to the entire economy -- it's too late. Other banks, competing like mad for the same talent and profits, will already have adopted many of the excessively-risky banks techniques. (Salon)
Financial regulation overhaul Oct 31, 2009
Systemic risk regulator: Gives the Federal Reserve and a newly created government council more power to act as systemic risk regulators, with far-reaching authority to prevent risky practices across the economy. Committee vote expected as soon as next week. (Boston Globe)
Frank Splits With Obama, Says He Supports Prepayment to Unwind Large Firms Oct 31, 2009
The Frank legislation creates a council of regulators, which includes the Federal Reserve and the FDIC, to monitor large financial firms and the economy for systemic risk. The FDIC would get power to take apart companies whose failure would pose a risk to the economy. (Bloomberg -- US)
NYSE open disrupted by flood of orders Oct 31, 2009
"These are the problems that we talk about when we talk of systemic risk in the system. When everything is plugged in together, you could easily have systemic issues," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, N.J.. Ted Weisberg, trader with Seaport Securities in New York, said the disruption had no impact on the market's decline, which steepened after the interruption was resolved. (USA Today -- Money)
Options In Focus: Genzyme Oct 30, 2009
Treasury Secretary Tim Geithner on Thursday praised legislation aimed at reducing systemic risk and giving the government "resolution authority" to wind down failing financial firms. But critics said it doesn't do enough to protect taxpayers from future bailouts and could encourage firms to bear. (Investors Business Daily)
Regulation feud heats up Oct 30, 2009
"The Oversight Council described in the proposal currently lacks sufficient authority to effectively address systemic risks.". The systemic risk proposal is a key portion of the Obama administration's larger efforts to increase oversight of the financial services industry ... "The Oversight Council described in the proposal currently lacks sufficient authority to effectively address systemic risks.". (New York Post -- Business)
* US administration unveils systemic risk bill Oct 29, 2009
US administration unveils systemic risk bill ... The administration of US President Barack Obama made gains on Tuesday in its push for US financial reform, unveiling a landmark bill to tackle systemic risk in the economy and winning congressional committee approval for a measure to expose hedge funds to more government scrutiny ... The systemic risk bill would grant vast powers to a new systemic risk regulatory council, the Federal Reserve and the Federal Deposit Insurance Corp to monitor and... (Taipei Times, Taiwan -- World)
Nigeria: Economy to Recover Next Year, Says IMF Oct 29, 2009
The apex banks' audits found lax governance had left the banks so weakly capitalised and they posed a systemic risk. The Fund also welcomed the proposed overhaul of the framework for the oil and gas sector, noting its critical importance from a macroeconomic perspective. (allAfrica.com)
Nightmare On Wall Street To Continue Oct 29, 2009
Kucinich also said Congress should think twice before expanding the Fed's powers as the single systemic risk regulator, as many--including the Obama administration--propose. "We better look twice before we consider giving the Federal Reserve any more power," Kucinich said. (CBS News -- Opinion)
SEC search for ways to peer into fast trades Oct 29, 2009
All agreed that naked access poses systemic risk concerns without the proper controls. "One minor mistake in order entry could become a major problem across many different trading venues if trades are allowed to bypass risk management tools," said Peter Driscoll, the chairman of the Security Traders Association. (Yahoo News -- Press Releases)
Abolishing risk destroys wealth Oct 28, 2009
With a systemic risk regulator. In our humble opinion, no, that's the wrong approach, as it paralyzes financial institutions. (Asia Times Online)
Too Big to Fail? We Can Fix ThatHow about goverment 'winding down' troubled companies? Oct 28, 2009
Frank's draft proposal would also create an oversight council to serve as a systemic risk regulator on the lookout for risky firms and activities that pose a threat to the overall system ... Just last week, Federal Reserve governor Dan Tarullo said at a speech at the Exchequer Club in Washington that "the reform process cannot be judged a success unless it substantially reduces systemic risk generally and, in particular, the too big to fail problem.". (ABC News -- Business)
