Consumer confidence ticks up in October
By Annalyn Censky, CNN Money.com
Americans got slightly more optimistic about the economy in October, but still have an overwhelmingly gloomy outlook, according to the latest reading on consumer morale.
http://jlne.ws/dli9cN
TIPS auction reflects profound uncertainty Mark Hulbert
By Mark Hulbert, MarketWatch
How much should you have to pay for an insurance policy that protects you against both severe deflation and hyperinflation?
http://jlne.ws/d9RUw5
Banks spend $82 million to sell credit cards to students
By Amy Haimerl, CNN Money
The U.S. Marines recruit college students to become one of the few, one of the proud. Bank of America just wants their financial future. The Charlotte, N.C.-based bank spends exponentially more money than any other bank to recruit students for credit cards.
http://jlne.ws/c4ktkF
IMF Managing Director Dominique Strauss-Kahn Names Antonio Borges as Director of the European Department of the Fund
Press Release
Mr. Dominique Strauss-Kahn, Managing Director of the International Monetary Fund (IMF), announced today his intention to name Mr. Antonio Borges to the post of Director of the European Department of the Fund.
http://jlne.ws/96hVFy
Robert Shiller And Foreclosuregate: Playing With Systemic Fire? - Street Sweep: Fortune's Wall Street Blog
CNNMoney.com/Fortune
So say Robert Shiller, the Yale professor who was a leading skeptic of the financial bubbles of the past decade, and New York City Comptroller John Liu. They spoke Tuesday at The Economist magazine's annual Buttonwood conference, where they discussed how to manage systemic risk under the new world of regulatory reform.
http://jlne.ws/9O4Beo
Bernanke Asset Purchases Risk Unleashing 1970s Inflation Genie
By Craig Torres, Bloomberg
For the second time since he became chairman in 2006, Ben S. Bernanke is leading the Federal Reserve into uncharted monetary territory.
http://jlne.ws/caYAmJ
U.S. home prices fall 0.2% in August: Case-Shiller Economic Report
By Greg Robb, MarketWatch
Home prices fell 0.2% in August, according to the Case-Shiller home price index released Tuesday by Standard & Poor’s, in a report labelled “disappointing” by its compilers.
http://jlne.ws/9sloUm
Greece Likely to Default By 2013 as Debts Remain, El-Erian Says
By Susanne Walker, Bloomberg
Greece is likely to default over the next three years because budget-cutting won’t be enough to reduce the nation’s debt burden, Pacific Investment Management Co. Chief Executive Officer Mohamed A. El-Erian said.
http://jlne.ws/9ah6WF
`Black Swan' Author Taleb Says Financial Bonus Pay Should Be `Symmetric'
By Laura Marcinek, Bloomberg
Nassim Nicholas Taleb, author of the "The Black Swan," said bonuses to financial executives and traders should be "symmetric" with their performance to solve the problem of overconfidence in global markets.
http://jlne.ws/bsLqhY
MF Global Sees Barrier To CME's Interest-Rate Swap Clearing
By Jacob Bunge Of DOW JONES NEWSWIRES
Brokerage firm MF Global Holdings (MF) charged Monday that exchange company CME Group Inc. (CME) has set too high a threshold for participating in a new service for interest-rate swaps. MF Global, among the biggest independent futures commission merchants, said that tough capital requirements for firms looking to clear interest-rate swap deals at CME ensure that the $349 trillion market will continue to be dominated by big banks.
http://jlne.ws/bkpluW
Fed Won't Join Banks' Appeal to High Court Over Emergency-Loan Disclosures
Bloomberg
The Federal Reserve won't join a banking industry trade group in asking the U.S. Supreme Court to let the government continue to withhold details of emergency loans made to financial firms in 2008.
http://jlne.ws/9ATM1X
Shrinking Bank Revenue Signals Worst Decade of Growth
By Dawn Kopecki and Michael J. Moore, Bloomberg
Shrinking revenue at U.S. banks, led by Goldman Sachs Group Inc. and Citigroup Inc., may continue to fall as the industry heads into what could be its slowest period of growth since the Great Depression.
http://jlne.ws/90OoAv
Basel Could Make Credit Crunches Worse, Pandit Says
BusinessWeek
Citigroup Inc. Chief Executive Officer Vikram Pandit said many of the goals set by the Basel Committee on Banking Supervision are likely to be ineffective or make existing capital inequalities worse.
http://jlne.ws/cRWYAG
Vince Cable orders bankers back down to Earth on bonuses
Guardian Unlimited
Barclays' Bob Diamond mounts defence of the City as business secretary launches government review Vince Cable today warned bankers against embarking on a "self-indulgent bonus round" as he put soaring executive pay and potentially destructive takeovers at the heart of a new government review into the way the City operates. The business secretary's plea at the CBI conference followed an attempt ...
http://jlne.ws/bYS3rr
ECB revises estimated T2S fees
By Jeremy Grant
FT.com / FT Trading Room / Clearing & Settlement
The European Central Bank has come up with a more precise estimate for how much the planned pan-European settlement system - known as Target2Securities (T2S) - will cost, setting a fee of 15 euro cents per transaction.
http://jlne.ws/dnYnHQ
Geithner's Global Central Planning
The Chinese government's accumulation of U.S. debt represents a tragic investment decision, not a currency-manipulation effort.
By JOHN H. COCHRANE, WSJ.com
Economists are full of bad ideas. Terrible ideas seem to emerge when the gurus get together to talk about coordinating their bad ideas. Last week's public letter from Treasury Secretary Tim Geithner to the G-20 finance ministers is a great example.
http://jlne.ws/a0k6jF
US Treasury: Oversight Council Taking Next Steps On Nonbank Rules
Dow Jones
The new Financial Stability Oversight Council at its second meeting next month will further discuss the criteria for identifing when a financial firm outside the banking system becomes large or complex enough to threaten markets, Deputy Treasury Secretary Neal Wolin said Monday.
http://jlne.ws/dk4kF8
Geithner's Global Central Planning
By JOHN H. COCHRANE, WSJ.com
Economists are full of bad ideas. Terrible ideas seem to emerge when the gurus get together to talk about coordinating their bad ideas. Last week's public letter from Treasury Secretary Tim Geithner to the G-20 finance ministers is a great example.
http://jlne.ws/a0k6j
Iceland Wants Failed Banker Criminal Probes Sped Up
BusinessWeek
Iceland's parliamentary committee in charge of probing the country's financial collapse wants to speed up investigations of former bank executives and ensure criminal acts are prosecuted soon.
http://jlne.ws/bgCw9z
Goldman Launches 50-Year Bond Sale
By KATY BURNE
NEW YORK-Goldman Sachs Group Inc. launched a $1.3 billion sale of 50-year bonds Tuesday, its longest senior bond ever. The sale was targeted at private, also known as retail, investors rather than institutions.
WSJ.com
http://jlne.ws/bNBaHN
UBS reports $1.7 bln net; outflows are halted
Market Watch
UBS reports a $1.7 billion profit and halts the outflow of cash from its private- banking arm, though the group's shares drop as its investment-banking unit disappoints investors.
http://jlne.ws/asdYcO
Deutsche Bank's Biggest Deal in Decade May Hurt Profit
BusinessWeek
Deutsche Bank AG's plan to build a German consumer-banking powerhouse with the $8.9 billion purchase of Deutsche Postbank AG, its biggest takeover in a decade, may end up weighing on profitability.
http://jlne.ws/a2aM0O
BankServ's Corporate SWIFT Service Bureau to Be Offered by Bank of America Merrill Lynch
Marketwire
BankServ and Bank of America Merrill Lynch today announced an agreement to create a Global SWIFT Service Bureau solution for the bank's many Fortune 1000 clients worldwide.
http://jlne.ws/bDqUSK
OTC Derivatives May Face Curbs as FSB Seeks Central Clearing
By Jim Brunsden and Abigail Moses
Regulators should consider limiting trades in some derivatives that aren't centrally cleared in a bid to cut excessive risk, the Financial Stability Board said.
Bloomberg
http://jlne.ws/dl9E7x
Greenspan's Niece Fires Back at Hedge Fund
New York Times
It seems one hedge fund employee recently let go from Kingdon Capital wasn't going gently into that dark night.
http://jlne.ws/cFEo37
Qatar Bourse Expects to Start Bond Trading, Short-Selling in First Quarter
Bloomberg
Qatar Exchange expects to start trading in bonds in the first quarter of next year, Saif Al- Mansoori, deputy chief executive officer, said in Beirut today.
http://jlne.ws/bQQnh9
Barclays named 'Best Bank in Botswana'
Mmegi Online
For the second year running, Barclays Bank of Botswana (BBB) has been named 'Best Bank in Botswana' by emeafinance Magazine.
http://jlne.ws/bTNu0n
Abu Dhabi Islamic Bank Hires HSBC, Barclays, StanChart to Sell Dollar Bond
Bloomberg
Abu Dhabi Islamic Bank PJSC's sale of five-year Islamic bonds in dollars may be priced to yield about 3.625 percent, according to two people with knowledge of the sale.
http://jlne.ws/aJ1Nmb
Selasa, 26 Oktober 2010
Statement by SIFMA President and CEO Tim Ryan in Connection with National Economists Club Speech
Press Release
Release Date: October 26, 2010
Contact: Andrew DeSouza, (202) 962-7390, adesouza@sifma.org
Statement by SIFMA President and CEO Tim Ryan in Connection with National Economists Club Speech
Washington, DC, October 26, 2010—The Securities Industry and Financial Markets Association today released the following statement from President and CEO Tim Ryan in connection with his speech to the National Economists Club:
—The Securities Industry and Financial Markets Association today released the following statement from President and CEO Tim Ryan in connection with his to the National Economists Club:
235 rulemakings, 41 reports, 71 studies authored by eleven different federal agencies, bureaus and the Government Accountability Office.
That’s what, as legislated by the Dodd-Frank Act, needs to be studied and written over the next two-to-five years. And that’s just in the United States.
Parallel rulemaking is taking shape across the globe, initiated by the same financial crisis, and necessitated by the fact that we do business today in a global economy. It will be vital for global rules to be coordinated and to apply equally to the entire industry to avoid market distortions, regulatory arbitrage and competitive advantages among different jurisdictions.
Our focus—everyone’s focus—must be on how we safeguard our financial system without constraining capital formation, credit availability and our industry’s ability to contribute to economic growth and job creation.
With the breadth and depth of SIFMA’s membership—which includes global, national and regional securities firms, banks and asset managers active in financial markets around the world— we can and will be a trusted, credible resource for everyone participating in the regulatory rulemaking process.
This isn’t about simply meeting the rulemaking deadlines, it’s about getting it done right. The stakes are too high for anything less. Poorly crafted regulations that create market distortions or other unintended consequences could constrain capital formation or even increase systemic risk—the exact opposite of the intent of Dodd-Frank.
To be most effective, SIFMA is focusing primarily on seven areas:
· systemic risk, specifically the new Financial Stability Oversight Counsel and its research arm the Office of Financial Research;
· resolution authority and living wills;
· oversight of the over-the-counter derivatives market;
· securitization and the credit rating agencies;
· capital and liquidity standards via Basel and Dodd-Frank;
· the future of proprietary trading and private equity under what’s come to be known as the Volcker Rule; and
· the creation of a federal fiduciary standard for investment advisors and broker/dealers who provide personalized investment advice to retail investors.
With many firms operating in a global financial system, what happens in one jurisdiction does affect firms operating globally. In addition to the work we’ll be doing on Dodd-Frank rulemaking, we’re paying close attention to what is happening globally, focusing primarily on the west by looking at the regulatory efforts of the United Kingdom, the European Union and the Financial Stability Board.
Systemic Risk
To deal with systemic risk in the U.S., Dodd-Frank has created two new entities, the Financial Stability Oversight Council (FSOC), and its research arm, the Office of Financial Research, which will provide analytical support. FSOC will oversee bank holding companies with total consolidated assets of more than $50 billion. The FSOC can also designate non-bank financial institutions as systemically significant by a 2/3 vote of the FSOC’s 10 voting members.
In Europe, the European Commission is looking into what attributes beyond size alone make an institution financially risky, and, much like the FSOC, has established the European Systemic Risk Board, monitoring risk to the 27 EU countries and coordinating the actions of national supervisors. It is comprised of Europe’s Central Bankers, and to coordinate with among others the European Supervisory Authorities.
Resolution Authority
To address the failure of a large, interconnected financial institution the U.S. and UK has already created a new resolution authority, with Europe following. Dodd–Frank has granted the FDIC the explicit authority to unwind failing firms or covered financial companies, and large complex companies are now required to periodically submit living wills to the FDIC and the Federal Reserve.
In addition to the existing resolution authority, the UK is proposing a separate administrator for investment firms. The UK’s recently passed Financial Services Bill also requires firms to submit living wills. In addition, they are investigating the utility of contingent capital or “CoCos” and bail-ins. Questions remain as to what other countries within the EU might consider and how each of these processes will interact.
In the end, the goal is to provide for a process that will wind down failing institutions, end ‘too-big-to-fail,’ and ensure functioning financial markets.
Derivatives
For the first time, the trading of derivatives will move from a primarily over-the-counter market to one utilizing central clearing houses and exchange trading. Both the EU and the U.S. will soon have mandated central clearing of most swaps. In the U.S., beyond those swaps that are fundamentally not suitable for clearing, the only exception to the mandated clearing requirement is for trades where one party is a non-financial, hedging end-user. Otherwise, all swaps that are clearable will be cleared, and in addition required to be executed on an exchange or swap execution facility (SEF). Dodd-Frank also now makes the regulation of over-the-counter derivatives the responsibility of the Commodity Futures Trading Commission and the Securities and Exchange Commission.
