“We have consistently questioned the necessity and efficacy of the Volcker Rule and believe that its full repeal is the only way to avoid the harm that it would do to the economy, bank customers, and the banking industry.”
Paul Volcker, former Federal Reserve Chairman and architect of the Volcker Rule, testified On October 17, 2012 before a joint British Parliamentary Commission on banking standards. He answered questions on the differences between the US and UK banking systems along with questions that focused specifically on America’s recent experiences with regulatory reform.
What does the exodus of senior officials at the SEC mean for the future of securities regulation? This month, the SEC announced that the agency’s chair, two division heads, and the general counsel and chief of staff will leave their posts. Though it is not unusual for political appointees, like the SEC chair and commissioners to end their tenures after a Presidential election, it is not typical that the senior staff does so.
On November 5, 2012, the Federal Reserve Board (the “Fed”) issued instructions and guidelines for two 2013 stress testing and capital planning programs. Based on similar programs instituted in 2012, the Comprehensive Capital Analysis and Review 2013 describes the processes for testing and development of capital plans that are required for the 19 bank holding companies (“BHCs”)that participated in the Comprehensive Capital Analysis and Review in 2011 and 2012.
Should we be alarmed about empty voting? According to a recent article, “A Call to Arms on Empty Voting!” by Andrew MacDougall, Robert M. Yalden and Jeremy Fraiberg, yes, we should indeed. Using a proxy battle over a proposal by Canadian company, TELUS to eliminate its dual class share structure earlier this year as an example, MacGougall, Yalden, and Fraiberg assert that as “the number of public M&A transactions increases, and if U.S. hedge funds continue to look for opportunities in Canada to engage in strategic gamesmanship, concerns about empty voting will also increase.”
In an address before the ALI Conference on Investment Adviser Regulation in New York City on December 6, 2012, Norm Champ, the new Director of the SEC’s Division of Investment, announced that the “Division staff will no longer defer consideration of exemptive requests under the Investment Company Act relating to actively managed ETFs that make use of derivatives.”
On July 6, House Financial Services Committee Chairman Spencer Bachus (R-AL) initiated a series of hearings reviewing the two-year experience of the Dodd-Frank Act, and in particular the effects of its derivatives provisions. Prompted by the June 28 release by the CFTC of proposed interpretive guidance regarding the application of the Dodd-Frank Act to non-US persons engaging in swaps activities with a connection to the US, Bachus also urged the Senate to pass legislation, HR 2682, codifying and clarifying the end-user exemption from Dodd-Frank derivatives regulation.
“Appropriate monitoring and regulatory frameworks for the shadow banking system needs to be in place to mitigate the build-up of risks.”
“Unlike other derivatives, FX swaps and forwards already trade in a highly-transparent, liquid and efficient market. This final determination is narrowly tailored.
The latest Federal Reserve Open Market Committee (“FMOC”) minutes reveal serious consideration of an approach to monetary policy whereby the Fed uses quantitative triggers based on unemployment rates and inflation, as opposed to date-based thresholds, to guide its changes in the federal funds rate.