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Supervision of trading desks worries SEC
April 28, 2010--The role played by Wall Street trading desks in selling complex financial securities such as the collateralised debt obligations at the heart of the case against Goldman Sachs has emerged as a key concern of US regulators.
Goldman was accused this month by the Securities and Exchange Commission of fraud for failing to disclose that a hedge fund influenced the composition of a CDO – known as Abacus – which it sold to investors. Goldman denies wrongdoing.
Reid Muoio, deputy chief of a new SEC enforcement unit looking into CDOs and other so-called structured products, told a legal seminar in New York this week that the executives creating these complex financial instruments should have been better supervised by Wall Street’s traditional “gatekeepers”, including lawyers and accountants.
Speech by Deputy Secretary Wolin to the Corporate Council on Africa
April 28, 2010--Good evening and thank you for that kind introduction, Steve. The work that the Council is doing to build business links between the United States and African countries is vital, and I appreciate the opportunity to address this group this evening.
When I spoke at CCA's U.S.-Africa Business Summit last September, we were still assessing the impact of the global economic crisis on Africa. Steep declines in commodity prices, the prospect of fewer remittances, and a drop in capital inflows threatened to undermine the nearly decade long economic expansion in sub-Saharan Africa. Leaders were bracing for a dramatic setback.
Six months later, some of these concerns have been borne out. The IMF estimates that Sub-Saharan Africa grew by only 2 percent in 2009 after averaging more than 5 percent for the last five years. Africa's three largest economies – South Africa, Nigeria and Angola – accounted for the bulk of the decline
US cities forced to consider bankruptcy
April 28, 2010--Council meetings in Harrisburg, the capital of Pennsylvania, have weighed issues ranging from snow removal and rubbish collection to a rise in dog fighting, but a meeting this week was particularly unusual. In a sign of the tough times, officials called in experts to discuss the pros and cons of going bankrupt.
“There is no good option,” Dan Miller, Harrisburg city controller, told the city’s administration committee. Mr Miller and some members of the committee advocated exploring bankruptcy as way to get out from under its debts. Other officials at the three-hour meeting worried about the ramifications
FOMC statement
April 28, 2010--Information received since the Federal Open Market Committee met in March suggests that economic activity has continued to strengthen and that the labor market is beginning to improve. Growth in household spending has picked up recently but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software has risen significantly; however, investment in nonresidential structures is declining and employers remain reluctant to add to payrolls. Housing starts have edged up but remain at a depressed level. While bank lending continues to contract, financial market conditions remain supportive of economic growth. Although the pace of economic recovery is likely to be moderate for a time, the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability.
With substantial resource slack continuing to restrain cost pressures and longer-term inflation expectations stable, inflation is likely to be subdued for some time.
The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period. The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to promote economic recovery and price stability.
KBW Announces Change to KBW Regional Banking Index (KRX)
April 28, 2010--Keefe, Bruyette & Woods, Inc., a full-service investment bank that specializes in the financial services sector, and a wholly owned subsidiary of KBW, Inc., today announces upcoming changes to the KBW Regional Banking Index (Index Symbol: KRX(SM), ETF Symbol: KRE(SM), KRS(SM), KRU(SM)).
Effective prior to the opening of business on Monday, May 3, 2010, Umpqua Holdings, a member of the KRX, will undergo an increase in shares to account for its recent equity issuance.
The KBW family of indices that has tradable exchange traded funds are: KBW Bank Index (Index Symbol: BKX(SM), ETF Symbol KBE(SM)); KBW Capital Markets Index (Index Symbol: KSX(SM), ETF Symbol KCE(SM)); KBW Insurance Index (Index Symbol: KIX(SM), ETF Symbol KIE(SM)); KBW Mortgage Finance Index (Index Symbol: MFX(SM), ETF Symbol: KME(SM)), and KBW Regional Banking Index (Index Symbol: KRX(SM), ETF Symbol: KRE(SM), KRS(SM), KRU(SM)).
U.S. International Reserve Position
April 28, 2010--The Treasury Department today released U.S. reserve assets data for the latest week. As indicated in this table, U.S. reserve assets totaled $127,224 million as of the end of that week, compared to $128,135 million as of the end of the prior week.