In Europe, central clearing of standardized contracts also will take place through CCPs, with additional capital charges made for non-centrally cleared contracts.
SIFMA is working with ISDA and the FIA to ensure that these reforms, among others, will aid in more effectively managing the interconnectivity these products create, without making the cost of risk management prohibitive.
Securitization
When it comes to securitization, we again see very similar mandates on both sides of the Atlantic— mandatory risk retention of 5 percent. However, here in the U.S., Congress provided regulators discretion in imposing such retention and exempted any retention for securitizations of “qualified” residential mortgages, a new classification to be defined, but presumably your plain vanilla, well underwritten, 30-year home loan and allows regulators to implement retention regimes—and amounts—calibrated to different asset classes.
Dodd-Frank also states that regulators should reduce financial institutions’ reliance on credit rating agencies in regulation and supervisory practices. Bank regulators have put out for comment an initial proposal regarding this provision.
The EU has already addressed this by requiring EU market participants use only EU-registered CRA issued ratings for their regulatory purposes.
Getting these efforts right will help create more aligned interests of dealers and investors, without choking off consumer credit for businesses and families.
Capital and Liquidity Requirements
When it comes to capital and liquidity requirements for systematically important companies, Dodd-Frank and Basel III are both fairly specific.
Dodd-Frank requires these companies to maintain a debt-to-equity ratio of 15-to-1, with trust preferred and hybrid capital counting as Tier 2, not Tier 1, capital. Banks are required to hold a 30-day liquidity buffer. What we still need to formulate is a counter-cyclical means of permitting banks to build in capital buffers.
Basel III’s capital and liquidity rule sets out total capital requirements of 10.5 percent, broken out as 8.5 percent Tier 1 capital and 7 percent common equity. Liquidity requirements include a liquidity coverage ratio for 30-day systemic and idiosyncratic risk and a net stable funding ratio for 1-year idiosyncratic risk.
The leverage ratio will supplement, rather than replace, the current risk-based minimum capital ratio.
Still being explored by the committee is the utility of dynamic provisioning as a useful countercyclical measure.
Volcker Rule
Financial institutions in the United States will also have to work with the ban on proprietary trading and private equity within Dodd-Frank has come to be known as the Volcker Rule. All proprietary trading by bank holding companies is prohibited. The important aspect will be how regulators define what activities are deemed “proprietary”’ and thus prohibited, while ensuring that markets remain liquid and deep.
Also, bank holding companies are generally prohibited from investing in, advising on or owning hedge funds or private equity funds. Total investments are limited to 3 percent of tier 1 capital. Investments in a fund within the first year of its establishment are capped at 3 percent of that fund.
The UK’s Independent Banking Commission is calling for evidence on whether limits on proprietary trading and investment are warranted. But how will a U.S.-only rule such as this affect our nation’s competitiveness with Europe, who is generally not considering such a rule?
Fiduciary Duty
A strictly domestic, and far less cut and dry, piece of rulemaking is the creation of a federal fiduciary standard that would apply—uniformly—to all investment advisers and brokers providing personalized investment advice to retail investors about securities, regardless of their business model.
Making sure the standard is written in a way that preserves investor choice of the products and services that best fit individual investment needs is a little tougher. It’s writing rules about the intersection of conduct and offerings.
So, as you’ve seen, six out of the seven areas in Dodd-Frank we’re focusing on have a global, or at the least EU, equivalent.
But we’ll be involved in other areas of the Dodd-Frank rulemaking process, such as compensation, the regulation of hedge funds and short sales. And we’ll also be offering commentary on the convergence of FASB and IFRS and the resulting accounting standards that will emerge.
Reforming Housing Finance
And there are some issues that are vital to the U.S. economy and financial markets that are not in the Dodd-Frank Act. Two immediate concerns are reforming our housing finance system and the taxing capital gains and dividends.
The GSEs, government sponsored entities, primarily through Fannie Mae and Freddie Mac in mortgage finance, have made possible cost-effective lending to consumers for the past 30 years. Our members active in these markets believe some form of government support will be necessary to attract and maintain capital investment in the U.S. mortgage market anywhere near the historical level over the past several decades, but recognize there is no single, easy answer for the task of reforming them.
Additionally, recent press coverage has focused on issues within the mortgage foreclosure process and its impact on the securitization markets. Indeed, some have called for a national moratorium on all foreclosures until these issues have been addressed.
Let me be clear: imposing a system-wide foreclosure moratorium would be catastrophic to the housing market and to the economy.
The mortgage market, investors and the health of the economy are all inter-related. Investors in the housing market include American workers with pension funds, 401(k) plans, and mutual funds. These hardworking Americans would unjustly suffer losses in their savings from a foreclosure moratorium.
A foreclosure moratorium would create increased uncertainty in the already weak securitization and housing markets, further constraining consumer credit and spending and dampening our already unhealthy economic situation.
If mistakes have been made in relation to foreclosure processing, SIFMA firmly believes such mistakes should be corrected accurately and fairly.
While each situation may have variations, we believe the customary loan transfer and assignment practices used in securitization are legally sound an in accordance with generally accepted and settled legal principles. We believe sweeping generalizations regarding endemic defects are not accurate.
Foreclosures are in no one’s best interest, neither the bank nor the homeowner nor the investor, but in some cases are unavoidable. In those situations, moratoriums and similar actions will only delay the inevitable, and lengthen the timeline for housing recovery.
Capital Gains and Dividends Taxation
Investors also need certainty with respect to tax issues as nearly all of the Bush era tax cuts are set to expire at the end of this year. As to capital gains and dividends, without Congressional action—soon—the tax rates on capital gains will increase by 33 percent and the rates on dividends will increase by 164 percent—that’s right 164 percent— this coming January 1. Seniors on fixed incomes will be hit particularly hard by these increases, resulting for many in significant decreases in their discretionary spending. And higher tax rates on investment income will lead to fewer jobs, lower take-home pay and even slower economic.
January 1 is not far off, and that’s a very big change. Right now, the lack of action is already having a negative effect on investors. Investors like certainty, and they’re not getting it. Congress should provide that certainty by extending the current 15 percent tax rates in capital gains and dividends before the end of 2010.
Conclusion
The financial industry and federal regulators are faced with an unprecedented task over the next 2 to 5 years. Many of the agencies tasked with making these rules are taking on responsibilities outside their historical purview; the expertise needed to get these regulations right doesn’t necessarily reside within their walls. However, there is a robust rulemaking process that encourages comment. Again, we are committed to being a valuable resource during this rulemaking process, providing content-rich, fact-based commentary, drawing on the expertise of SIFMA’s member firms, And, when needed, we are moving beyond even that, contracting for third-party, in-depth economic analysis of the effects of proposed regulations.
We’re also concerned with how our new regulations will coordinate with similar efforts internationally. And how all of these new rules, working together, will affect capital formation, credit availability, economic growth, and ultimately the prosperity of consumers.
We’re doing all this because we must get these regulations right; the stakes are too high to do anything less. Unintended consequences of poorly crafted regulations could slow economic growth and stifle job creation; it could create capital market winners and losers.
This is not what any of us wants. We’ll be living with these regulations for decades. Let’s look back at the next two to five years as the time when we laid a foundation for growth and safety—as the time when we all got it right.
-30-
The Securities Industry and Financial Markets Association (SIFMA) brings together the shared interests of hundreds of securities firms, banks and asset managers. SIFMA's mission is to support a strong financial industry, investor opportunity, capital formation, job creation and economic growth, while building trust and confidence in the financial markets. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit www.sifma.org.
Release Date: October 26, 2010
Contact: Andrew DeSouza, (202) 962-7390, adesouza@sifma.org
Statement by SIFMA President and CEO Tim Ryan in Connection with National Economists Club Speech
Washington, DC, October 26, 2010—The Securities Industry and Financial Markets Association today released the following statement from President and CEO Tim Ryan in connection with his speech to the National Economists Club:
—The Securities Industry and Financial Markets Association today released the following statement from President and CEO Tim Ryan in connection with his to the National Economists Club:
235 rulemakings, 41 reports, 71 studies authored by eleven different federal agencies, bureaus and the Government Accountability Office.
That’s what, as legislated by the Dodd-Frank Act, needs to be studied and written over the next two-to-five years. And that’s just in the United States.
Parallel rulemaking is taking shape across the globe, initiated by the same financial crisis, and necessitated by the fact that we do business today in a global economy. It will be vital for global rules to be coordinated and to apply equally to the entire industry to avoid market distortions, regulatory arbitrage and competitive advantages among different jurisdictions.
Our focus—everyone’s focus—must be on how we safeguard our financial system without constraining capital formation, credit availability and our industry’s ability to contribute to economic growth and job creation.
With the breadth and depth of SIFMA’s membership—which includes global, national and regional securities firms, banks and asset managers active in financial markets around the world— we can and will be a trusted, credible resource for everyone participating in the regulatory rulemaking process.
This isn’t about simply meeting the rulemaking deadlines, it’s about getting it done right. The stakes are too high for anything less. Poorly crafted regulations that create market distortions or other unintended consequences could constrain capital formation or even increase systemic risk—the exact opposite of the intent of Dodd-Frank.
To be most effective, SIFMA is focusing primarily on seven areas:
· systemic risk, specifically the new Financial Stability Oversight Counsel and its research arm the Office of Financial Research;
· resolution authority and living wills;
· oversight of the over-the-counter derivatives market;
· securitization and the credit rating agencies;
· capital and liquidity standards via Basel and Dodd-Frank;
· the future of proprietary trading and private equity under what’s come to be known as the Volcker Rule; and
· the creation of a federal fiduciary standard for investment advisors and broker/dealers who provide personalized investment advice to retail investors.
With many firms operating in a global financial system, what happens in one jurisdiction does affect firms operating globally. In addition to the work we’ll be doing on Dodd-Frank rulemaking, we’re paying close attention to what is happening globally, focusing primarily on the west by looking at the regulatory efforts of the United Kingdom, the European Union and the Financial Stability Board.
Systemic Risk
To deal with systemic risk in the U.S., Dodd-Frank has created two new entities, the Financial Stability Oversight Council (FSOC), and its research arm, the Office of Financial Research, which will provide analytical support. FSOC will oversee bank holding companies with total consolidated assets of more than $50 billion. The FSOC can also designate non-bank financial institutions as systemically significant by a 2/3 vote of the FSOC’s 10 voting members.
In Europe, the European Commission is looking into what attributes beyond size alone make an institution financially risky, and, much like the FSOC, has established the European Systemic Risk Board, monitoring risk to the 27 EU countries and coordinating the actions of national supervisors. It is comprised of Europe’s Central Bankers, and to coordinate with among others the European Supervisory Authorities.
Resolution Authority
To address the failure of a large, interconnected financial institution the U.S. and UK has already created a new resolution authority, with Europe following. Dodd–Frank has granted the FDIC the explicit authority to unwind failing firms or covered financial companies, and large complex companies are now required to periodically submit living wills to the FDIC and the Federal Reserve.
In addition to the existing resolution authority, the UK is proposing a separate administrator for investment firms. The UK’s recently passed Financial Services Bill also requires firms to submit living wills. In addition, they are investigating the utility of contingent capital or “CoCos” and bail-ins. Questions remain as to what other countries within the EU might consider and how each of these processes will interact.
In the end, the goal is to provide for a process that will wind down failing institutions, end ‘too-big-to-fail,’ and ensure functioning financial markets.
Derivatives
For the first time, the trading of derivatives will move from a primarily over-the-counter market to one utilizing central clearing houses and exchange trading. Both the EU and the U.S. will soon have mandated central clearing of most swaps. In the U.S., beyond those swaps that are fundamentally not suitable for clearing, the only exception to the mandated clearing requirement is for trades where one party is a non-financial, hedging end-user. Otherwise, all swaps that are clearable will be cleared, and in addition required to be executed on an exchange or swap execution facility (SEF). Dodd-Frank also now makes the regulation of over-the-counter derivatives the responsibility of the Commodity Futures Trading Commission and the Securities and Exchange Commission.
In Europe, central clearing of standardized contracts also will take place through CCPs, with additional capital charges made for non-centrally cleared contracts.
SIFMA is working with ISDA and the FIA to ensure that these reforms, among others, will aid in more effectively managing the interconnectivity these products create, without making the cost of risk management prohibitive.
Securitization
When it comes to securitization, we again see very similar mandates on both sides of the Atlantic— mandatory risk retention of 5 percent. However, here in the U.S., Congress provided regulators discretion in imposing such retention and exempted any retention for securitizations of “qualified” residential mortgages, a new classification to be defined, but presumably your plain vanilla, well underwritten, 30-year home loan and allows regulators to implement retention regimes—and amounts—calibrated to different asset classes.
Dodd-Frank also states that regulators should reduce financial institutions’ reliance on credit rating agencies in regulation and supervisory practices. Bank regulators have put out for comment an initial proposal regarding this provision.
The EU has already addressed this by requiring EU market participants use only EU-registered CRA issued ratings for their regulatory purposes.
Getting these efforts right will help create more aligned interests of dealers and investors, without choking off consumer credit for businesses and families.
