Keep Abreast: Latest Briefing or Article

It’s not over until it’s in the rules

Having passed the Dodd-Frank Act earlier this summer, the bill that aspires to reorder our financial universe in the wake of the most serious economic crisis in generations, Congress has moved on to other matters. Regulators are left to write the rules that will make financial reform a reality — or not — and are [...]

E-learning interactive graphic [also see navigation, below right]

Highlights of the US financial reform legislation

July 2010 OVERSIGHT A 10-member council of regulators led by the Treasury secretary would monitor threats to the financial system. It would decide which companies were so big or interconnected that their failures could upend the financial system. Those companies would be subject to tougher regulation. If such a company teetered, the government could liquidate [...]

Snippets

• 02 Sep. ECB statement: Based on its regular economic and monetary analyses, the Governing Council continues to view the current key ECB interest rates as appropriate. It therefore decided to leave the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility unchanged at 1.00%, 1.75% and 0.25% respectively. Considering all the new information and analyses which have become available since our meeting on 5 August 2010, we continue to expect price developments to remain moderate over the policy-relevant medium-term horizon, benefiting from low domestic price pressures. Recent economic data for the euro area have been stronger than expected, partly owing to temporary factors. (more...) #
• 02 Sep. Federal Reserve Bank of Dallas President Richard Fisher said Wednesday the recovery of the U.S. economy “will take quite some time,” and that improved regulatory and fiscal policies are needed in order to help the process. “We need to restore confidence,” he told reporters after giving a speech before the Greater Houston Partnership. “We are not the only one in the pilot house driving this ship, it has to be complemented…with fiscal and regulatory” policies that encourage business owners. He added that any possible new stimulus program should focus on generating jobs. (more...) #
• 02 Sep. Dick Fuld, the ex chief executive of Lehman Brothers argued at the Financial Crisis Inquiry Commission that his investment bank could and should have been saved. Two years since the collapse of Lehman roiled markets, Fuld mounted his most robust defence yet, accusing regulators in the  of pushing the bank into bankruptcy and failing to get a grip on the crisis early in 2008. He blamed fellow banks, including JPMorgan Chase, for demanding billions of dollars in cash collateral against credit provided to Lehman in the run-up to its bankruptcy filing in September 2008. He said Morgan Stanley and Goldman Sachs would have failed without state support. But the Fed hit back, saying it could not have provided funds to Lehman in the middle of a bank run when it did not expect to be repaid. #
• 01 Sep. The US Financial Crisis Inquiry Commission, is expected to report to the nation by Dec. 15 on the causes of the 2008 financial debacle. It is investigating 22 factors, including Asian savings, regulatory failings in the United States, executive pay and credit ratings. The commission hopes to produce a detailed report that will influence future policy making. It has held 12 days of hearings, interviewed more than 500 witnesses and pored over hundreds of thousands of pages of documents. (more...) #
• 31 Aug. China will continue to gradually relax restrictions on the use of the yuan, but changes in the currency's exchange rate won't resolve China's massive trade imbalance with the U.S., People's Bank of China Deputy Governor Hu Xiaolian said Tuesday. In an interview with The Wall Street Journal, Ms. Hu also said she believes the global economy will continue to recover—albeit slowly—and that she doesn't expect it to return to a state of recession. "The global economy is still recovering," Ms. Hu said. "Sure, there is some volatility but it won't double dip. But the recovery will be quite slow." #