Late last year MF Global—the failed investment firm headed by Democratic heavyweight Jon S. Corzine that can't account for as much as $900 million of its clients' money--urged a federal agency to allow futures firms to invest funds from their customer segregated accounts in foreign sovereign debt.
In a December 2010 comment letter to the Commodities Future Trading Commission (CFTC), MF Global, along with another firm, Newedge, argued that the agency’s proposal to disallow such investments “is unnecessary, and will eliminate a liquid, secure, profitable and necessary category of investment....no foreign country that actually defaulted on ...Continue reading
Bank executives plead case to administration officials over Volcker rule
Top executives with major banks met regularly with federal agency officials who were writing a draft rule meant to curtail risky Wall Street trading — known popularly as the Volcker rule, named for the former chairman of the Federal Reserve, Paul Volcker — federal agency meeting records show.
Treasury Secretary Timothy Geithner and CFTC Chairman Gary Gensler were among the agency leaders who met with CEOs from companies including Bank of America, Morgan Stanley and JP Morgan Chase since June 2010. Big banks are strongly critical of a provision in the Dodd-Frank financial law that calls for restricting banks from trading for ...Continue reading
With Fed foreign currency swaps on the rise, mystery remains which foreign banks benefit
Since the end of August, the European Central Bank has been drawing on the foreign currency swap line established by the U.S. Federal Reserve Board, recently securing $1.8 billion to lend to European banks, most of it over a three-month time period. But the ECB does not name which banks or institutions are receiving these dollars. Who gets the money is anybody's guess.
In the response of worsening economic conditions in Europe, in late June the Fed announced that it was extending authority for such swap arrangements with the European Central Bank (ECB) and three other foreign ...Continue reading
Dodd-Frank: How investment banks contributed to the financial crisis
The Dodd-Frank Wall Street Reform and Consumer Protection Act, passed in response to the financial crisis of 2008, added new regulations and new regulators for some—but not all—of the institutions whose actions led to the crisis. Over the next several days, we’ll be taking a look at each of the major groups of contributors to the economic crisis, who the major players were, what political influence they brought to bear on Congress and regulators, how Dodd-Frank intends to regulate them, and, using our new Dodd-Frank Meeting Logs tool, what rules these groups are trying to influence as ...Continue reading
Goldman Sachs, financial firms flood agencies to influence financial law, new Dodd-Frank tracker shows
Investment bank Goldman Sachs, one of the major players in the crisis that led to the economic meltdown of 2008, has had more meetings with government officials about the implementation of the law intended to reform the financial system than any other company or organization, an analysis of nearly a year’s worth of financial agency meeting logs shows.
The Sunlight Foundation Reporting Group has made those logs--published by five separate federal agencies--available in one location in and easy-to-search format, updated to include the most current information on contacts between officials and private interests seeking to influence federal regulators.
Agency ...Continue reading
Dodd-Frank: Will the bill overturn decades of industry influence?
The financial crisis had several authors--federal policies that opened the door to predatory mortgage lending, unregulated financial products, integrated firms that borrowed heavily from one another to invest in the "sure bet" of mortgage-backed securities, and hedge funds and insurers that sought to profit by mitigating risk through complex financial instruments. In the aftermath of the crisis, Congress passed and President Obama signed on July 21, 2010, the Dodd Frank Wall Street Reform and Consumer Protection Act to set new safeguards for the public, to rein in financial firms, to ensure oversight of new types of financial instruments, and to ...Continue reading
Agencies slow to provide new data required by Dodd-Frank
One year after passing Dodd Frank Financial reform, much of the work of reforming America’s financial system still lies ahead. This is not too surprising considering the sheer size of the legislation. The law created 243 rules and requires agencies to produce 67 studies, according to Harvard Law School Forum on Corporate Governance and Financial Regulation. One-hundred-twenty-two deadlines are due between July 16 and July 21.
The law also requires agencies to make new data from disclosures filed by financial firms public, but to do so agencies must overcome obstacles such as lack of funding and limited bureaucratic capacity ...Continue reading
Poised to make decision on regulating foreign swaps, Geithner meets with banks wanting exemption
In February, Treasury Secretary Timothy Geithner met with the CEO and two top-level executives from the London-based bank HSBC to discuss the issue of foreign exchange swaps.
The bank, which has a thriving foreign exchange business, wants Geithner to exempt such swaps from new rules designed to bring transparency to the derivatives market. Under the Dodd-Frank financial law, Geithner was given authority to make this decision, which he is expected to announce any day.
Amounting in the trillions of dollars per day, foreign exchange swaps are used in business to hedge bets on transactions involving different currencies. Typically, two parties ...Continue reading
Top financial regulators meets with industry leaders, lobbyists
Elizabeth Warren, who has been charged with setting up the new Consumer Financial Protection Bureau, reported more meetings with individuals outside the government in December than any other Treasury official working on implementation of the Dodd-Frank financial law.
Warren, who also played an advisory role to the bank bailout oversight committee, reported 15 such meetings with a total of 204 different individuals representing a wide range of interests, from Brian Moynihan, CEO of Bank of America, to representatives of financial trade associations, to those from a long list of consumer groups, such as Consumer Federation of America and the Center ...Continue reading