Capital and Liquidity Requirements
When it comes to capital and liquidity requirements for systematically important companies, Dodd-Frank and Basel III are both fairly specific.
Dodd-Frank requires these companies to maintain a debt-to-equity ratio of 15-to-1, with trust preferred and hybrid capital counting as Tier 2, not Tier 1, capital. Banks are required to hold a 30-day liquidity buffer. What we still need to formulate is a counter-cyclical means of permitting banks to build in capital buffers.
Basel III’s capital and liquidity rule sets out total capital requirements of 10.5 percent, broken out as 8.5 percent Tier 1 capital and 7 percent common equity. Liquidity requirements include a liquidity coverage ratio for 30-day systemic and idiosyncratic risk and a net stable funding ratio for 1-year idiosyncratic risk.
The leverage ratio will supplement, rather than replace, the current risk-based minimum capital ratio.
Still being explored by the committee is the utility of dynamic provisioning as a useful countercyclical measure.
Volcker Rule
Financial institutions in the United States will also have to work with the ban on proprietary trading and private equity within Dodd-Frank has come to be known as the Volcker Rule. All proprietary trading by bank holding companies is prohibited. The important aspect will be how regulators define what activities are deemed “proprietary”’ and thus prohibited, while ensuring that markets remain liquid and deep.
Also, bank holding companies are generally prohibited from investing in, advising on or owning hedge funds or private equity funds. Total investments are limited to 3 percent of tier 1 capital. Investments in a fund within the first year of its establishment are capped at 3 percent of that fund.
The UK’s Independent Banking Commission is calling for evidence on whether limits on proprietary trading and investment are warranted. But how will a U.S.-only rule such as this affect our nation’s competitiveness with Europe, who is generally not considering such a rule?
Fiduciary Duty
A strictly domestic, and far less cut and dry, piece of rulemaking is the creation of a federal fiduciary standard that would apply—uniformly—to all investment advisers and brokers providing personalized investment advice to retail investors about securities, regardless of their business model.
Making sure the standard is written in a way that preserves investor choice of the products and services that best fit individual investment needs is a little tougher. It’s writing rules about the intersection of conduct and offerings.
So, as you’ve seen, six out of the seven areas in Dodd-Frank we’re focusing on have a global, or at the least EU, equivalent.
But we’ll be involved in other areas of the Dodd-Frank rulemaking process, such as compensation, the regulation of hedge funds and short sales. And we’ll also be offering commentary on the convergence of FASB and IFRS and the resulting accounting standards that will emerge.
Reforming Housing Finance
And there are some issues that are vital to the U.S. economy and financial markets that are not in the Dodd-Frank Act. Two immediate concerns are reforming our housing finance system and the taxing capital gains and dividends.
The GSEs, government sponsored entities, primarily through Fannie Mae and Freddie Mac in mortgage finance, have made possible cost-effective lending to consumers for the past 30 years. Our members active in these markets believe some form of government support will be necessary to attract and maintain capital investment in the U.S. mortgage market anywhere near the historical level over the past several decades, but recognize there is no single, easy answer for the task of reforming them.
Additionally, recent press coverage has focused on issues within the mortgage foreclosure process and its impact on the securitization markets. Indeed, some have called for a national moratorium on all foreclosures until these issues have been addressed.
Let me be clear: imposing a system-wide foreclosure moratorium would be catastrophic to the housing market and to the economy.
The mortgage market, investors and the health of the economy are all inter-related. Investors in the housing market include American workers with pension funds, 401(k) plans, and mutual funds. These hardworking Americans would unjustly suffer losses in their savings from a foreclosure moratorium.
A foreclosure moratorium would create increased uncertainty in the already weak securitization and housing markets, further constraining consumer credit and spending and dampening our already unhealthy economic situation.
If mistakes have been made in relation to foreclosure processing, SIFMA firmly believes such mistakes should be corrected accurately and fairly.
While each situation may have variations, we believe the customary loan transfer and assignment practices used in securitization are legally sound an in accordance with generally accepted and settled legal principles. We believe sweeping generalizations regarding endemic defects are not accurate.
Foreclosures are in no one’s best interest, neither the bank nor the homeowner nor the investor, but in some cases are unavoidable. In those situations, moratoriums and similar actions will only delay the inevitable, and lengthen the timeline for housing recovery.
Capital Gains and Dividends Taxation
Investors also need certainty with respect to tax issues as nearly all of the Bush era tax cuts are set to expire at the end of this year. As to capital gains and dividends, without Congressional action—soon—the tax rates on capital gains will increase by 33 percent and the rates on dividends will increase by 164 percent—that’s right 164 percent— this coming January 1. Seniors on fixed incomes will be hit particularly hard by these increases, resulting for many in significant decreases in their discretionary spending. And higher tax rates on investment income will lead to fewer jobs, lower take-home pay and even slower economic.
January 1 is not far off, and that’s a very big change. Right now, the lack of action is already having a negative effect on investors. Investors like certainty, and they’re not getting it. Congress should provide that certainty by extending the current 15 percent tax rates in capital gains and dividends before the end of 2010.
Conclusion
The financial industry and federal regulators are faced with an unprecedented task over the next 2 to 5 years. Many of the agencies tasked with making these rules are taking on responsibilities outside their historical purview; the expertise needed to get these regulations right doesn’t necessarily reside within their walls. However, there is a robust rulemaking process that encourages comment. Again, we are committed to being a valuable resource during this rulemaking process, providing content-rich, fact-based commentary, drawing on the expertise of SIFMA’s member firms, And, when needed, we are moving beyond even that, contracting for third-party, in-depth economic analysis of the effects of proposed regulations.
We’re also concerned with how our new regulations will coordinate with similar efforts internationally. And how all of these new rules, working together, will affect capital formation, credit availability, economic growth, and ultimately the prosperity of consumers.
We’re doing all this because we must get these regulations right; the stakes are too high to do anything less. Unintended consequences of poorly crafted regulations could slow economic growth and stifle job creation; it could create capital market winners and losers.
This is not what any of us wants. We’ll be living with these regulations for decades. Let’s look back at the next two to five years as the time when we laid a foundation for growth and safety—as the time when we all got it right.
-30-
The Securities Industry and Financial Markets Association (SIFMA) brings together the shared interests of hundreds of securities firms, banks and asset managers. SIFMA's mission is to support a strong financial industry, investor opportunity, capital formation, job creation and economic growth, while building trust and confidence in the financial markets. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit www.sifma.org.
Senin, 25 Oktober 2010
Top Interest Rate Headlines 10-25-10: Treasury Draws Negative Yield for First Time
Treasury Draws Negative Yield for First Time
By Cordell Eddings and Daniel Kruger, Bloomberg
The Treasury sold $10 billion of five-year Treasury Inflation Protected Securities at a negative yield for the first time at a U.S. debt auction as investors bet the Federal Reserve will be successful in sparking inflation.
http://jlne.ws/bEivFI
South Korea's Economic Growth Likely Slowed as Won Surge Endangers Exports
By William Sim and Sarina Yoo, Bloomberg
South Korea’s economic expansion probably slowed last quarter as the nation’s currency surged the most in Asia and global growth cooled, imperiling exports and increasing scope to extend a pause in interest-rate increases.
http://jlne.ws/9bnmYe
CFTC aims for middle ground in segregating funds
By Roberta Rampton and Christopher Doering, Reuters
The U.S. futures regulator is aiming to find middle ground between money managers who want their swaps' collateral protected in times of financial crisis, and the clearinghouses and their members who worry new rules will ratchet up costs.
http://jlne.ws/9BbmIX
Curbing Swaps Correlation Risk Vital, Regulators Told
By Matthew Leising and Shannon D. Harrington, Bloomberg
Regulators need to consider the collective risk of the credit-default swap market when deciding margin requirements for cleared trades, University of Houston finance professor Craig Pirrong said today in Washington.
http://jlne.ws/anJqga
Fed boss: Regulators looking into foreclosure mess
By JEANNINE AVERSA, AP
Federal banking regulators are examining whether mortgage companies cut corners on their own procedures when they moved to foreclose on people's homes, Federal Reserve Chairman Ben Bernanke said Monday.
http://jlne.ws/cYhES1
OTC derivatives trade grows in 2010 despite crackdown - ISDA
By Daisy Ku, Reuters
The outstanding amount of over-the-counter derivatives rose during the first half of 2010 despite calls by regulators to move much of the market on to exchanges, the International Swaps and Derivatives Association said on Monday.
http://jlne.ws/aVPeD3
CFTC Shouldn't Allow Margin Rules to Aid CME Group, ELX Says
By Matthew Leising, Bloomberg
The U.S. commodity regulator shouldn't allow proposed rules on margin offsets for futures and swaps trades to be used to cement CME Group Inc.'s monopoly in U.S. markets, according to competitor ELX Futures LP.
http://jlne.ws/9ZDdg4
ELX Press Statement to CFTC on Portfolio Managing Procedures (Dodd-Frank Act)
To summarize: ELX believes that any action by the CFTC to permit and foster portfolio margining between swaps and futures must promote competition among execution and clearing alternatives, and choice by market participants. ELX is against any discretionary action, such as the granting of a 4d order, that would allow the CME Group to assure its ongoing monopoly power in futures, and develop monopoly power over the clearing of swaps. CME controls over 96% of regulated futures trading and clearing. Given such dominance, the CFTC should ensure that portfolio margining systems not be used to prevent competition. In addition, any action by the Commission on this issue should be by rulemaking of general applicability and not by individual order or exemption. In order to protect against the CME from gaining further monopoly power as a result of a new statutory scheme - something not intended by the "open access" provisions of the Dodd Frank Act - ELX strongly recommends that the CFTC not adopt a portfolio margining regime unless it adequately protects the ability of other exchanges and DCOs to adopt different market mechanisms for position transfers. including EFF transactions.
http://jlne.ws/cLnh6e
Wall Street Sold `Tragically Deficient' Product, Angelides Says
By Phil Mattingly, Bloomberg
Wall Street firms such as Goldman Sachs Group Inc. and Citigroup Inc. created products that were "tragically deficient," in the view of the chairman of the panel charged by Congress with identifying the causes of the financial crisis.
http://jlne.ws/d9uzfk
CME to Begin Trading 'On-the-Run' Treasury Futures Contracts
By Liz Capo McCormick, Bloomberg
CME Group Inc., the world's largest futures market, will begin trading on-the-run Treasury futures contracts next week that will provide investors exposure to benchmark 2-, 5- and 10-year notes.
http://jlne.ws/bJ2l7O
G20 reaches agreement on global banking
The Age
G20 finance ministers have reached agreement on tougher rules for banks and big finance firms blamed for triggering the global economic crisis.
http://jlne.ws/devcz9
Plosser Says Fed in 'Difficult Spot' on Mortgage-Debt Buybacks
BusinessWeek
The Federal Reserve's effort to recover taxpayer money used in bailouts while also ensuring the stability of the financial system puts it in a "difficult spot," said Charles Plosser, president of the Philadelphia Fed.
http://jlne.ws/c0DQJt
Brussels looks to cut settlement times
By Jeremy Grant in London and Nikki Tait in Brussels, FT.com
European regulators are considering ways to cut the time it takes for securities to be processed after trades are done in a bid to reduce risks to the system in the event of defaults and other large financial failures.
http://jlne.ws/c5Q5zj
U.S. Treasury Shielding of Citigroup With Deletions Make FOIA Meaningless
Bloomberg
The late Bloomberg News reporter Mark Pittman asked the U.S. Treasury in January 2009 to identify $301 billion of securities owned by Citigroup Inc. that the government had agreed to guarantee . He made the request on the grounds that taxpayers ought to know how their money was being used.
http://jlne.ws/cMOgKB
By Cordell Eddings and Daniel Kruger, Bloomberg
The Treasury sold $10 billion of five-year Treasury Inflation Protected Securities at a negative yield for the first time at a U.S. debt auction as investors bet the Federal Reserve will be successful in sparking inflation.
http://jlne.ws/bEivFI
South Korea's Economic Growth Likely Slowed as Won Surge Endangers Exports
By William Sim and Sarina Yoo, Bloomberg
South Korea’s economic expansion probably slowed last quarter as the nation’s currency surged the most in Asia and global growth cooled, imperiling exports and increasing scope to extend a pause in interest-rate increases.
http://jlne.ws/9bnmYe
CFTC aims for middle ground in segregating funds
By Roberta Rampton and Christopher Doering, Reuters
The U.S. futures regulator is aiming to find middle ground between money managers who want their swaps' collateral protected in times of financial crisis, and the clearinghouses and their members who worry new rules will ratchet up costs.
http://jlne.ws/9BbmIX
Curbing Swaps Correlation Risk Vital, Regulators Told
By Matthew Leising and Shannon D. Harrington, Bloomberg
Regulators need to consider the collective risk of the credit-default swap market when deciding margin requirements for cleared trades, University of Houston finance professor Craig Pirrong said today in Washington.
http://jlne.ws/anJqga
Fed boss: Regulators looking into foreclosure mess
By JEANNINE AVERSA, AP
Federal banking regulators are examining whether mortgage companies cut corners on their own procedures when they moved to foreclose on people's homes, Federal Reserve Chairman Ben Bernanke said Monday.
http://jlne.ws/cYhES1
OTC derivatives trade grows in 2010 despite crackdown - ISDA
By Daisy Ku, Reuters
The outstanding amount of over-the-counter derivatives rose during the first half of 2010 despite calls by regulators to move much of the market on to exchanges, the International Swaps and Derivatives Association said on Monday.
