Wednesday, May 5, 2010

Financial regulatory reform; Bailout tax change; lawmakers target investment banks


· Financial regulatory reform – this hit late in trading on Tues – the Lincoln derivs plan that would force large banks to spin out their swaps desks will prob. be dropped from final legislation according to Sen Corker.  "One way or another it will go away," Republican Senator Bob Corker told reporters on Tuesday in a Capitol hallway.  "I know Treasury doesn't support it. I know the FDIC doesn't support it. I don't think the Obama administration wants to support it,"  Reuters 

· Financial regulatory reform – Dodd and Shelby reach deal to eliminate gov’t bank bailouts.  The deal would eliminate a proposed industry-paid $50 billion fund to cover the government’s costs of liquidating a failing financial firm.  Bloomberg 

· Bailout tax change – the White House is backing away from its prior plan of applying a 0.15% tax on all non-deposit funded liabilities on a bank’s balance sheet.  On Tues, Geithner outlined a tax that would apply to assets on a firm's balance sheet, with riskier investments having higher taxes.  WSJ   

· Bailout tax – Dems are reluctant to include the bank tax in the Dodd overhaul bill; instead, Sen Baucus may include the measure in a separate bill that will deal w/extending some existing tax cuts.  Washington Post

· “lawmakers target investment banks” – there are a few initiatives being pursued in Washington that could fundamentally alter the legal relationship between a broker and its customers – one broad effort would impose a fiduciary duty on bankers to watch out for their clients’ best interests.  WSJ   

· Wall St balance sheet “window dressing” to be target of the Financial Crisis Inquiry Commission; industry practices could be thrust into the spotlight on Wed – NYT

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