25/01/2012 Sifma
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Morning Bell |
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Obama outlines plan to collect fees from banks to help refis
In his State of the Union address, President Barack Obama announced a plan to levy fees on major banks to help spur mortgage refinancing for struggling homeowners. "A small fee on the largest financial institutions will ensure that" a mortgage-refinancing plan "won't add to the deficit, and will give banks that were rescued by taxpayers a chance to repay a deficit of trust," the president said. Bloomberg Businessweek(1/25), American Banker (subscription required)(1/24)
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Industry News |
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Banks face regulatory changes and bleak economic outlook
Banks must deal with an onslaught of regulations and a dismal economic outlook. The situation is leading financial institutions to shrink. Financial Times(tiered subscription model)(1/24)
Fitch to disclose grading model for mortgage bonds
Fitch Ratings said it will reveal its grading model for home-loan bonds despite concerns that doing so might allow issuers to exploit vulnerabilities in the system. Meanwhile, Shellpoint Partners co-CEO Saul Sanders said the rating agencies hinder the private mortgage-bond market. Bloomberg(1/24)
Citigroup might further cut spending in securities unit
John Gerspach, chief financial officer at Citigroup, said the company will consider further spending cuts in its Securities and Banking division if revenue doesn't rebound this year. "We are not oblivious to the fact that our cost structure cannot be justified by our current revenue," Gerspach said. "While much of the current difficulty reflects market conditions, we equally have some management and execution challenges." Bloomberg(1/24)
BofA reportedly notifies investment bankers about pay cuts
Bank of America has pay discussions with investment bankers scheduled this week, but executives have already told the firm's investment bankers that their compensation packages will be about 25% less than last year, sources said. "Until things really come back, no one should be expecting compensation like they got in the past," said Jeanne Branthover, a managing director at Boyden Global Executive Search. "There are going to be very strong people who will not be compensated as they expected, and they will keep their ears open to move for more money." Bloomberg(1/24) |
More than 200 named managing directors at Morgan Stanley
Bloomberg (1/24)
Loreley Financing sues Citigroup over CDO fraud claims
Reuters (1/24)
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Washington Roundup |
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Sen. Corker blasts Volcker rule's government-bond exemption
Sen. Bob Corker, R-Tenn., questioned the proposed Volcker rule's exemption for government debt. "I don't know why trading in U.S. Treasurys would be different than buying a [General Electric bond?" he said. "If you bet the wrong way on a U.S. Treasury you can lose just as much money as trading a GE bond." Stanford professor Darrell Duffie released a study on the effect the proposed Volcker rulewould have on market-making. American Banker (subscription required)(1/24), MarketWatch(1/24), Bloomberg Businessweek(1/24)
Industry groups remain concerned about DOL's fiduciary request
SIFMA and other industry groups met with officials at the Department of Labor to discuss a request from the department for information related to a proposed fiduciary standard for brokers. The groups want seeking clarity on the request, but after the meeting they remained unsure about how much help they can offer, because of the difficulty of gathering the requested information. Learn more about a fiduciary standard. AdvisorOne.com(1/24)
FINRA to propose new rules for fixed income research
The Financial Industry Regulatory Authority plans to file new rules with the Securities and Exchange Commission to that deal with conflicts of interest in fixed-income research. Financial Times(tiered subscription model)(1/24)
OCC's Walsh warns about derivatives-market overhaul
John Walsh, acting comptroller of the currency, said regulators' efforts to revamp the global derivatives market risk a "vast overreaction." "Lack of understanding feeds misperception, and derivatives are not particularly well understood, even by some top policymakers," Walsh said. "I'm not trying to suggest that this isn't a big market or that it doesn't involve sizable risks, but the risk ascribed to derivatives is often many orders of magnitude greater than the reality." Bloomberg(1/24), Risk.net (subscription required)(1/25)
Fed official raises concerns about rate projects
Charles Plosser, president of the Federal Reserve Bank of Philadelphia, is concerned that the central bank's new policy of releasing forecasts about benchmark interest rates might cause some confusion. He said he is concerned some investors might consider the projections to be promises. Bloomberg(1/24)
Volcker rule should be reproposed, lawyer says
Reuters (1/24)
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