http://jlne.ws/aVPeD3
CFTC Shouldn't Allow Margin Rules to Aid CME Group, ELX Says
By Matthew Leising, Bloomberg
The U.S. commodity regulator shouldn't allow proposed rules on margin offsets for futures and swaps trades to be used to cement CME Group Inc.'s monopoly in U.S. markets, according to competitor ELX Futures LP.
http://jlne.ws/9ZDdg4
ELX Press Statement to CFTC on Portfolio Managing Procedures (Dodd-Frank Act)
To summarize: ELX believes that any action by the CFTC to permit and foster portfolio margining between swaps and futures must promote competition among execution and clearing alternatives, and choice by market participants. ELX is against any discretionary action, such as the granting of a 4d order, that would allow the CME Group to assure its ongoing monopoly power in futures, and develop monopoly power over the clearing of swaps. CME controls over 96% of regulated futures trading and clearing. Given such dominance, the CFTC should ensure that portfolio margining systems not be used to prevent competition. In addition, any action by the Commission on this issue should be by rulemaking of general applicability and not by individual order or exemption. In order to protect against the CME from gaining further monopoly power as a result of a new statutory scheme - something not intended by the "open access" provisions of the Dodd Frank Act - ELX strongly recommends that the CFTC not adopt a portfolio margining regime unless it adequately protects the ability of other exchanges and DCOs to adopt different market mechanisms for position transfers. including EFF transactions.
http://jlne.ws/cLnh6e
Wall Street Sold `Tragically Deficient' Product, Angelides Says
By Phil Mattingly, Bloomberg
Wall Street firms such as Goldman Sachs Group Inc. and Citigroup Inc. created products that were "tragically deficient," in the view of the chairman of the panel charged by Congress with identifying the causes of the financial crisis.
http://jlne.ws/d9uzfk
CME to Begin Trading 'On-the-Run' Treasury Futures Contracts
By Liz Capo McCormick, Bloomberg
CME Group Inc., the world's largest futures market, will begin trading on-the-run Treasury futures contracts next week that will provide investors exposure to benchmark 2-, 5- and 10-year notes.
http://jlne.ws/bJ2l7O
G20 reaches agreement on global banking
The Age
G20 finance ministers have reached agreement on tougher rules for banks and big finance firms blamed for triggering the global economic crisis.
http://jlne.ws/devcz9
Plosser Says Fed in 'Difficult Spot' on Mortgage-Debt Buybacks
BusinessWeek
The Federal Reserve's effort to recover taxpayer money used in bailouts while also ensuring the stability of the financial system puts it in a "difficult spot," said Charles Plosser, president of the Philadelphia Fed.
http://jlne.ws/c0DQJt
Brussels looks to cut settlement times
By Jeremy Grant in London and Nikki Tait in Brussels, FT.com
European regulators are considering ways to cut the time it takes for securities to be processed after trades are done in a bid to reduce risks to the system in the event of defaults and other large financial failures.
http://jlne.ws/c5Q5zj
U.S. Treasury Shielding of Citigroup With Deletions Make FOIA Meaningless
Bloomberg
The late Bloomberg News reporter Mark Pittman asked the U.S. Treasury in January 2009 to identify $301 billion of securities owned by Citigroup Inc. that the government had agreed to guarantee . He made the request on the grounds that taxpayers ought to know how their money was being used.
http://jlne.ws/cMOgKB
Grant Thornton National Chief Financial Officer Survey Finds Inflation Creeping In
Grant Thornton LLP recently completed its biannual national survey of 516 U.S. chief financial officers. The findings included the following:
Inflation Creeping In
While 62% expect no increase in prices over next six months, 31% expect their prices to increase. This is up from 24% six months earlier. Only 7% expect to reduce prices.
Over the next six months, do you expect prices or fees charged by your company to:
10/10 3/10 9/09 3/09
Remain the same 62% 67% 67% 70%
Increase 31% 24% 22% 15%
Decrease 7% 9% 11% 15%
The best way to create jobs is:
Cut corporate tax rate – 35%
Cut personal income tax rates – 29%
Tax credit for new hires – 22%
Government stimulus programs – 9%
R And D credits – 5%
Are you concerned about a double-dip recession?
Yes – 59%
No – 41%
***
About Grant Thornton LLP
The people in the independent firms of Grant Thornton International Ltd provide personalized attention and the highest quality service to public and private clients in more than 100 countries. Grant Thornton LLP is the U.S. member firm of Grant Thornton International Ltd, one of the six global audit, tax and advisory organizations. Grant Thornton International Ltd and its member firms are not a worldwide partnership, as each member firm is a separate and distinct legal entity.
Inflation Creeping In
While 62% expect no increase in prices over next six months, 31% expect their prices to increase. This is up from 24% six months earlier. Only 7% expect to reduce prices.
Over the next six months, do you expect prices or fees charged by your company to:
10/10 3/10 9/09 3/09
Remain the same 62% 67% 67% 70%
Increase 31% 24% 22% 15%
Decrease 7% 9% 11% 15%
The best way to create jobs is:
Cut corporate tax rate – 35%
Cut personal income tax rates – 29%
Tax credit for new hires – 22%
Government stimulus programs – 9%
R And D credits – 5%
Are you concerned about a double-dip recession?
Yes – 59%
No – 41%
***
About Grant Thornton LLP
The people in the independent firms of Grant Thornton International Ltd provide personalized attention and the highest quality service to public and private clients in more than 100 countries. Grant Thornton LLP is the U.S. member firm of Grant Thornton International Ltd, one of the six global audit, tax and advisory organizations. Grant Thornton International Ltd and its member firms are not a worldwide partnership, as each member firm is a separate and distinct legal entity.
Jumat, 22 Oktober 2010
Top Interest Rate Headlines 10-22-10: Fed's Fisher: Policy Makers Must Be Aware of Dollar Impact
Fed's Fisher: Policy Makers Must Be Aware of Dollar Impact
Bloomberg
Federal Reserve officials need to be mindful of the effect their actions are having on the dollar, said Richard Fisher, president of the Fed bank of Dallas and a former deputy U.S. trade representative.
http://jlne.ws/aNG7IT
How Howard Lutnick Is Growing Cantor and BGC
BusinessWeek
The Cantor Fitzgerald chief is on a hiring binge, opening new offices abroad, and moving the firm in new directions
http://jlne.ws/bvu7wI
Singapore Exchange eyes up a move for ASX
Sydney Morning Herald
The nation's monopoly sharemarket operator, the ASE, is back in talks with its offshore peers.
http://jlne.ws/9s7zkO
Foreign Banks Selling Swaps in U.S. to Face Dodd-Frank Rules, Gensler Says
Bloomberg
International banks selling derivatives in the U.S. will face higher capital requirements and new business conduct standards under the most sweeping rewrite of Wall Street rules since the Great Depression, according to a top regulator.
http://jlne.ws/d5bgzn
President's Working Group On Financial Markets Releases Money Market Funds Report
Press Release
The President's Working Group on Financial Markets (PWG) today released a report detailing a number of options for reforms related to money market funds. These options address the vulnerabilities of money market funds that contributed to the financial crisis in 2008.
http://jlne.ws/cxgbC7
Morgan Stanley Clears OTC Derivative Trades at CME
Press Release
Morgan Stanley, a market leader in derivatives trading and clearing, announced today that it has cleared OTC interest rate swap transactions for clients of the firm at the Chicago Mercantile Exchange (CME). Trades were cleared on the first day of operation of the CME Clearing service for interest rate swaps. This follows the previously announced clearing of client OTC Credit Default Swap (CDS) transactions at CME's CDS clearing service.
http://jlne.ws/dcbwGQ
Bank levy raises worries over 'double taxation'
Daily Telegraph
Banks face being taxed twice on their balance sheets in the first year of the Government's new L2.5bn levy with Britain unlikely to reach an agreement with other countries on the issue of double taxation before the measure is introduced next year.
http://jlne.ws/d7J0xK
UBS Appoints Miskovic as Chief Risk Officer, Lofts as CEO of the Americas
Bloomberg
UBS AG , Switzerland's largest bank, hired Maureen Miskovic as chief risk officer, the first woman to join its 13-member group executive board.
http://jlne.ws/9eo8K
Jefferies Names James Golden Head of Treasury Desk
BusinessWeek
Jefferies & Co., one of the 18 primary dealers that trade U.S. government debt with the Federal Reserve, hired former Royal Bank of Scotland Plc trader James Golden as head of its Treasury trading desk.
http://jlne.ws/dlIpWn
Spain's Banco Santander wins EU approval to buy RBS assets
People's Daily
Banco Santander of Spain has won approval from the European Union (EU) to buy a number of retail and commercial banking assets of the Royal Bank of Scotland Group (RBS) in Britain.
http://jlne.ws/9pZAE9
New York Fed Faces 'Conflict' in Mortgage Buybacks
BusinessWeek
The Federal Reserve Bank of New York's effort to recover taxpayer money used in bailouts during the crisis may be at odds with its mission to ensure the stability of the financial system.
http://jlne.ws/9r22oF
CFTC May Finish Proposed Swaps Rules by Mid-December
By SARAH N. LYNCH, WSJ.com
WASHINGTON-The Commodity Futures Trading Commission hopes to finish proposing all of its new over-the-counter derivatives regulations by mid-December, but to implement them it may need 400 additional staffers, CFTC Chairman Gary Gensler said Thursday.
http://jlne.ws/aJfgoi
Bloomberg
Federal Reserve officials need to be mindful of the effect their actions are having on the dollar, said Richard Fisher, president of the Fed bank of Dallas and a former deputy U.S. trade representative.
http://jlne.ws/aNG7IT
How Howard Lutnick Is Growing Cantor and BGC
BusinessWeek
The Cantor Fitzgerald chief is on a hiring binge, opening new offices abroad, and moving the firm in new directions
http://jlne.ws/bvu7wI
Singapore Exchange eyes up a move for ASX
Sydney Morning Herald
The nation's monopoly sharemarket operator, the ASE, is back in talks with its offshore peers.
http://jlne.ws/9s7zkO
Foreign Banks Selling Swaps in U.S. to Face Dodd-Frank Rules, Gensler Says
Bloomberg
International banks selling derivatives in the U.S. will face higher capital requirements and new business conduct standards under the most sweeping rewrite of Wall Street rules since the Great Depression, according to a top regulator.
http://jlne.ws/d5bgzn
President's Working Group On Financial Markets Releases Money Market Funds Report
Press Release
The President's Working Group on Financial Markets (PWG) today released a report detailing a number of options for reforms related to money market funds. These options address the vulnerabilities of money market funds that contributed to the financial crisis in 2008.
http://jlne.ws/cxgbC7
Morgan Stanley Clears OTC Derivative Trades at CME
Press Release
Morgan Stanley, a market leader in derivatives trading and clearing, announced today that it has cleared OTC interest rate swap transactions for clients of the firm at the Chicago Mercantile Exchange (CME). Trades were cleared on the first day of operation of the CME Clearing service for interest rate swaps. This follows the previously announced clearing of client OTC Credit Default Swap (CDS) transactions at CME's CDS clearing service.
http://jlne.ws/dcbwGQ
Bank levy raises worries over 'double taxation'
Daily Telegraph
Banks face being taxed twice on their balance sheets in the first year of the Government's new L2.5bn levy with Britain unlikely to reach an agreement with other countries on the issue of double taxation before the measure is introduced next year.
http://jlne.ws/d7J0xK
UBS Appoints Miskovic as Chief Risk Officer, Lofts as CEO of the Americas
Bloomberg
UBS AG , Switzerland's largest bank, hired Maureen Miskovic as chief risk officer, the first woman to join its 13-member group executive board.
http://jlne.ws/9eo8K
Jefferies Names James Golden Head of Treasury Desk
BusinessWeek
Jefferies & Co., one of the 18 primary dealers that trade U.S. government debt with the Federal Reserve, hired former Royal Bank of Scotland Plc trader James Golden as head of its Treasury trading desk.
http://jlne.ws/dlIpWn
Spain's Banco Santander wins EU approval to buy RBS assets
People's Daily
Banco Santander of Spain has won approval from the European Union (EU) to buy a number of retail and commercial banking assets of the Royal Bank of Scotland Group (RBS) in Britain.
http://jlne.ws/9pZAE9
New York Fed Faces 'Conflict' in Mortgage Buybacks
BusinessWeek
The Federal Reserve Bank of New York's effort to recover taxpayer money used in bailouts during the crisis may be at odds with its mission to ensure the stability of the financial system.
http://jlne.ws/9r22oF
CFTC May Finish Proposed Swaps Rules by Mid-December
By SARAH N. LYNCH, WSJ.com
WASHINGTON-The Commodity Futures Trading Commission hopes to finish proposing all of its new over-the-counter derivatives regulations by mid-December, but to implement them it may need 400 additional staffers, CFTC Chairman Gary Gensler said Thursday.
http://jlne.ws/aJfgoi
Kamis, 21 Oktober 2010
October 21, 2010: Geithner's Goal: Rebalanced World Economy
Conversation Starter
IMF Sees Strong Growth in Asia Continuing, Further Policy Tightening Needed
IMF Press Release No. 10/393
October 21, 2010
Asia remains firmly in the lead of the global economic recovery and strong growth in the region is set to continue, the International Monetary Fund (IMF) said today in its latest Regional Economic Outlook (REO) for Asia and the Pacific which was released in Jakarta, Indonesia. The expansion in Asia exceeded expectations in the first half of the year, the IMF said, prompting the Fund to revise up its 2010 growth forecast for the region to 8 percent, nearly 1 percentage point higher than its April forecast. Economies across the region are expanding strongly. China and India are leading the way with projected 2010 growth rates of 10.5 percent and 9.7 percent, respectively, while Indonesia is expected to grow by 6 percent. In Japan, growth is now projected at 2.8 percent. In 2011, regional growth is expected to moderate to a more sustainable pace of 6.8 percent.