Biggest Banks Would Bear Bulk of Future Bailout Costs Under House Proposal Oct 28, 2009
The House Financial Services Committee measure lays out steps for dealing with the biggest institutions and gives the Federal Reserve power to shrink firms that pose a systemic risk ... Frank said yesterday that the $10 billion threshold will exempt smaller that wouldnt trigger systemic risk, while broadening the cost to an array of money management firms ... The measure gives each major market regulator such as the Fed, FDIC, other bank agencies, the Securities and Exchange Commission and a... (Bloomberg -- US)
Spitzer: The Four Things We Need To Know To Prevent the Next Financial Crisis Oct 28, 2009
This question has enormous implications for how we respond, and it affects which institution should be vested with the so-called "systemic risk" regulator power. The Angelides commission should also demand to see every piece of paper from the Fed, AIG, and all of the counterparties related to the AIG bailout. (Slate)
Financial Regulation Fight Is a "Just War": Geithner Oct 28, 2009
JPMorgan's Dimon earlier on Tuesday reiterated his support for a resolution mechanism and systemic risk regulator that could deal with companies that become "too big to fail.". Consumer protection and financial stability are the two biggest areas targeted for major reforms that will go toward winning back confidence of investors and the American public, Geithner said. (ABC News -- Wire)
Obama Financial Reforms Advance in Congress Oct 28, 2009
WASHINGTON (Reuters) - The Obama administration made gains on Tuesday in its push for U.S. financial reform, unveiling a landmark bill to tackle systemic risk in the economy and winning congressional committee approval for a measure to expose hedge funds to more government scrutiny. The systemic risk bill would grant vast powers to a new systemic risk regulatory council, the Federal Reserve and the Federal Deposit Insurance Corp to monitor and address risks to economic stability posed by shaky... (ABC News -- Wire)
US financial sector will pay for failures: bill Oct 28, 2009
The plan to address systemic risk in the financial sector will wind down failing institutions and end "too big to fail" bailouts that have been borne by taxpayers, the Treasury and the House Financial Services Committee said Tuesday. The proposed Financial Stability Improvement Act "provides for the orderly wind-down of failing firms and ends 'too big to fail' to ensure that industry and shareholders absorb the risks and costs of failure, not taxpayers," they said in a statement. (Yahoo! Asia News)
New bill to curb bailouts Oct 28, 2009
The draft bill calls for creation of a Financial Stability Council to monitor systemic risk in the economy and identify specific problem areas for attention, the source said ... The draft bill calls for creation of a Financial Stability Council to monitor systemic risk in the economy and identify specific problem areas for attention, the source said. (New York Post -- News)
Obama administration slashes executive salaries Oct 23, 2009
Minimising the threat of systemic risk was also a prime goal of the Fed's new compensation guidelines. "The Federal Reserve is working to ensure that compensation packages appropriately tie rewards to longer-term performance and do not create undue risk for the firm or the financial system," said Fed chairman Ben Bernanke. (Channelnewsasia.com)
AIG Exec Defends Bailout in Alma Mater Visit Oct 23, 2009
"The cost of saving the company was less than having systemic risk implode on the world," he said. "The risk to the U.S. and global financial systems from the contagion of an AIG failure was too great for the system to handle.". (ABC News -- Wire)
Merrill's Former European Chairman Bob Wigley Warns Against Bank Breakups Oct 22, 2009
Remuneration should never again be a source of systemic risk, Myners said in a speech in London, according to remarks released by his office. More needs to be done. (Bloomberg -- Europe)
Obama looking at all options for creating jobs Oct 20, 2009
"This deficit is driven by us. I mean, you talk about systemic risk. The systemic risk today is the Congress of the United States," he said. "We're creating these massive debts which we're passing on to our children. We're going to undermine fundamentally the quality of life for our children by doing this.". (Yahoo News -- Press Releases)
