Wednesday, April 21, 2010

Financial Regulatory Reform Headlines $GS $JPM $XLF

·         Senate has delayed debate on financial regulatory reform until next week (it was expected to kick-off on this Thurs).  Reuters

·         Dems and Reps said to come closer to pact on financial regulatory reform; Dodd says the two parties have reached agreement on 80-90% of the bill.  Sen Republican Leader McConnell says "we are all optimistic that this cane be fixed".  Sen Shelby, who is the minority leader on Dodd's banking committee, sounds optimistic on the ability of companies to achieve a bipartisan compromise    Reuters/WSJ 

·         Senate Agriculture Committee's bill on derivatives reform will be debated on Wed (this is Sen Blanche Lincoln's bill); Lincoln's aim is to have her bill tucked into Dodd's broader legislation.  However, some aspects of the Lincoln legislation go beyond what Dodd would like to see become law.  DJ 

·         SEC eyeing new repo rules - SEC tells House Lehman hearing that it is considering new rules that would cut down on financial firms managing their overall debt levels into Q-end; the SEC is considering requiring stricter disclosures and a clearer rationale from companies for any Q-end adjustments.  The SEC could make all companies subject to these new rules.  WSJ     

·         FASB could launch own inquiry into repo actions on back of the SEC review; FASB Chairman Robert Herz said the board would "work closely" with the U.S. Securities and Exchange Commission to decide whether any rule changes are necessary (Reuters)

·         Goldman – Rep Darrell Issa says the timing of the SEC's charges against Goldman on Fri raise "serious questions" according to a letter he sent to SEC head Schapiro.  Issa says the charges raise concerns about the SEC's independence and impartiality.  WSJ/DJ 

·         Making banks smaller – a minority in Washington would like to see Congress pursue legislation that would force large banks to trim down.  Treasury and Fed officials have rejected such calls.  NYT      

·         The IMF/World Bank Spring meeting is being held later this week in Washington and the IMF rolled out its proposal for country's to tax their banks.  The IMF thinks bank balance sheets should be subject to a levy, while additional taxes on profits and compensation should also be considered.  This has been talked about in the press for weeks and its not clear that global regulators are any closer to reaching a consensus on how to implement a plan.  FT    

·         London Telegraph discusses the IMF bank tax proposal – "banks should be slapped w/two unprecedented taxes in order to compensate taxpayers"   if implemented, the Telegraph says the IMF's proposals could have a sig. impact on bank profitability.  London Telegraph   

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