See the full IMF report here:
Regional Economic Outlook: Asia and Pacific Consolidating the Recovery and Building Sustainable Growth
***CN: The IMF report concludes, in part, that re-balancing Asia’s growth remains the top policy priority over the medium term. With external demand from advanced economies unlikely to return to pre-crisis levels in the foreseeable future, Asia will need stronger domestic demand to continue along a robust growth path. A broad range of reforms are needed to support domestic consumption and investment, including strengthening social safety nets, ensuring access to credit, easing restrictions in service sectors and improving infrastructure, the IMF says.
Lead Stories
Geithner's Goal: Rebalanced World Economy
By DAMIAN PALETTA And DAVID WESSEL, WSJ.com
Treasury Secretary Timothy Geithner said he would use weekend meetings of G-20 finance ministers to advance efforts to "rebalance" the world economy so it is less reliant on U.S. consumers, to move toward establishing "norms" on exchange-rate policy, and to persuade others the U.S. doesn't aim to devalue its way to prosperity.
http://jlne.ws/dhk1kK
Fannie, Freddie could need $363 billion, FHFA says
By Steve Goldstein, MarketWatch
The Federal Housing Finance Agency on Thursday released projections of the financial performance of Fannie Mae and Freddie Mac and estimated they could draw between $221 billion to $363 billion from the government under the preferred stock purchase agreements. To date, the firms have drawn $148 billion. The projected credit losses in each scenario primarily reflect possible further losses on the enterprises' pre-conservatorship mortgage business
http://jlne.ws/9GCUlw
Americans Aren't Saving Enough for Retirement, Study Finds
By CATHERINE RAMPELL, The New York Times
The typical middle-age American is saving far too little for retirement, and the Employee Benefit Research Institute has estimated the shortfall: an average of $47,732 per individual over the course of that person’s retirement.
http://jlne.ws/d5gjWc
Japan’s Toxic Cocktail Fails U.S. Taste Test: Caroline Baum
By Caroline Baum, Bloomberg
Japan is an old country, and I’m not talking about the place. Twenty percent of the population is 65 or older, putting Japan in first place, in a tie with Italy, in the geriatric country competition, according to the Stanford Center on Longevity.
http://jlne.ws/daSSiq
G20 to mull current account targets: U.S. aide
By Greg Robb, MarketWatch
Finance ministers and central bank governors of the Group of 20 nations will discuss setting targets for current account deficits at their meeting in South Korea this weekend, a senior U.S. Treasury official said Wednesday.
http://jlne.ws/cHQn80
Bernanke Makes Case for Further Fed Moves to Boost Economy
By JON HILSENRATH, WSJ.com
Federal Reserve Chairman Ben Bernanke made a case for new steps by the central bank to boost economic growth, saying inflation was running below the Fed's objective of 2% and that the economy was on a course to grow too slowly to reduce unemployment.
http://jlne.ws/aqjSZt
US Treasury seeks advice on adding 5-yr, 30-yr TIPS
Reuters
The U.S. Treasury signaled on Friday it may add more inflation-indexed notes to its auction calendar, asking government bond dealers their views on a second quarterly reopening for 5-year and 30-year Treasury Inflation Protected Securities (TIPS).
http://jlne.ws/9bU2Zv
***CN: An opportunity to be heard, government bond dealers.
Cost of bank reform could explode: Deutsche Bank CEO
By Steve Slater, Reuters
The economic cost of tougher global capital rules for banks could explode if further requirements on big banks are not co-ordinated, Deutsche Bank (DBKGn.DE) chief executive Josef Ackermann said.
http://jlne.ws/aBMRRr
B of A pressured to buy back bad mortgages
By Wallace Witkowski, MarketWatch
A bondholders' group is seeking to force Bank of America Corp. to buy back some $47 billion in bad mortgages packaged by Countrywide Financial Corp., according to a published report Tuesday. Bloomberg News, citing unnamed people familiar with the matter, reported that Pacific Investment Management Co., BlackRock Inc., and the Federal Reserve Bank of New York wrote to Bank of America and Bank of New York Mellon Corp., the debt's trustee, faulting Countrywide for not servicing the loans properly.
http://jlne.ws/9d3epe
Pimco, NY Fed Said to Seek BofA Repurchase of Mortgages
By Jody Shenn, Bloomberg
Pacific Investment Management Co., BlackRock Inc. and the Federal Reserve Bank of New York are seeking to force Bank of America Corp. to repurchase soured mortgages packaged into $47 billion of bonds by its Countrywide Financial Corp. unit, people familiar with the matter said.
http://jlne.ws/dfaHUg
Osborne: Bank levy to be permanent
BBC
A levy on bank balance sheets will be made permanent, potentially raising billions of pounds, Chancellor George Osborne has confirmed. The chancellor said he would introduce legislation on Thursday in order "to extract the maximum sustainable tax revenues from financial services."
http://jlne.ws/9ejhbI
Buffett Raises Stake in Munich Re
BY WILLIAM LAUNDER AND ERIK HOLM, WSJ.com
German reinsurer Munich Re said billionaire investor Warren Buffett continues to increase his stake in the company and that he plans to raise the holdings further over the next year.
http://jlne.ws/bpdHR3
China Raises Interest Rates
By ANDREW BATSON, WSJ.com
China raised interest rates for the first time since emerging from the financial crisis, in a surprise move that highlights the widening gap in the world economy between economically vibrant developing countries and the rich nations trying to fend off stagnation.
http://jlne.ws/copgpn
Officials Hint Fed on the Verge of More Easing
By Mark Felsenthal and Pedro da Costa, Reuters
A string of Federal Reserve officials on Tuesday indicated the central bank will soon offer further monetary stimulus to the economy, with one saying $100 billion a month in bond buys may be appropriate.
http://jlne.ws/dx0XF4
Bondholders Pick a Fight With Banks
By RUTH SIMON, WSJ.com
As banks restart foreclosures they had suspended, bondholders are stepping up efforts to recoup losses on soured mortgage portfolios amid concern about sloppy mortgage servicing and underwriting practices.
http://jlne.ws/cZjmb4
Basel III to ease in new bank liquidity rules
Reuters
Global banking supervisors agreed on Tuesday to phase in the introduction of a key new global standard on lenders' minimum short-term funding cover, handing further relief to a sector facing a hefty funding gap.
http://jlne.ws/dtcUqQ
Former Citadel trader fined $1.1 million
Chicago Tribune
Mikhail 'Misha' Malyshev ordered to pay fine to 2 charities after violating judge's order to preserve potential evidence in lawsuit
A former executive of hedge fund manager Citadel Investment Group LLC recently gave about $1.1 million to two Chicago charities, but the payments were not an act of good will.
http://jlne.ws/dybm3i
Memory of 1995 Treasuries Rally Spurs Debt Before November U.S. Election
Bloomberg
Bond investors are looking back to the last time a Democratic president lost control of Congress and concluding, like then, that gridlock in Washington is good news for Treasuries.
http://jlne.ws/dgTX7r
Events
Mortgage Foreclosures and the Future of Housing Finance
When: Oct. 25-26, 2010
Where: L. William Seidman Center, Arlington, VA
Full info: http://www.chicagofed.org/webpages/events/2010/frbc_fdic_mortgage_foreclosure.cfm#
Details: The Federal Reserve System and the Federal Deposit Insurance Corporation (FDIC) are co-hosting a two-day conference highlighting policy-oriented research focused on U.S. housing and mortgage markets. The conference will emphasize two major issues: mortgage foreclosures and the future of housing finance. We will evaluate the current foreclosure situation, emphasizing the adverse neighborhood spillover effects and evaluations of efforts to mitigate foreclosures including loan modification efforts. We will also take a broader perspective and evaluate the future of housing finance. This will include an evaluation of the mortgage interest tax deduction, affordable housing issues, the future role of government-sponsored entities, the future of private-label mortgage securitization, the viability and role of private mortgage insurance, and the role of the Community Reinvestment Act.
Greece is Changing
Hellenic Observatory 11th Annual Lecture in association with APCO worldwide
When: Nov. 8, 2010
Where: LSE Campus
Full info: http://www2.lse.ac.uk/publicEvents/events/2010/20101108t1830vLSE.aspx
Details: The Greek sovereign debt crisis of 2010 has received world-wide attention and has elicited unprecedented action by the European Union and its member governments as well as by the IMF. Greece is now obliged to follow the terms of the 'Memorandum' agreed with the 'bail-out' loan it has received. Is Greek economic policy on track? What are its future prospects?
Deutsche Bank Annual Financial Technology Senior Executive Forum
When: Nov. 9-10, 2010
Where: The Pierre in New York
Full info: http://conferences.db.com/americas/fintech10/
Details: Participants will include prominent figures from exchange, FCM / Inter-dealer broker, trading technology, merchant acquiring, payment processing, prepaid, information provider, and financial software companies. Through a series of interactive panels, these senior business leaders will explore the challenges and opportunities as they expand into new markets, face increasing global competition, and respond to an ever-changing regulatory environment.
For context, this is not a research analyst conference but rather, a forum that organized to engage senior executives in industry-related discussions. This forum is also an excellent networking opportunity as the individuals who attend are decision-makers within their organizations. Similar to last year, this year's forum will feature panel discussions comprised of senior executives and board members from a variety of industry sub-sectors.
***CN: Note, Deutsche Bank reserves the right to determine which attendees have priority for admission.
Economic News
Housing Starts Rise to Five-Month High in Sign of Stabilization
By Bob Willis, Bloomberg
Builders in the U.S. unexpectedly began work on more homes in September, a sign the real estate market was stabilizing at depressed levels heading into the recent upheaval in the foreclosure crisis.
http://jlne.ws/chRo0z
Production in U.S. Unexpectedly Falls for First Time in a Year
Bloomberg
Production in the U.S. unexpectedly dropped in September for the first time in more than a year, evidence of the slowdown in growth that is concerning some Federal Reserve policy makers.
http://jlne.ws/bkun8b
U.S. Workers' Compensation Claims Decline in 2009 as Unemployment Lingers
Bloomberg
Workers’ compensation claims declined last year, extending a slide that began in 1991, as improving job conditions and higher unemployment reduced accident frequency, preliminary insurance-industry data show.
http://jlne.ws/c1FBeD
Sept. leading economic index climbs 0.3%
By Steve Goldstein, MarketWatch
U.S. economic growth is "slow" and doesn't have momentum, the Conference Board said Thursday as it reported that its leading economic index rose 0.3% in September. The leading economic index - a weighted gauge of ten separate indicators - rose as economists polled by MarketWatch had anticipated. The six-month change has slowed to 0.8% from 5.1%. The index for August was revised lower to 0.1%, from the 0.3% rise initially reported, and the July index was revised higher to 0.2%, from the 0.1% rise initially reported.
http://jlne.ws/9lL1NW
Jobless claims fall, but still stuck
By Hibah Yousuf, CNNMoney.com
The number of Americans filing for first-time unemployment benefits fell last week, but continued to drift in the same range they have been for about a year, signaling ongoing weakness in the labor market.
http://jlne.ws/9TPzfS
Exchanges, Clearing Houses & MTFs
Micex Eases Investor Rules to Double Bond Market: Russia Credit
By Emma O’Brien, Bloomberg
Russia is seeking to lure buyers for a record amount of debt sales by easing foreign investor restrictions and offering futures on government bonds for the first time.
http://jlne.ws/do2J0O
***CN: Bold move on the part of Micex.
Nasdaq's IDCG Broadens Swap-Clearing Service As Business Rises
By Jacob Bunge, Of DOW JONES NEWSWIRES
A derivatives clearing venture backed by Nasdaq OMX Group Inc. (NDAQ) has broadened the way it handles customers' swap transactions as the still-small platform gathers business. The International Derivatives Clearing Group, or IDCG, in recent weeks has moved to allow customers to back up interest-rate swap transactions in their existing form, alongside an existing service that converts swap deals to futures contracts, according to the company's chief executive.
http://jlne.ws/9JERBv
CME Group Begins Interest-Rate Swap Clearing Service
By JACOB BUNGE, WSJ.com
CME Group Inc. on Monday rolled out a new service that will handle over-the-counter derivatives transactions tied to fluctuations in global interest rates.
http://jlne.ws/92RTes
CME Group Begins Clearing OTC Interest Rate Swaps
Press Release
CME Group, the world's leading and most diverse derivatives marketplace, announced today that it has begun clearing over-the-counter (OTC) interest rate swaps through CME Clearing.
http://jlne.ws/aKXl27
CME Group wants facelift for credit default swaps
Reuters
CME Group Inc. will try to revamp its languishing credit default swaps clearing service, which has been all but eclipsed by rival clearinghouse operator IntercontinentalExchange Inc., a CME executive said on Monday.
