EU securitisation tweaks miss the point 10 Oct 2014 The European Commission has outlined rules for high-quality securitisation. That should revive the market for the sort of debt the ECB wants to buy. But focusing on the least risky kind of deals will still make it hard for banks to free up capital – and get lending.
Twitter free-speech chirps carry overtone of risk 9 Oct 2014 After its UK super-injunction tiff, the microblog is fighting to reveal secret U.S. demands for data. The two cases show that firms have power to resist being muzzled – or forced to speak. That’s a check on judicial and government overreach, but it could undermine regulation.
It’s high time for a U.S. financial czar 9 Oct 2014 The Justice League of regulators created under the Wall Street reform act has been meeting regularly to monitor systemic risks. The Financial Stability Oversight Council could be doing a whole lot more, though. That will require an authoritative leader to knock heads together.
Tie banker accountability to responsibility 9 Oct 2014 Proposed UK rules to put reckless bankers behind bars are being blamed for boardroom departures. The threat of jail may make executive directors behave more carefully. But it could also shrink the pool of available non-executives. Regulation should recognise that.
On Wall Street, "everyone lies" is not a defense 7 Oct 2014 Ex-Jefferies trader Jesse Litvak’s claim that his fibs didn’t matter to savvy customers has an appeals court rethinking his conviction. Prison is harsh, but misdeeds shouldn’t be excused just because they’re common. An industry comfortable with half-truths deserves a legal jolt.
U.S. courts turn tail too often in foreign fights 6 Oct 2014 Motorola Mobility has been blocked from avenging price fixing abroad. It’s another case of judges limiting American law in cross-border spats. That’s sensible when U.S. interests are slight – or prosecutors overzealous. But foreign offenses causing harm at home deserve redress.
Chanos may inspire hedgies to go long silence 29 Sep 2014 The short-seller renowned for spotting Enron early is being sued for slander by casino mogul Steve Wynn. The line between betting against, or for, a company and besmirching or advocating too much is a fine one. Investments can and should sometimes speak for themselves.
AIG owners’ bailout suit has law and gall on side 29 Sep 2014 Claims Uncle Sam cheated the insurer’s ex-CEO and others while also saving them may actually succeed at trial. Extracting terms like an 80 pct equity stake in exchange for rescuing AIG was legally questionable. Proving damages will be tricky, but never underestimate chutzpah.
Wall Street police discover how hard reform can be 26 Sep 2014 The financial crisis has forced financiers to change the way they do business. Bad cultures and behaviors are hard to root out, though. Witness JPMorgan’s whale of a loss. A whistleblower has revealed similar troubles at the New York Fed. Regulators also have toughening up to do.
Wall Street needs sheriff more than toll collector 25 Sep 2014 U.S. Attorney General Eric Holder is stepping down after squeezing multibillion-dollar penalties from banks. He had less success securing convictions, leaving law enforcement just an expensive cost of doing business. Next financial crisis, Uncle Sam should send in a tougher cop.
Uncle Sam gets wires crossed on data privacy 24 Sep 2014 A hacker went to prison for exposing personal information AT&T didn’t protect. Now prosecutors are defending the legality of doing essentially the same thing in the Silk Road drug website case. Online privacy laws are flawed when enforcers can’t decide what’s allowed.
U.S. financial regulation really can be fixed 23 Sep 2014 Four years after the landmark Dodd-Frank proposal went into effect, Congress is finally poised to correct mistakes in it. A wide bipartisan margin in the House approved some reasonable changes. It only goes to show consensus is indeed possible and the law needn’t be dismantled.
U.S. inversion strike boosts case for real reform 23 Sep 2014 The Treasury is tightening rules to deter U.S. companies from merging with foreign firms to reduce taxes. The changes may have some effect around the edges. For the most part, though, they just lay bare lawmakers’ failure to make broader changes to America’s burdensome regime.
SEC mistakes minor fraudsters for squeegee men 18 Sep 2014 The U.S. watchdog is nailing petty offenders just as cops used to nab pesky windshield-cleaners. The idea is to nip wrongdoing in the bud. But complex securities enforcement isn’t like neighborhood crime prevention. The tactic may boost SEC statistics more than it deters fraud.
Eike Batista could toughen up Brazil 15 Sep 2014 Prosecutors have accused the fallen energy tycoon of insider trading and are trying to freeze his assets. A conviction would be a first. The case could just as easily expose the country’s legal shortcomings. That presents an opportunity to make good use of the Batista fiasco.
Fed gives U.S. bank investors $50 bln kick in gut 9 Sep 2014 That’s the amount of future dividends and buybacks that may vanish under Wall Street nemesis Daniel Tarullo’s surcharge plan. Their absence will dash hopes for higher returns, and the proposal’s link to short-term funding could boost borrowing costs. But it’s not all bad news.
Google finally learns from healthcare hiccups 4 Sep 2014 Costly run-ins with U.S. regulators have taught the internet giant that drugs and biotech can be more complicated than search. Now it’s partnering with pharma firms and others that know the legal terrain. That allows Google to disrupt while avoiding bureaucratic minefields.
Emerging market watchdogs could dent car industry 29 Aug 2014 Rapid growth gives local regulators in developing markets extra influence. India has fined car companies $421 million and opened the market for spare parts wider than in the West. If Chinese regulators decide to take the same approach, carmakers’ earnings will suffer.
Washington misses trick with rating agency reform 28 Aug 2014 The SEC has finally approved new rules for judging the riskiness of asset-backed bonds. Some are modestly helpful. But measures like imposing unsolicited ratings on deals would offer more robust changes – and may foster much-needed competition for Fitch, Moody’s and S&P.
BofA rent-a-watchdog no substitute for real thing 26 Aug 2014 Like Citi and JPMorgan, the bank will pay a monitor to police its $16.7 bln deal with Uncle Sam. Such private overseers may ensure compliance. But as PwC has shown, their allegiances are open to question. Regulators would better serve the public doing the job themselves.