US consumer watchdog will have stretchable leash 1 Jul 2009 Obama s proposed Consumer Finance Protection Agency won t have the broad, unchecked power that bankers feared. But it could still make their lives difficult, especially if the president appoints antiWall Street militants to the board. That s a significant risk.
Ditching debt guarantees leaves many banks in a hole 30 Jun 2009 The likes of JPMorgan and Morgan Stanley have sworn off the FDIC programme that probably kept a number of banks afloat and may have saved the sector as much as $36bn in financing costs. But unguaranteed debt is still too expensive for most to fund their businesses profitably.
AIG shares rise 20-fold, but directors matter more 30 Jun 2009 The giant US governmentsupported insurer will again have stock trading in the $20s but only because of a reverse stock split. More importantly, a fresh slate of directors brings a range of potentially useful skills. With luck, they can help recoup taxpayers sunken treasure.
Can financial products be regulated like drugs? 29 Jun 2009 The Bank for International Settlements says they could be overseen the same way, with safe ones widely available, risky ones doled out carefully and new ones subject to rigorous tests. The trouble is, safety can be hard to judge. BIS must also press for better disclosure.
US sprinkles new acronyms on regulatory landscape 17 Jun 2009 President Obama wants to make financial products easier for most people to understand. Too bad he isn t doing the same for financial oversight. His reform plan expands the already mindnumbingly complex crazy quilt of US regulatory agencies.
US plan for securitisation risk misses the point 16 Jun 2009 The market could benefit from some changes. But forcing lenders to keep 5% of what they securitise is a red herring. Subprime lenders, as well as plenty of banks that have failed, did have skin in the game. But that didn t keep them from taking outsized risks.
No bombshells in US pay guidelines 10 Jun 2009 The rules from Treasury boss Geithner are refreshingly sensible, even dull: no pay caps or other Draconian measures. The key innovation ensuring compensation committee directors are independent is welcome. But it s down to a slightly tarnished regulator, the SEC, to enforce.
US taxpayer makes decent return on Tarp – so far 9 Jun 2009 The bailout was meant to restore faith in banks. Yet the state has made a profit on the first $68bn being returned by banks. But those are the portfolio s winners. Net off the losses from the likes of AIG and Citi and the government will struggle to stay in the black overall.
US oversight of two-time bailees’ pay is sideshow 8 Jun 2009 The government effectively runs doubledipping Tarp losers like AIG and Citi anyway. The rules and regulatory powers governing financial pay in general are of greater importance. That means avoiding micromanagement and setting clear, enforceable guidelines on pay structure.
Geithner still has too many balls in the air 8 Jun 2009 The US Treasury boss has backpedalled on some plans to make massive structural changes to financial oversight. But extensive, nettlesome issues remain. Obama s team should be trying to rein in expectations and set politically tenable goals before unveiling proposals next week.
Right principle, wrong principal 19 May 2009 US banks still need lots of capital and private equity has money to put to work. Private equity shops are bidding for a Florida bank and one firm is buying a Michigan bank. But US regulators still don t love these matches, Robert Cyran and Richard Beales explain.
US investors don’t need a Shareholder Rights Act 18 May 2009 Many elements of the bill being introduced in the US Senate are laudable: say on pay, an end to staggered boards and separation of the CEO and chairman roles. But shareholders are already tackling these matters themselves. A blunt act of Congress is the wrong way to proceed.
Google/Apple antitrust probe is warning shot 5 May 2009 The US is investigating whether it s anticompetitive for the two technology leaders to share board members. It s easy enough to end the overlap. But that probably wouldn t be the end of it for Google. The new administration looks ready to take a tougher line on competition.
US insider trading case could weaken CDS critics 5 May 2009 Regulators charged two people with fraudulently reaping $1.2m in the credit default swap market. It s the first US insider trading case involving these instruments, and if prosecuted successfully, it would demonstrate that the CDS market isn t entirely lawless.
Inefficient financial regulation has its charms 22 Apr 2009 That s the position of US state insurance watchdogs, who oppose the federal government s attempt to gain oversight of the industry. The feds say the state system is outdated and hampers innovation. Experience suggests that s not entirely bad, argues Dwight Cass.
Blackstone IRR shyness could unnerve shareholders 30 Mar 2009 The buyout firm has told the SEC it won t disclose returns on its funds. It does show the current value of investments. But providing more can t hurt. Fund investors know the returns already. Without the data, investors in the company's stock might expect the worst.
US resolution scheme can’t handle global giants 27 Mar 2009 Geithner wants the power to wind down financial institutions such as AIG and Lehman in an orderly fashion. But some institutions are so multinational that a USonly scheme won t work. If this idea is to be a runner, global collaboration will be needed, says Hugo Dixon.
Geithner’s two-tier regulatory plan looks smart 26 Mar 2009 The US Treasury secretary wants to identify banks, insurers and others that are too big to fail and make them hold more capital. There are big technical problems, but the mere threat of capital charges could help by encouraging many firms to become small enough to fail.
US super-liquidator for non-banks faces challenges 24 Mar 2009 The bosses of the US Treasury and Federal Reserve want a mechanism to shut down troubled nonbanks. A FDIClike institution sounds like a great idea. But nonbank covers a lot of territory. Different liquidation mechanisms may be needed for different institutions.
Done deals could be undone by US regulators 13 Mar 2009 With fewer acquisitions to investigate, US antitrust watchdogs have time on their hands. They also have the backing of a more interventionist administration. Don t be surprised to see some revisiting of mergers like CVSCaremark or WhirlpoolMaytag.