Crain's Chicago Business
http://jlne.ws/9sxAJm
Citi Clears First Interest Rate Swap Trades for Clients on Chicago Mercantile Exchange
Press Release
Citi, a global leader in central clearing, announced today that it has cleared its first client trades through the Chicago Mercantile Exchange (CME) on the CME’s newly launched interest rate swap clearing platform. The trades executed through CME reflect Citi’s commitment to a consolidated, global and platform-agnostic approach to central clearing. In addition to CME, Citi currently clears interest rate swap trades for clients through LCH.Clearnet’s Swapclear service.
http://jlne.ws/bODNdv
Firms & Banks
Big Banks May Escape Capital Surcharge as Global Talks Founder
Bloomberg
Leaders of the world’s largest economies, divided over how to curb risk-taking by their biggest banks, will likely fail to agree on a capital surcharge.
http://jlne.ws/aJumaf
UBS in Talks With Dozens of Prop Traders Mulling Hedge Funds
Bloomberg
UBS AG the largest Swiss bank, said it has been in talks with “dozens” of proprietary traders from firms worldwide who may start their own hedge funds as banks seek to comply with new U.S. rules aimed at curbing risk.
http://jlne.ws/bt0McK
Wells Fargo Reports Record Earnings
BY MARSHALL ECKBLAD, WSJ.com
Wells Fargo & Co. harnessed a surge in mortgage originations in the third quarter to post record earnings, even as new regulations and a soft economy hurt other revenue, such as overdraft fees and interest income.
http://jlne.ws/bABAIG
Goldman Sachs Profit Beats Estimates as Expenses Drop
By Christine Harper, Bloomberg
Goldman Sachs Group Inc., the biggest securities firm by revenue, said profit dropped 40 percent, beating analysts’ estimates, as lower costs and higher investment-banking revenue cushioned a decline in trading.
http://jlne.ws/9KpupS
Guy Hands Testifies in Case Against Citigroup
The New York Times
Guy Hands, the charismatic British financier, took the witness stand on Tuesday before a packed federal courtroom in Lower Manhattan to pursue his fight with Citigroup. Mr. Hands’s private-equity firm, Terra Firma Capital Partners, has sued the bank over its failed buyout of the EMI Group, accusing Citigroup of lying to him about the presence of another bidder during the auction of the music company.
http://jlne.ws/bNed9a
Citigroup to Have 1.5B Shares Sold Off by Treasury
ThirdAge
Citigroup is preparing for a large sale of shares by the U.S. Treasury after the government agency said Tuesday it was preparing to sell 1.5 billion shares of common stock out of its holdings of 3.5 billion shares.
http://jlne.ws/cwlynM
Goldman Sachs Cuts Compensation Pool to $370,706 per Employee
By Christine Harper and Michael J. Moore, Bloomberg
Goldman Sachs Group Inc. set aside $13.1 billion for compensation and benefits in the first nine months of the year, down 21 percent from a year earlier, as revenue fell 14 percent.
http://jlne.ws/c0pfJW
Morgan Stanley Said to Get Nod to Sell C.I.C.C.
New York Times
Morgan Stanley has obtained regulatory approval for its planned sale of a 34.3 percent stake in Chinese investment bank China International Capital Corp , state media reported on Tuesday, according to Reuters.
http://jlne.ws/btcQvW
Goldman Pushes Its Image Rehab
By LIZ RAPPAPORT, WSJ.com
Goldman Sachs Group Inc. is taking its first steps to change the way it does business after it weathered harsh criticism and paid a $550 million fine tied to its actions before and during the financial crisis.
http://jlne.ws/98UNdN
Auctions & Statistics
Treasury to Offer $25B 56-Day Cash Management Bill
By Gary Siegel, The Bond Buyer
The Treasury Department said it will auction $25 billion 56-day cash management bills on Wednesday, October 20.
http://jlne.ws/aZJ48w
Regulations
FSB Seeks to Reduce Reliance on Rating Agencies
BY NATASHA BRERETON, WSJ.com
Financial Stability Board Chairman Mario Draghi said the body's members have endorsed principles to reduce the excessive reliance by governments and financial institutions on credit-rating agencies.
http://jlne.ws/cox1xd
Commodity Futures Trading Commission judge says colleague biased against complainants
The Washington Post
As George H. Painter was preparing to retire recently as one of two administrative law judges presiding over investor complaints at the Commodity Futures Trading Commission, he issued an extraordinary request: Please don't assign my pending cases to the other judge.
http://jlne.ws/a45q8o
Rubin Says U.S. Should Focus on Deficit, Not More Stimulus
By James Sterngold, Bloomberg
U.S. policy makers should focus on deficit reduction rather than an economic-stimulus package or additional bond purchases by the Federal Reserve, former Treasury Secretary Robert Rubin said.
http://jlne.ws/danWND
Prichard Appointed First Vice President - Philadelphia Fed
Press Release
The Federal Reserve Bank of Philadelphia today announced the appointment of D. Blake Prichard to first vice president and chief operating officer, effective January 1, 2011. Prichard is currently the executive vice president responsible for Information Technology Services, Customer Relations, and Treasury and Payment Services. He also oversees the Federal Reserve System's Groupware Leadership Center, which provides national e-mail and related services. He will succeed William H. Stone, Jr., who announced his plans to retire earlier this year after serving as the Bank's first vice president for 23 of his 40 years of service.
http://jlne.ws/cWCbFQ
Fed Is Monitoring Mortgage Foreclosure Process
By Michael S. Derby, WSJ.com
The leader of the Federal Reserve Bank of New York addressed the ongoing saga of mortgage foreclosures, saying “the Federal Reserve actively encourages efforts to find viable alternatives to foreclosure, like loan modifications, or deeds in lieu.” But he added, “we also support due process and access to legal counsel for homeowners facing foreclosure, for instance through legal aid programs.”
http://jlne.ws/avYnWI
CFTC Proposes Swaps Reporting as Step Toward Position Limits
By Alan Bjerga and Asjylyn Loder, Bloomberg
The top U.S. commodities regulator today proposed a rule that will require traders to report over- the-counter swaps based on raw materials including oil and corn, a prelude to trading limits.
http://jlne.ws/bw1dSY
Fed’s Lockhart ‘Leaning In Favor’ of Action
By Michael S. Derby, WSJ.com
Another U.S. central bank official is giving support to the Federal Reserve embarking on a program of asset buying to help spur growth in a moribund U.S. economy.
http://jlne.ws/btpfQ1
Global News
Could the Bank of Canada be forced to cut rates again?
By Michael Babad, The Globe And Mail
Economists now believe Bank of Canada Governor Mark Carney won't raise interest rates again until well into next year. Since the recession's end, Mr. Carney has hiked his benchmark overnight rate three times, taking it from its emergency low to 1 per cent.
http://jlne.ws/acqCrM
Bond sales demonstrate stronger Asia links
By Robin Wigglesworth, FT.com
One of the more curious revelations in Dubai’s recent government bond prospectus was a previously unknown $1bn loan from China Construction Bank. Disclosure of the loan underlines the increasingly close ties between the Gulf states and Asia, a trend that is apparent in recent bond sales, where Asian investors have become markedly more significant.
http://jlne.ws/cCVED0
Brazil Hikes Tax On Incoming Fixed Income Investment To 6% -Estado
Dow Jones
Facing continued heavy flows of foreign currency, Brazil Monday raised its financial operations tax on incoming fixed-income investment for the second time in a month, and also hiked the tax on guarantees for derivatives operations, according to the Estado news agency.
http://jlne.ws/bu5xel
BOE Minutes Highlight Divide
BY NEIL SHAH, WSJ.com
Britain's central bankers are butting heads over whether to pump more cash into the economy to keep it from stalling amid conflicting signals on growth and inflation.
http://jlne.ws/cFs5vN
Bank of Canada sees slow growth
By Jeremy Torobin, the Globe And Mail
The Bank of Canada cut its growth forecast for five quarters starting with the July-September period and said the economy won’t be at full tilt until the end of 2012 as households work to trim their debt loads and the U.S. recovery remains sluggish.
http://jlne.ws/cneYao
Hedge Funds Seeking Distressed Assets May Turn to Japan, China, Australia
By Netty Ismail and Rishaad Salamat, Bloomberg
Hedge funds seeking distressed assets in Asia may find the best opportunities in Japan, China and Australia next year as banks sell soured loans, and small and medium-sized businesses struggle to attract funding.
http://jlne.ws/c2VuuI
China Abandons The Abacus
By Jacob Goldstein, NPR/ Planetmoney
China said today that it's raising interest rates by a quarter of a percentage point. That's a big deal. China hasn't raised interest rates since 2007, and the move is a sign of strength for China's economy. One interesting detail: It's the first time in modern history that China's central bank made an interest-rate move that wasn't a multiple of .09. "The reason is that on the abacus, adding multiples of nine was much easier than adding multiples of 10. So the modern People's Bank of China inherited that special character from the old days," an economist with Citigroup in Beijing told Reuters.
http://jlne.ws/b7J8uD
Finance Minister Lagarde Sees Significant Progress on Hedge Fund Rules
Bloomberg
French Finance Minister Christine Lagarde said European Union finance ministers made "significant progress" in agreeing to tougher hedge-fund and private-equity regulations.
http://jlne.ws/bsdrJZ
BOE Governor King Says Some U.K. Inflation Indicators `Extremely Subdued'
By Scott Hamilton and Jennifer Ryan, Bloomberg
Bank of England Governor Mervyn King said that some gauges of U.K. inflation are “extremely subdued,” signaling that he may be open to stepping up bond purchases. Officials are “conscious that the continuing high level of inflation poses the risk that inflation expectations may move up,” King said in a speech today in Dudley, England. Still, the danger that slack in the economy will push price-growth below the bank’s target is “at least as large.”
http://jlne.ws/9455q4
UBS names head executives of Brazil operations
San Francisco Chronicle
UBS AG said Monday it named Lywal Salles as chairman of UBS Group Brazil and Eduardo Centola as CEO of UBS Investment Bank in Brazil. Salles, 64, is the chairman of Banco Itau Europa...
http://jlne.ws/aYug1e
China's holdings of Treasury debt rises in August
Associated Press
China, the largest holder of U.S. Treasury debt, increased its holdings for a second straight month in August after two months of declines. China's holdings of Treasury securities rose to $868.4 billion in August, the Treasury Department reported Monday. That's up 2.6 percent and followed a smaller gain of 0.4 percent in July. China's holdings had fallen 2.8 percent in June and 3.6 percent in May.
http://jlne.ws/ajqV47
IMF Sees Strong Growth in Asia Continuing, Further Policy Tightening Needed
IMF Press Release No. 10/393
October 21, 2010
Asia remains firmly in the lead of the global economic recovery and strong growth in the region is set to continue, the International Monetary Fund (IMF) said today in its latest Regional Economic Outlook (REO) for Asia and the Pacific which was released in Jakarta, Indonesia. The expansion in Asia exceeded expectations in the first half of the year, the IMF said, prompting the Fund to revise up its 2010 growth forecast for the region to 8 percent, nearly 1 percentage point higher than its April forecast. Economies across the region are expanding strongly. China and India are leading the way with projected 2010 growth rates of 10.5 percent and 9.7 percent, respectively, while Indonesia is expected to grow by 6 percent. In Japan, growth is now projected at 2.8 percent. In 2011, regional growth is expected to moderate to a more sustainable pace of 6.8 percent.
See the full IMF report here:
Regional Economic Outlook: Asia and Pacific Consolidating the Recovery and Building Sustainable Growth
***CN: The IMF report concludes, in part, that re-balancing Asia’s growth remains the top policy priority over the medium term. With external demand from advanced economies unlikely to return to pre-crisis levels in the foreseeable future, Asia will need stronger domestic demand to continue along a robust growth path. A broad range of reforms are needed to support domestic consumption and investment, including strengthening social safety nets, ensuring access to credit, easing restrictions in service sectors and improving infrastructure, the IMF says.