Gregg: U.S. Becoming Fiscal 'Banana Republic' Oct 20, 2009
You talk about systemic risk. The systemic risk today is the Congress of the United States, Gregg told CNN. [W]ere creating these massive deficits, which we are passing on to our children. (Newsmax)
Summers Tells Finance Executives to Stop Fighting Tougher Government Rules Oct 19, 2009
That plan includes creating a systemic risk regulator, mandating centralized clearing of derivatives trading, and making it easier for the government to close failing firms. If the CFPA were to fail, it would embolden those whose agenda is to limit the scope of federal regulation, Goldberg said. (Bloomberg -- US)
New Derivatives Rules Lead Financial Reform Oct 17, 2009
Leaders hope to bring one bill to the floor covering OTC derivatives, a financial consumer watchdog agency, bank supervision, systemic risk regulation, hedge fund oversight and new powers for dealing with failing financial firms. Parallel OTC derivatives legislation has been filed in the Senate, but financial reform is moving very slowly there. (Newsmax)
Greenspan worries about U.S. debt, not dollar slide Oct 16, 2009
Under the new plan, the government will make the Fed a systemic risk regulator to oversee large institutions whose failure could threaten the stability of the entire system. The Obama administration has urged many times the U.S. Congress to pass the regulatory reform as soon as possible. (Xinhuanet, China)
Washington Is Nuts Oct 14, 2009
As boom- and bust-prone as high finance always has been and remains, the greatest systemic risk to our economy is not Wall Street. It's the growing federal debt (and weakening dollar) being enacted by those Washington politicians -- the ones who want to protect us from Wall Street. (Townhall.com)
Obama slams big business on credit reforms Oct 10, 2009
AFP - Saturday, October 10. US President Barack Obama speaks on regulatory reform in the East Room at the White House in Washington, DC. US President Barack Obama on Friday accused big business and its lobbyists of trying to kill his bid to pass a new law shielding US consumers from ruinous predatory lending practices. (Yahoo! Asia News)
Wall Street Derivatives Lobby Links With New Democrats to Blunt Obama Plan Oct 10, 2009
New Dems have been focused on increasing transparency, reducing systemic risk, and preserving the ability for end-users to hedge their risk. . (Bloomberg)
Latvia `on the Edge' After Government Mortgage Plan, Cicero's Oates Says Oct 8, 2009
He said the irony is that the IMF and other creditors now feel able to walk away from Latvia because they judge that the contagion effects will no longer carry the systemic risk that was feared last year. The global recovery makes it more likely that assistance to Latvia will not be forthcoming. (Bloomberg -- Europe)
U.S. lawmakers split on investor-related proposals Oct 7, 2009
The draft legislation also proposes creation of a national insurance office, which would collect data on the industry and advise the new systemic risk regulator possibly the on possible threats. Big insurance companies have been lobbying for Congress to free them from a web of state rules by establishing a federal regulator and letting the companies choose which rules to follow. (USA Today -- Money)
Wall Street Overhaul May Not Get Past Congress This Year, FDIC's Bair Says Oct 7, 2009
Bair backs a council of regulators to monitor companies that may pose a systemic risk. Resolution authority is clearly at the top of our list, Bair said. (Bloomberg)
Caterpillar, Duke, Apple Are Winners in Frank Bill to Rein in Derivatives Oct 6, 2009
It would reduce systemic risk while preserving the over- the-counter market for specialized contracts, said Representative , a New York Democrat and member of the group, in a statement on Oct. 2. Franks legislation would give the Commodity Futures Trading Commission added authority to police over-the-counter commodity swaps as well as derivatives traded on foreign exchanges. (Bloomberg -- US)
"Too Big to Fail" Must End for All: FDIC Chief Oct 5, 2009
"I believe that the new regime should apply to all bank holding companies that are more than just shells and their affiliates regardless or not whether they are considered to be systemic risks," she said, adding that including only systemically important firms in the shut-down regime could reinforce the 'too big to fail' doctrine. Financial firms subject to systemic risk shutdown authority should likely also be required to publish "living wills" -- details on how an orderly wind-down would play... (ABC News -- Wire)
