The rule, named after former Federal Reserve Chairman Paul Volcker, was included in the 2010 Dodd-Frank Act in an effort to restrict risky trading at banks that operate with federal guarantees. Five U.S. regulators released the 298-page proposal seeking comment on how it would affect market-making, liquidity, foreign institutions and private equity and hedge fund investments.
Volcker, 84, defended the rule in his own letter yesterday, challenging banks’ arguments that the rule would hurt markets.
“The recent years of financial crisis have seen spectacular trading losses in large commercial and investment banks here and abroad,” Volcker said. “Consequently, the stability of important banks was jeopardized, contributing to a financial crisis of historic dimension.”
The Volcker Rule will push risk outside the US Federal envelope and make it the risk takers problem and not the taxpayers problem....
Social Justice: Current Affairs, Business, Politics, and all the reasons in the world to Thrive on Creative Discontent!
Showing posts with label bank bailout. Show all posts
Showing posts with label bank bailout. Show all posts
Tuesday, February 14, 2012
Thursday, December 15, 2011
When did size not matter??? (and what about that payroll tax cut extension; and American Jobs Act....)
The Federal Reserve may lend $1 trillion to central banks as Europe’s crisis roils markets and erodes confidence in the region’s lenders, Anthony Sanders, a George Mason University finance professor, told Congress.
Such a level would exceed the program’s peak of $586 billion reached in December 2008, when the subprime mortgage crisis in the U.S. spurred foreign banks to obtain emergency dollar funding. Under the so-called swap lines, the Fed lends dollars to foreign central banks so they can pass on the money to their local lenders.
The swaps program may “get to the $1 trillion level, or perhaps even higher,” said Sanders, a former director of mortgage-bond research at Deutsche Bank AG. (DBK) He spoke today before the U.S. House of Representatives Committee on Oversight and Government Reform’s subcommittee on financial-services bailouts, led by Patrick McHenry, a North Carolina Republican.
Loans on the swaps program jumped to $54.3 billion as of Dec. 14 from $2.3 billion a week earlier, Federal Reserve data show. Draws by the European Central Bank surged after the Fed on Nov. 30 announced it would cut rates on the program. The Federal Reserve’s overall balance sheet stands at $2.9 trillion.
Fed Chairman Ben S. Bernanke yesterday told a closed-door gathering of Republican senators that the Fed won’t provide more aid to European banks beyond the swap lines and the discount window -- another Fed program that provides emergency funds to U.S. banks, including U.S. branches of foreign banks.
Size Estimates
European financial companies led by Royal Bank of Scotland Plc were borrowing about $538 billion directly from the Fed when the central bank’s emergency loans to all banks peaked at $1.2 trillion on December 2008, according to a Bloomberg News examination of data released by the Fed under last year’s Dodd- Frank Act and earlier this year under court-upheld Freedom of Information Act requests.
The Fed hasn’t provided any estimates of how large the swap lines might get, said David Skidmore, a Fed spokesman. He declined to elaborate.
Such a level would exceed the program’s peak of $586 billion reached in December 2008, when the subprime mortgage crisis in the U.S. spurred foreign banks to obtain emergency dollar funding. Under the so-called swap lines, the Fed lends dollars to foreign central banks so they can pass on the money to their local lenders.
The swaps program may “get to the $1 trillion level, or perhaps even higher,” said Sanders, a former director of mortgage-bond research at Deutsche Bank AG. (DBK) He spoke today before the U.S. House of Representatives Committee on Oversight and Government Reform’s subcommittee on financial-services bailouts, led by Patrick McHenry, a North Carolina Republican.
Loans on the swaps program jumped to $54.3 billion as of Dec. 14 from $2.3 billion a week earlier, Federal Reserve data show. Draws by the European Central Bank surged after the Fed on Nov. 30 announced it would cut rates on the program. The Federal Reserve’s overall balance sheet stands at $2.9 trillion.
Fed Chairman Ben S. Bernanke yesterday told a closed-door gathering of Republican senators that the Fed won’t provide more aid to European banks beyond the swap lines and the discount window -- another Fed program that provides emergency funds to U.S. banks, including U.S. branches of foreign banks.
Size Estimates
European financial companies led by Royal Bank of Scotland Plc were borrowing about $538 billion directly from the Fed when the central bank’s emergency loans to all banks peaked at $1.2 trillion on December 2008, according to a Bloomberg News examination of data released by the Fed under last year’s Dodd- Frank Act and earlier this year under court-upheld Freedom of Information Act requests.
The Fed hasn’t provided any estimates of how large the swap lines might get, said David Skidmore, a Fed spokesman. He declined to elaborate.
Monday, November 28, 2011
neither reasonable, nor fair, nor adequate, nor in the public interest = Too big fail "yes" but not too BIG to be CONVICTED!!!
A judge on Monday rejected a proposed $285 million settlement between Citigroup Inc and the top U.S. market regulator over the sale of toxic mortgage debt and ordered a trial.
In a written opinion, Manhattan federal court judge Jed Rakoff said the proposed settlement was "neither reasonable, nor fair, nor adequate, nor in the public interest."
The rejection was not a surprise since the judge had made clear at a November 9 hearing that he had major problems with the proposal.
The U.S. Securities and Exchange Commission accused Citigroup of selling a $1 billion mortgage-linked collateralized debt obligation, Class V Funding III, in 2007 as the housing market was beginning to collapse, and then betting against the transaction.
One Citigroup employee, director Brian Stoker, was also charged by the SEC. He is contesting those charges.
Representatives of Citigroup and the SEC could not immediately be reached for comment.
The case is SEC v Citigroup Global Markets Inc, U.S. District Court, Southern District of New York, No. 11-07387.
In a written opinion, Manhattan federal court judge Jed Rakoff said the proposed settlement was "neither reasonable, nor fair, nor adequate, nor in the public interest."
The rejection was not a surprise since the judge had made clear at a November 9 hearing that he had major problems with the proposal.
The U.S. Securities and Exchange Commission accused Citigroup of selling a $1 billion mortgage-linked collateralized debt obligation, Class V Funding III, in 2007 as the housing market was beginning to collapse, and then betting against the transaction.
One Citigroup employee, director Brian Stoker, was also charged by the SEC. He is contesting those charges.
Representatives of Citigroup and the SEC could not immediately be reached for comment.
The case is SEC v Citigroup Global Markets Inc, U.S. District Court, Southern District of New York, No. 11-07387.
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