Lead Stories
Geithner's Goal: Rebalanced World Economy
By DAMIAN PALETTA And DAVID WESSEL, WSJ.com
Treasury Secretary Timothy Geithner said he would use weekend meetings of G-20 finance ministers to advance efforts to "rebalance" the world economy so it is less reliant on U.S. consumers, to move toward establishing "norms" on exchange-rate policy, and to persuade others the U.S. doesn't aim to devalue its way to prosperity.
http://jlne.ws/dhk1kK
Fannie, Freddie could need $363 billion, FHFA says
By Steve Goldstein, MarketWatch
The Federal Housing Finance Agency on Thursday released projections of the financial performance of Fannie Mae and Freddie Mac and estimated they could draw between $221 billion to $363 billion from the government under the preferred stock purchase agreements. To date, the firms have drawn $148 billion. The projected credit losses in each scenario primarily reflect possible further losses on the enterprises' pre-conservatorship mortgage business
http://jlne.ws/9GCUlw
Americans Aren't Saving Enough for Retirement, Study Finds
By CATHERINE RAMPELL, The New York Times
The typical middle-age American is saving far too little for retirement, and the Employee Benefit Research Institute has estimated the shortfall: an average of $47,732 per individual over the course of that person’s retirement.
http://jlne.ws/d5gjWc
Japan’s Toxic Cocktail Fails U.S. Taste Test: Caroline Baum
By Caroline Baum, Bloomberg
Japan is an old country, and I’m not talking about the place. Twenty percent of the population is 65 or older, putting Japan in first place, in a tie with Italy, in the geriatric country competition, according to the Stanford Center on Longevity.
http://jlne.ws/daSSiq
G20 to mull current account targets: U.S. aide
By Greg Robb, MarketWatch
Finance ministers and central bank governors of the Group of 20 nations will discuss setting targets for current account deficits at their meeting in South Korea this weekend, a senior U.S. Treasury official said Wednesday.
http://jlne.ws/cHQn80
Bernanke Makes Case for Further Fed Moves to Boost Economy
By JON HILSENRATH, WSJ.com
Federal Reserve Chairman Ben Bernanke made a case for new steps by the central bank to boost economic growth, saying inflation was running below the Fed's objective of 2% and that the economy was on a course to grow too slowly to reduce unemployment.
http://jlne.ws/aqjSZt
US Treasury seeks advice on adding 5-yr, 30-yr TIPS
Reuters
The U.S. Treasury signaled on Friday it may add more inflation-indexed notes to its auction calendar, asking government bond dealers their views on a second quarterly reopening for 5-year and 30-year Treasury Inflation Protected Securities (TIPS).
http://jlne.ws/9bU2Zv
***CN: An opportunity to be heard, government bond dealers.
Cost of bank reform could explode: Deutsche Bank CEO
By Steve Slater, Reuters
The economic cost of tougher global capital rules for banks could explode if further requirements on big banks are not co-ordinated, Deutsche Bank (DBKGn.DE) chief executive Josef Ackermann said.
http://jlne.ws/aBMRRr
B of A pressured to buy back bad mortgages
By Wallace Witkowski, MarketWatch
A bondholders' group is seeking to force Bank of America Corp. to buy back some $47 billion in bad mortgages packaged by Countrywide Financial Corp., according to a published report Tuesday. Bloomberg News, citing unnamed people familiar with the matter, reported that Pacific Investment Management Co., BlackRock Inc., and the Federal Reserve Bank of New York wrote to Bank of America and Bank of New York Mellon Corp., the debt's trustee, faulting Countrywide for not servicing the loans properly.
http://jlne.ws/9d3epe
Pimco, NY Fed Said to Seek BofA Repurchase of Mortgages
By Jody Shenn, Bloomberg
Pacific Investment Management Co., BlackRock Inc. and the Federal Reserve Bank of New York are seeking to force Bank of America Corp. to repurchase soured mortgages packaged into $47 billion of bonds by its Countrywide Financial Corp. unit, people familiar with the matter said.
http://jlne.ws/dfaHUg
Osborne: Bank levy to be permanent
BBC
A levy on bank balance sheets will be made permanent, potentially raising billions of pounds, Chancellor George Osborne has confirmed. The chancellor said he would introduce legislation on Thursday in order "to extract the maximum sustainable tax revenues from financial services."
http://jlne.ws/9ejhbI
Buffett Raises Stake in Munich Re
BY WILLIAM LAUNDER AND ERIK HOLM, WSJ.com
German reinsurer Munich Re said billionaire investor Warren Buffett continues to increase his stake in the company and that he plans to raise the holdings further over the next year.
http://jlne.ws/bpdHR3
China Raises Interest Rates
By ANDREW BATSON, WSJ.com
China raised interest rates for the first time since emerging from the financial crisis, in a surprise move that highlights the widening gap in the world economy between economically vibrant developing countries and the rich nations trying to fend off stagnation.
http://jlne.ws/copgpn
Officials Hint Fed on the Verge of More Easing
By Mark Felsenthal and Pedro da Costa, Reuters
A string of Federal Reserve officials on Tuesday indicated the central bank will soon offer further monetary stimulus to the economy, with one saying $100 billion a month in bond buys may be appropriate.
http://jlne.ws/dx0XF4
Bondholders Pick a Fight With Banks
By RUTH SIMON, WSJ.com
As banks restart foreclosures they had suspended, bondholders are stepping up efforts to recoup losses on soured mortgage portfolios amid concern about sloppy mortgage servicing and underwriting practices.
http://jlne.ws/cZjmb4
Basel III to ease in new bank liquidity rules
Reuters
Global banking supervisors agreed on Tuesday to phase in the introduction of a key new global standard on lenders' minimum short-term funding cover, handing further relief to a sector facing a hefty funding gap.
http://jlne.ws/dtcUqQ
Former Citadel trader fined $1.1 million
Chicago Tribune
Mikhail 'Misha' Malyshev ordered to pay fine to 2 charities after violating judge's order to preserve potential evidence in lawsuit
A former executive of hedge fund manager Citadel Investment Group LLC recently gave about $1.1 million to two Chicago charities, but the payments were not an act of good will.
http://jlne.ws/dybm3i
Memory of 1995 Treasuries Rally Spurs Debt Before November U.S. Election
Bloomberg
Bond investors are looking back to the last time a Democratic president lost control of Congress and concluding, like then, that gridlock in Washington is good news for Treasuries.
http://jlne.ws/dgTX7r
Events
Mortgage Foreclosures and the Future of Housing Finance
When: Oct. 25-26, 2010
Where: L. William Seidman Center, Arlington, VA
Full info: http://www.chicagofed.org/webpages/events/2010/frbc_fdic_mortgage_foreclosure.cfm#
Details: The Federal Reserve System and the Federal Deposit Insurance Corporation (FDIC) are co-hosting a two-day conference highlighting policy-oriented research focused on U.S. housing and mortgage markets. The conference will emphasize two major issues: mortgage foreclosures and the future of housing finance. We will evaluate the current foreclosure situation, emphasizing the adverse neighborhood spillover effects and evaluations of efforts to mitigate foreclosures including loan modification efforts. We will also take a broader perspective and evaluate the future of housing finance. This will include an evaluation of the mortgage interest tax deduction, affordable housing issues, the future role of government-sponsored entities, the future of private-label mortgage securitization, the viability and role of private mortgage insurance, and the role of the Community Reinvestment Act.
Greece is Changing
Hellenic Observatory 11th Annual Lecture in association with APCO worldwide
When: Nov. 8, 2010
Where: LSE Campus
Full info: http://www2.lse.ac.uk/publicEvents/events/2010/20101108t1830vLSE.aspx
Details: The Greek sovereign debt crisis of 2010 has received world-wide attention and has elicited unprecedented action by the European Union and its member governments as well as by the IMF. Greece is now obliged to follow the terms of the 'Memorandum' agreed with the 'bail-out' loan it has received. Is Greek economic policy on track? What are its future prospects?
Deutsche Bank Annual Financial Technology Senior Executive Forum
When: Nov. 9-10, 2010
Where: The Pierre in New York
Full info: http://conferences.db.com/americas/fintech10/
Details: Participants will include prominent figures from exchange, FCM / Inter-dealer broker, trading technology, merchant acquiring, payment processing, prepaid, information provider, and financial software companies. Through a series of interactive panels, these senior business leaders will explore the challenges and opportunities as they expand into new markets, face increasing global competition, and respond to an ever-changing regulatory environment.
For context, this is not a research analyst conference but rather, a forum that organized to engage senior executives in industry-related discussions. This forum is also an excellent networking opportunity as the individuals who attend are decision-makers within their organizations. Similar to last year, this year's forum will feature panel discussions comprised of senior executives and board members from a variety of industry sub-sectors.
***CN: Note, Deutsche Bank reserves the right to determine which attendees have priority for admission.
Economic News
Housing Starts Rise to Five-Month High in Sign of Stabilization
By Bob Willis, Bloomberg
Builders in the U.S. unexpectedly began work on more homes in September, a sign the real estate market was stabilizing at depressed levels heading into the recent upheaval in the foreclosure crisis.
http://jlne.ws/chRo0z
Production in U.S. Unexpectedly Falls for First Time in a Year
Bloomberg
Production in the U.S. unexpectedly dropped in September for the first time in more than a year, evidence of the slowdown in growth that is concerning some Federal Reserve policy makers.
http://jlne.ws/bkun8b
U.S. Workers' Compensation Claims Decline in 2009 as Unemployment Lingers
Bloomberg
Workers’ compensation claims declined last year, extending a slide that began in 1991, as improving job conditions and higher unemployment reduced accident frequency, preliminary insurance-industry data show.
http://jlne.ws/c1FBeD
Sept. leading economic index climbs 0.3%
By Steve Goldstein, MarketWatch
U.S. economic growth is "slow" and doesn't have momentum, the Conference Board said Thursday as it reported that its leading economic index rose 0.3% in September. The leading economic index - a weighted gauge of ten separate indicators - rose as economists polled by MarketWatch had anticipated. The six-month change has slowed to 0.8% from 5.1%. The index for August was revised lower to 0.1%, from the 0.3% rise initially reported, and the July index was revised higher to 0.2%, from the 0.1% rise initially reported.
http://jlne.ws/9lL1NW
Jobless claims fall, but still stuck
By Hibah Yousuf, CNNMoney.com
The number of Americans filing for first-time unemployment benefits fell last week, but continued to drift in the same range they have been for about a year, signaling ongoing weakness in the labor market.
http://jlne.ws/9TPzfS
Exchanges, Clearing Houses & MTFs
Micex Eases Investor Rules to Double Bond Market: Russia Credit
By Emma O’Brien, Bloomberg
Russia is seeking to lure buyers for a record amount of debt sales by easing foreign investor restrictions and offering futures on government bonds for the first time.
http://jlne.ws/do2J0O
***CN: Bold move on the part of Micex.
Nasdaq's IDCG Broadens Swap-Clearing Service As Business Rises
By Jacob Bunge, Of DOW JONES NEWSWIRES
A derivatives clearing venture backed by Nasdaq OMX Group Inc. (NDAQ) has broadened the way it handles customers' swap transactions as the still-small platform gathers business. The International Derivatives Clearing Group, or IDCG, in recent weeks has moved to allow customers to back up interest-rate swap transactions in their existing form, alongside an existing service that converts swap deals to futures contracts, according to the company's chief executive.
http://jlne.ws/9JERBv
CME Group Begins Interest-Rate Swap Clearing Service
By JACOB BUNGE, WSJ.com
CME Group Inc. on Monday rolled out a new service that will handle over-the-counter derivatives transactions tied to fluctuations in global interest rates.
http://jlne.ws/92RTes
CME Group Begins Clearing OTC Interest Rate Swaps
Press Release
CME Group, the world's leading and most diverse derivatives marketplace, announced today that it has begun clearing over-the-counter (OTC) interest rate swaps through CME Clearing.
http://jlne.ws/aKXl27
CME Group wants facelift for credit default swaps
Reuters
CME Group Inc. will try to revamp its languishing credit default swaps clearing service, which has been all but eclipsed by rival clearinghouse operator IntercontinentalExchange Inc., a CME executive said on Monday.
Crain's Chicago Business
http://jlne.ws/9sxAJm
Citi Clears First Interest Rate Swap Trades for Clients on Chicago Mercantile Exchange
Press Release
Citi, a global leader in central clearing, announced today that it has cleared its first client trades through the Chicago Mercantile Exchange (CME) on the CME’s newly launched interest rate swap clearing platform. The trades executed through CME reflect Citi’s commitment to a consolidated, global and platform-agnostic approach to central clearing. In addition to CME, Citi currently clears interest rate swap trades for clients through LCH.Clearnet’s Swapclear service.
http://jlne.ws/bODNdv
Firms & Banks
Big Banks May Escape Capital Surcharge as Global Talks Founder
Bloomberg
Leaders of the world’s largest economies, divided over how to curb risk-taking by their biggest banks, will likely fail to agree on a capital surcharge.
http://jlne.ws/aJumaf
UBS in Talks With Dozens of Prop Traders Mulling Hedge Funds
Bloomberg
UBS AG the largest Swiss bank, said it has been in talks with “dozens” of proprietary traders from firms worldwide who may start their own hedge funds as banks seek to comply with new U.S. rules aimed at curbing risk.
http://jlne.ws/bt0McK
Wells Fargo Reports Record Earnings
BY MARSHALL ECKBLAD, WSJ.com
Wells Fargo & Co. harnessed a surge in mortgage originations in the third quarter to post record earnings, even as new regulations and a soft economy hurt other revenue, such as overdraft fees and interest income.
http://jlne.ws/bABAIG
Goldman Sachs Profit Beats Estimates as Expenses Drop
By Christine Harper, Bloomberg
Goldman Sachs Group Inc., the biggest securities firm by revenue, said profit dropped 40 percent, beating analysts’ estimates, as lower costs and higher investment-banking revenue cushioned a decline in trading.
http://jlne.ws/9KpupS
Guy Hands Testifies in Case Against Citigroup
The New York Times
Guy Hands, the charismatic British financier, took the witness stand on Tuesday before a packed federal courtroom in Lower Manhattan to pursue his fight with Citigroup. Mr. Hands’s private-equity firm, Terra Firma Capital Partners, has sued the bank over its failed buyout of the EMI Group, accusing Citigroup of lying to him about the presence of another bidder during the auction of the music company.
http://jlne.ws/bNed9a
Citigroup to Have 1.5B Shares Sold Off by Treasury
ThirdAge
Citigroup is preparing for a large sale of shares by the U.S. Treasury after the government agency said Tuesday it was preparing to sell 1.5 billion shares of common stock out of its holdings of 3.5 billion shares.
http://jlne.ws/cwlynM
Goldman Sachs Cuts Compensation Pool to $370,706 per Employee
By Christine Harper and Michael J. Moore, Bloomberg
Goldman Sachs Group Inc. set aside $13.1 billion for compensation and benefits in the first nine months of the year, down 21 percent from a year earlier, as revenue fell 14 percent.
http://jlne.ws/c0pfJW
Morgan Stanley Said to Get Nod to Sell C.I.C.C.