Experts discuss financial reform measures with lawmakers Oct 4, 2009
Levitt, for one, argued that the Federal Reserve should not be the "systemic risk regulator" of choice ... "Defending the 'safety and soundness' of financial institutions and managing monetary policy creates inevitable and compromising conflicts of which the kind of vigilant and independent oversight a systemic risk regulator requires.". (Daytona Beach News Journal -- Local)
Goldman Sachs Should Have More Sensitivity About Bonus Impact, Warner Says Oct 3, 2009
Warner said he supports creating a council of regulators to monitor systemic risk that would include the Federal Reserve and the Treasury Department, adding that there is a sense on the committee that setting up a council is the right way to go. The banking panel will consider creating a single bank regulator by merging the oversight powers of the Federal Reserve and the Federal Deposit Insurance Corp., with the Office of the Comptroller of the Currency and the Office of Thrift... (Bloomberg -- US)
Named and shamed Oct 3, 2009
That enabled banks like Citigroup to become, as Ritholtz puts it, "too big to succeed" and pose systemic risk when they went bad. After their government service, Gramm and Rubin took jobs at Swiss bank UBS and Citigroup respectively, leviathans they helped create and eventually beach, costing shareholders and the public billions. (Asia Times Online)
READ: Text of Bernanke's prepared remarks Oct 2, 2009
Chairman Frank, Ranking Member Bachus, and other members of the Committee, I appreciate the opportunity to discuss ways of improving the financial regulatory framework to better protect against systemic risks ... Second, an oversight council made up of the agencies involved in financial supervision and regulation should be established, with a mandate to monitor and identify emerging risks to financial stability across the entire financial system, to identify regulatory gaps, and to coordinate... (USA Today -- Money)
Draghi Drive on Banker Pay Enhances Possible Candidacy to Succeed Trichet Oct 2, 2009
The European Union has proposed setting up a Systemic Risk Board to monitor threats to the financial system, which may be headed by the president of the ECB.. The challenge will be to ensure that the euro-area economy and political structure develops in a cohesive way, said , chief European economist for Barclays Capital in London. (Bloomberg -- Europe)
Bernanke subdued on Fed's consumer protection role Oct 2, 2009
"We have had debate and will have further debate about exactly what the role of the Federal Reserve will be in the systemic risk regulation. "There were some, myself included, who earlier this year thought the Federal Reserve would have a larger role than it looks like it will have," said committee chairman Barney Frank. Bernanke also said if the US economy were to grow at a 3 per cent pace in the coming quarters, it would not be sufficient to quickly drive down the unemployment rate. The... (Sydney Morning Herald -- Business)
Transcript of the Global Financial Stability Report Press Conference with Jose Viñals, Financial Counsellor and Director of the Monetary and Capital Markets Department Oct 2, 2009
Policy actions to inject liquidity into markets, stabilize bank balance sheets, and restore credit market functioning have successfully reduced systemic risk in mature economies ... Turning to emerging markets, conditions have also significantly improved thanks to the reduction in systemic risks in core markets and strong policy measures ... If we fail to meet the challenges still being faced by the financial system in the present crisis and which I have just outlined, we risk re-igniting... (IMF News)
transcript of Press Briefing on the International Monetary Fund's World Economic Outlook by Olivier Blanchard, IMF Economic Counsellor and Director of the Research Department Oct 2, 2009
Responses have supported demand, decreased uncertainty, and decreased systemic risk in financial markets. By doing so, they have led to a turnaround after the large decrease in activity in the last quarter of 2008 and the first quarter of 2009. (IMF News)
World economy healing, but crisis not over: IMF Oct 2, 2009
