Archive for June, 2010
This article (Barclays (NYSE: BCS) Poaches Staff from Citigroup (NYSE: C), Credit Suisse (NYSE: CS), and Goldman Sachs (NYSE: GS)) was originally developed by and is property of American Banking News. Checkout American Banking News for up-to-date banking news and peer to peer lending news.
Tax Proposal Removed From Regulatory Reform
Posted by: | CommentsThe financial regulatory reform legislation has been amended (again). This time, the committee has agreed to remove the proposed $19 billion tax on the large banks. In addition, the Troubled Assets Relief Program (TARP) will be ended three months early.
Senators Scott Brown (R-Mass.) and Chuck Grassley (R-Iowa) had objected to the proposed tax that would have made the FDIC collect $19 billion from banks with more than $50 billion in total assets. To make up for this shortfall, $11 billion will be reallocated, which was saved by ending the TARP program early.
The TARP program, popularly referred to as the ‘bailouts’ began in October 2008, when nine large banks were forced by the Treasury department and regulators to accept government funds ‘for the good of the system’. In this program, Bank of America (NYSE: BAC) and Citigroup (NYSE: C) each received $45 billion, while Wells Fargo (NYSE: WFC) and JPMorgan Chase (NYSE: JPM) each received $25 billion.
Contrary to popular belief, all four have already fully paid bank these ‘bailout’ funds, with Citigroup as the lone exception, having $25 billion converted to common stock and re-paying $20 billion in cash. The Treasury department is in the process of selling those common shares.
Senators Brown and Grassley play an important role in the Restoring American Financial Stability Act of 2010, as they represent half of the Republican support of the Senate’s bill.
According to multiple reports, Senate Banking Committee Chairman Chris Dodd (D-Conn.) said he believed the modified bill would now have 60 votes in the Senate, although he also said “obviously, until they actually cast the vote you never know.” As Senator Byrd passed recently, the bill was in temporary jeopardy, but is believed to have since raised sufficient report to still push it through.
In a related item, it is expected that the Oversight Council for Systemic Risk would impose risk-based assessments on all financial companies, not just banks. The source commented: “The larger and more complex the entity, the higher potential for systemic risk, the more regulation and special assessments they will pay.” Though, the final details will likely not be nailed down for months, as the regulating agencies will have to make most of the tough decisions.
This article (Tax Proposal Removed From Regulatory Reform) was originally developed by and is property of American Banking News. Checkout American Banking News for up-to-date banking news and peer to peer lending news.
Spike in Failed Trades Forces Fed Back into MBS Market
Posted by: | CommentsPosted To: MBS Commentary
This week, the Federal Reserve Bank of New York Open Market Trading Desk began conducting a limited amount of agency mortgage-backed security (MBS) " coupon swap operations " in order to facilitate the timely settlement of agency MBS trades. A coupon swap is a transaction conducted at market prices that involves the sale of one agency MBS with the simultaneous agreement to purchase a different agency MBS. Coupon swaps allow the Federal Reserve to sell agency MBS coupons that are not readily available for settlement in the market and simultaneously purchase a different agency MBS coupon that is more readily available for settlement. The Federal Reserve uses coupon swaps as a tool to address temporary imbalances in market supply and demand. The New York Fed transacts agency coupon swaps…(read more)