New York Times
Morgan Stanley has obtained regulatory approval for its planned sale of a 34.3 percent stake in Chinese investment bank China International Capital Corp , state media reported on Tuesday, according to Reuters.
http://jlne.ws/btcQvW
Goldman Pushes Its Image Rehab
By LIZ RAPPAPORT, WSJ.com
Goldman Sachs Group Inc. is taking its first steps to change the way it does business after it weathered harsh criticism and paid a $550 million fine tied to its actions before and during the financial crisis.
http://jlne.ws/98UNdN
Auctions & Statistics
Treasury to Offer $25B 56-Day Cash Management Bill
By Gary Siegel, The Bond Buyer
The Treasury Department said it will auction $25 billion 56-day cash management bills on Wednesday, October 20.
http://jlne.ws/aZJ48w
Regulations
FSB Seeks to Reduce Reliance on Rating Agencies
BY NATASHA BRERETON, WSJ.com
Financial Stability Board Chairman Mario Draghi said the body's members have endorsed principles to reduce the excessive reliance by governments and financial institutions on credit-rating agencies.
http://jlne.ws/cox1xd
Commodity Futures Trading Commission judge says colleague biased against complainants
The Washington Post
As George H. Painter was preparing to retire recently as one of two administrative law judges presiding over investor complaints at the Commodity Futures Trading Commission, he issued an extraordinary request: Please don't assign my pending cases to the other judge.
http://jlne.ws/a45q8o
Rubin Says U.S. Should Focus on Deficit, Not More Stimulus
By James Sterngold, Bloomberg
U.S. policy makers should focus on deficit reduction rather than an economic-stimulus package or additional bond purchases by the Federal Reserve, former Treasury Secretary Robert Rubin said.
http://jlne.ws/danWND
Prichard Appointed First Vice President - Philadelphia Fed
Press Release
The Federal Reserve Bank of Philadelphia today announced the appointment of D. Blake Prichard to first vice president and chief operating officer, effective January 1, 2011. Prichard is currently the executive vice president responsible for Information Technology Services, Customer Relations, and Treasury and Payment Services. He also oversees the Federal Reserve System's Groupware Leadership Center, which provides national e-mail and related services. He will succeed William H. Stone, Jr., who announced his plans to retire earlier this year after serving as the Bank's first vice president for 23 of his 40 years of service.
http://jlne.ws/cWCbFQ
Fed Is Monitoring Mortgage Foreclosure Process
By Michael S. Derby, WSJ.com
The leader of the Federal Reserve Bank of New York addressed the ongoing saga of mortgage foreclosures, saying “the Federal Reserve actively encourages efforts to find viable alternatives to foreclosure, like loan modifications, or deeds in lieu.” But he added, “we also support due process and access to legal counsel for homeowners facing foreclosure, for instance through legal aid programs.”
http://jlne.ws/avYnWI
CFTC Proposes Swaps Reporting as Step Toward Position Limits
By Alan Bjerga and Asjylyn Loder, Bloomberg
The top U.S. commodities regulator today proposed a rule that will require traders to report over- the-counter swaps based on raw materials including oil and corn, a prelude to trading limits.
http://jlne.ws/bw1dSY
Fed’s Lockhart ‘Leaning In Favor’ of Action
By Michael S. Derby, WSJ.com
Another U.S. central bank official is giving support to the Federal Reserve embarking on a program of asset buying to help spur growth in a moribund U.S. economy.
http://jlne.ws/btpfQ1
Global News
Could the Bank of Canada be forced to cut rates again?
By Michael Babad, The Globe And Mail
Economists now believe Bank of Canada Governor Mark Carney won't raise interest rates again until well into next year. Since the recession's end, Mr. Carney has hiked his benchmark overnight rate three times, taking it from its emergency low to 1 per cent.
http://jlne.ws/acqCrM
Bond sales demonstrate stronger Asia links
By Robin Wigglesworth, FT.com
One of the more curious revelations in Dubai’s recent government bond prospectus was a previously unknown $1bn loan from China Construction Bank. Disclosure of the loan underlines the increasingly close ties between the Gulf states and Asia, a trend that is apparent in recent bond sales, where Asian investors have become markedly more significant.
http://jlne.ws/cCVED0
Brazil Hikes Tax On Incoming Fixed Income Investment To 6% -Estado
Dow Jones
Facing continued heavy flows of foreign currency, Brazil Monday raised its financial operations tax on incoming fixed-income investment for the second time in a month, and also hiked the tax on guarantees for derivatives operations, according to the Estado news agency.
http://jlne.ws/bu5xel
BOE Minutes Highlight Divide
BY NEIL SHAH, WSJ.com
Britain's central bankers are butting heads over whether to pump more cash into the economy to keep it from stalling amid conflicting signals on growth and inflation.
http://jlne.ws/cFs5vN
Bank of Canada sees slow growth
By Jeremy Torobin, the Globe And Mail
The Bank of Canada cut its growth forecast for five quarters starting with the July-September period and said the economy won’t be at full tilt until the end of 2012 as households work to trim their debt loads and the U.S. recovery remains sluggish.
http://jlne.ws/cneYao
Hedge Funds Seeking Distressed Assets May Turn to Japan, China, Australia
By Netty Ismail and Rishaad Salamat, Bloomberg
Hedge funds seeking distressed assets in Asia may find the best opportunities in Japan, China and Australia next year as banks sell soured loans, and small and medium-sized businesses struggle to attract funding.
http://jlne.ws/c2VuuI
China Abandons The Abacus
By Jacob Goldstein, NPR/ Planetmoney
China said today that it's raising interest rates by a quarter of a percentage point. That's a big deal. China hasn't raised interest rates since 2007, and the move is a sign of strength for China's economy. One interesting detail: It's the first time in modern history that China's central bank made an interest-rate move that wasn't a multiple of .09. "The reason is that on the abacus, adding multiples of nine was much easier than adding multiples of 10. So the modern People's Bank of China inherited that special character from the old days," an economist with Citigroup in Beijing told Reuters.
http://jlne.ws/b7J8uD
Finance Minister Lagarde Sees Significant Progress on Hedge Fund Rules
Bloomberg
French Finance Minister Christine Lagarde said European Union finance ministers made "significant progress" in agreeing to tougher hedge-fund and private-equity regulations.
http://jlne.ws/bsdrJZ
BOE Governor King Says Some U.K. Inflation Indicators `Extremely Subdued'
By Scott Hamilton and Jennifer Ryan, Bloomberg
Bank of England Governor Mervyn King said that some gauges of U.K. inflation are “extremely subdued,” signaling that he may be open to stepping up bond purchases. Officials are “conscious that the continuing high level of inflation poses the risk that inflation expectations may move up,” King said in a speech today in Dudley, England. Still, the danger that slack in the economy will push price-growth below the bank’s target is “at least as large.”
http://jlne.ws/9455q4
UBS names head executives of Brazil operations
San Francisco Chronicle
UBS AG said Monday it named Lywal Salles as chairman of UBS Group Brazil and Eduardo Centola as CEO of UBS Investment Bank in Brazil. Salles, 64, is the chairman of Banco Itau Europa...
http://jlne.ws/aYug1e
China's holdings of Treasury debt rises in August
Associated Press
China, the largest holder of U.S. Treasury debt, increased its holdings for a second straight month in August after two months of declines. China's holdings of Treasury securities rose to $868.4 billion in August, the Treasury Department reported Monday. That's up 2.6 percent and followed a smaller gain of 0.4 percent in July. China's holdings had fallen 2.8 percent in June and 3.6 percent in May.
http://jlne.ws/ajqV47
Rabu, 20 Oktober 2010
Top Interest Rate Headlines 10-20-10: G20 to mull current account targets: U.S. aide
G20 to mull current account targets: U.S. aide
By Greg Robb, MarketWatch
Finance ministers and central bank governors of the Group of 20 nations will discuss setting targets for current account deficits at their meeting in South Korea this weekend, a senior U.S. Treasury official said Wednesday.
http://jlne.ws/cHQn80
Bond sales demonstrate stronger Asia links
By Robin Wigglesworth, FT.com
One of the more curious revelations in Dubai’s recent government bond prospectus was a previously unknown $1bn loan from China Construction Bank. Disclosure of the loan underlines the increasingly close ties between the Gulf states and Asia, a trend that is apparent in recent bond sales, where Asian investors have become markedly more significant.
http://jlne.ws/cCVED0
FSB Seeks to Reduce Reliance on Rating Agencies
BY NATASHA BRERETON, WSJ.com
Financial Stability Board Chairman Mario Draghi said the body's members have endorsed principles to reduce the excessive reliance by governments and financial institutions on credit-rating agencies.
http://jlne.ws/cox1xd
Wells Fargo Reports Record Earnings
BY MARSHALL ECKBLAD, WSJ.com
Wells Fargo & Co. harnessed a surge in mortgage originations in the third quarter to post record earnings, even as new regulations and a soft economy hurt other revenue, such as overdraft fees and interest income.
http://jlne.ws/bABAIG
Why China resists currency reform
The chorus of voices criticizing China's stubborn resistance to reforming its controversial currency regime and allowing the yuan to appreciate keeps getting louder. Outrage in Washington has been growing, the European Union recently called on China to let the yuan rise, and even officials in usually polite Japan spoke out against China's stance last week. China is sure to take a diplomatic beating at the G20 summit in Seoul in November.
http://jlne.ws/cJtre2
Osborne: Bank levy to be permanent
A levy on bank balance sheets will be made permanent, potentially raising billions of pounds, Chancellor George Osborne has confirmed. The chancellor said he would introduce legislation on Thursday in order "to extract the maximum sustainable tax revenues from financial services."
http://jlne.ws/9ejhbI
BOE Minutes Highlight Divide
BY NEIL SHAH, WSJ.com
Britain's central bankers are butting heads over whether to pump more cash into the economy to keep it from stalling amid conflicting signals on growth and inflation.
http://jlne.ws/cFs5vN
Bank of Canada sees slow growth
By Jeremy Torobin, the Globe And Mail
The Bank of Canada cut its growth forecast for five quarters starting with the July-September period and said the economy won’t be at full tilt until the end of 2012 as households work to trim their debt loads and the U.S. recovery remains sluggish.
http://jlne.ws/cneYao
Commodity Futures Trading Commission judge says colleague biased against complainants
As George H. Painter was preparing to retire recently as one of two administrative law judges presiding over investor complaints at the Commodity Futures Trading Commission, he issued an extraordinary request: Please don't assign my pending cases to the other judge.
http://jlne.ws/a45q8o
By Greg Robb, MarketWatch
Finance ministers and central bank governors of the Group of 20 nations will discuss setting targets for current account deficits at their meeting in South Korea this weekend, a senior U.S. Treasury official said Wednesday.
http://jlne.ws/cHQn80
Bond sales demonstrate stronger Asia links
By Robin Wigglesworth, FT.com
One of the more curious revelations in Dubai’s recent government bond prospectus was a previously unknown $1bn loan from China Construction Bank. Disclosure of the loan underlines the increasingly close ties between the Gulf states and Asia, a trend that is apparent in recent bond sales, where Asian investors have become markedly more significant.
http://jlne.ws/cCVED0
FSB Seeks to Reduce Reliance on Rating Agencies
BY NATASHA BRERETON, WSJ.com
Financial Stability Board Chairman Mario Draghi said the body's members have endorsed principles to reduce the excessive reliance by governments and financial institutions on credit-rating agencies.
http://jlne.ws/cox1xd
Wells Fargo Reports Record Earnings
BY MARSHALL ECKBLAD, WSJ.com
Wells Fargo & Co. harnessed a surge in mortgage originations in the third quarter to post record earnings, even as new regulations and a soft economy hurt other revenue, such as overdraft fees and interest income.
http://jlne.ws/bABAIG
Why China resists currency reform
The chorus of voices criticizing China's stubborn resistance to reforming its controversial currency regime and allowing the yuan to appreciate keeps getting louder. Outrage in Washington has been growing, the European Union recently called on China to let the yuan rise, and even officials in usually polite Japan spoke out against China's stance last week. China is sure to take a diplomatic beating at the G20 summit in Seoul in November.
http://jlne.ws/cJtre2
Osborne: Bank levy to be permanent
A levy on bank balance sheets will be made permanent, potentially raising billions of pounds, Chancellor George Osborne has confirmed. The chancellor said he would introduce legislation on Thursday in order "to extract the maximum sustainable tax revenues from financial services."
http://jlne.ws/9ejhbI
BOE Minutes Highlight Divide
BY NEIL SHAH, WSJ.com
Britain's central bankers are butting heads over whether to pump more cash into the economy to keep it from stalling amid conflicting signals on growth and inflation.
http://jlne.ws/cFs5vN
Bank of Canada sees slow growth
By Jeremy Torobin, the Globe And Mail
The Bank of Canada cut its growth forecast for five quarters starting with the July-September period and said the economy won’t be at full tilt until the end of 2012 as households work to trim their debt loads and the U.S. recovery remains sluggish.
http://jlne.ws/cneYao
Commodity Futures Trading Commission judge says colleague biased against complainants
As George H. Painter was preparing to retire recently as one of two administrative law judges presiding over investor complaints at the Commodity Futures Trading Commission, he issued an extraordinary request: Please don't assign my pending cases to the other judge.
http://jlne.ws/a45q8o
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