"After a deep global recession, economic growth has turned positive, as wide-ranging public intervention has supported demand and lowered uncertainty and systemic risk in financial markets," the report said. However, the IMF warned that the data shows that the rebound will be sluggish and "for quite some time" it would be slow to generate jobs. (Yahoo! Asia News)
Bernanke changes tone on systemic risk regulator Oct 2, 2009
Fed chairman Ben Bernanke told a congressional panel that a new council of financial regulators, not just the Federal Reserve, should monitor systemic risk in the economy. Bernanke's comments came amid growing scepticism in Congress and beyond about an administration proposal to give the Fed the lead role in policing the economy for systemic risk, albeit in coordination with an inter-agency council ... "However, the broader task of monitoring and addressing systemic risks that might arise from... (India Times)
Fed's Bernanke endorses council of financial regulators Oct 2, 2009
Bernanke told a congressional panel that a new council of financial regulators, not just the Federal Reserve, should monitor systemic risk in the economy ... Bernanke's comments came amid growing skepticism in Congress and elsewhere about an administration proposal to give the Fed the lead role in policing the economy for systemic risk, albeit in coordination with an inter-agency council ... "However, the broader task of monitoring and addressing systemic risks that might arise from the... (USA Today -- Money)
Stock futures indicate flat to softer start Oct 1, 2009
A broad-based oversight council of financial regulators, not just the Federal Reserve, should be set up to monitor systemic risk to the economy, Fed Chairman Ben Bernanke said in text of remarks to be delivered to Congress on Thursday. ViaSat Inc (VSAT.O), which provides satellite and other wireless networking systems, has agreed to buy Wild Blue Communications Inc for more than 565 million, the Wall Street Journal reported. (Yahoo News -- Press Releases)
Bernanke asks Congress to empower regulators Oct 1, 2009
Search Type Choose a search type from the items below. More on the Federal Reserve. (Yahoo News -- Politics)
IMF raises global growth forecasts, remains cautious Oct 1, 2009
" onclick="Next();" src="/images/butt_next. The main risk is that private demand in advanced economies remains very weak," the IMF economists wrote. "Premature exit from accommodative monetary and fiscal policies is a particular concern because the policy-induced rebound might be mistaken for the beginning of a strong recovery," the 186-nation institution said. A premature exit could stall the recovery, allowing deflationary forces to take root in a pernicious downward spiral of falling prices... (Channelnewsasia.com)
Fed chief: Empower regulators Oct 1, 2009
Lawmakers, who are planning to take up the financial reform bill this fall, say it is likely that they would put a council of regulators in charge of so-called "systemic risk" instead of consolidating that power primarily within the Federal Reserve, as Obama wants. In his testimony, Bernanke voiced support for other aspects of Obama's plan, including. (The Clarion-Ledger)
Full Story » Oct 1, 2009
Bernanke asks Congress to empower regulators - Yahoo. Search Type Choose a search type from the items below. (Yahoo News -- Politics)
Australia joblessness to peak at 7%: IMF Oct 1, 2009
"After a deep global recession, economic growth has turned positive, as wide-ranging public intervention has supported demand and lowered uncertainty and systemic risk in financial markets," it said. However, it said the global recovery was expected to be slow as financial systems remained "impaired", support from governments would gradually have to be withdrawn, and households that suffered from "asset price bursts" would continue to rebuild their savings. (Sydney Morning Herald -- Business)
Day & Krishna: Technology for Tracking TARP Dollars Exists, Is Tested and Is Ready to Go Sep 30, 2009
Such detailed reporting could support TARP and allow data analysts and government specialists to instantly detect possible systemic risk, waste, fraud and abuse in the future using software alert notifications and predictive analytics for preventing potential economic disaster. Currently, information regarding TARP funds has been spread across 25 federal agencies that are using incompatible formats and isolated databases. (Roll Call)