I. Official reserve assets and other foreign currency assets (approximate market value, in US millions)
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April 23, 2010 |
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A. Official reserve assets (in US millions unless otherwise specified) 1 |
Euro |
Yen |
Total |
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(1) Foreign currency reserves (in convertible foreign currencies) |
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127,224 |
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(a) Securities |
9,484 |
13,794 |
23,278 |
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of which: issuer headquartered in reporting country but located abroad |
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0 |
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(b) total currency and deposits with: |
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(i) other national central banks, BIS and IMF |
13,918 |
6,761 |
20,680 |
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ii) banks headquartered in the reporting country |
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0 |
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of which: located abroad |
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0 |
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(iii) banks headquartered outside the reporting country |
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0 |
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of which: located in the reporting country |
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0 |
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(2) IMF reserve position 2 |
11,557 |
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(3) SDRs 2 |
55,799 |
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(4) gold (including gold deposits and, if appropriate, gold swapped) 3 |
11,041 |
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--volume in millions of fine troy ounces |
261.499 |
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(5) other reserve assets (specify) |
4,869 |
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--financial derivatives |
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--loans to nonbank nonresidents |
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--other (foreign currency assets invested through reverse repurchase agreements) |
4,869 |
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B. Other foreign currency assets (specify) |
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--securities not included in official reserve assets |
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--deposits not included in official reserve assets |
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--loans not included in official reserve assets |
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--financial derivatives not included in official reserve assets |
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--gold not included in official reserve assets |
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--other |
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IDCG Announces New Products Eligible for Clearing
April 28, 2010--International Derivatives Clearing Group, LLC (IDCG), a majority owned, independently operated subsidiary of The NASDAQ OMX Group, Inc. (Nasdaq:NDAQ), today announced that it will be clearing the following over-the-counter (OTC) interest rate derivative products through its clearinghouse:
US Dollar Interest Rate Swap vs. 1 Month Floating Rate
US Dollar Forward Start Interest Rate Swap vs. 1 Month Floating Rate
US Dollar Overnight Index Swap (OIS)
* US Dollar 1 Month Forward Rate Agreement (FRA)
* US Dollar 3 Month Forward Rate Agreement (FRA)
"IDCG is committed to providing a rich suite of clearable OTC derivative products to the marketplace to meet end-user demand," said Garry O'Connor, Chief Executive Officer of IDCG.
The previous new product rollout for IDCG was in November 2009, when the clearinghouse announced the clearing of OTC US Dollar Forward Start Interest Rate Swaps vs. 3 Month floating rate. The clearinghouse has been clearing OTC US Dollar Interest Rate Swaps vs. 3 Month floating rate since it received its CFTC approval in December 2008.
"IDCG has always been committed to following CFTC guidelines and applying stringent risk management procedures and margining. The risk management of these new products will be no different," said Michael Dundon, IDCG's Chief Risk Officer.
Additional information about the new products and contract margining can be found at www.idcg.com.
House Republicans Ought to be Embarrassed about their Record on Fannie and Freddie
Failure is the only word to describe the House Republicans’ record on the GSEs
April 28, 2010--Rep. Spencer Bachus should know better. In a long op-ed in Politico, the Alabama Republican talks at length about the supposed Democratic failure to reform the GSEs, but apparently President Bush’s “ownership society” doesn’t apply to Republicans taking responsibility for their own failures. The Republican record on Fannie and Freddie is clear and embarrassing:
From 1995 to 2006 when the Republicans were in charge of Congress no bill to reform the GSEs passed Congress.
Republicans only held one vote in the House to regulate the GSEs—and the bill was opposed by President Bush.
Republicans in Congress did nothing when President Bush pushed Fannie and Freddie’s affordable housing goals to unsustainable levels.
While in the majority, Republicans never passed legislation to restrict subprime lending. Rep. Bachus actually once believed in restricting subprime lending, even negotiating and compromising with Democrats in 2007, but he did not support the 2009 effort.
Statement of Chairman Gary Gensler Before the Senate Committee on Appropriations, Subcommittee on Financial Services and General Government
April 28, 2010--Good afternoon Chairman Durbin, Ranking Member Collins and members of the Subcommittee. I am
pleased to testify on behalf of the Commodity Futures Trading Commission (CFTC), and I thank you
for the opportunity to discuss issues related to the Commission’s 2011 Budget.
In the fall of 2008, the financial system and the financial regulatory system failed. While more than a
year has passed and the system appears to have stabilized, we cannot relent in our mission to
vigorously implement our mandate to protect the public from fraud, manipulation and other abuses in
the commodity markets. I would like to express my gratitude to Congress for the recent increases in
appropriations that now permit the Commission to address longstanding regulatory and oversight
weaknesses. The CFTC, however, requires additional resources to hire staff with new competencies
and skill sets and to ensure our technological infrastructure and systems keep pace with the industry
we regulate. These improvements are essential to promoting transparency and integrity in the
marketplace. Only through strong, intelligent regulation can we fully protect the American people and
keep our economy strong.
CFTC Determines that Seven Contracts Traded on the IntercontinentalExchange Inc are Significant Price Discovery Contracts
Contracts are Subject to Commission Oversight, Emergency Authority and Large Trader Reporting Requirements
April 28, 2010--The Commodity Futures Trading Commission (CFTC) today determined, by a 5-0 vote, that seven contracts traded on the IntercontinentalExchange Inc (ICE) perform significant price discovery functions. As such, the contracts must be traded in compliance with applicable core principles and statutory provisions. The Commission considered a total of 24 contracts traded on three Exempt Commercial Markets (ECMs): ICE, the Natural Gas Exchange, Inc (NGX) and the Chicago Climate Exchange, Inc (CCX). The Commission determined that the other 17 contracts it reviewed were not SPDCs.
ECMs are exempt from the provisions of the Commodity Exchange Act, other than the anti-fraud and anti-manipulation provisions. However, Congress provided a regulatory regime for contracts traded on ECMs that the Commission determines to be significant price discovery contracts (SPDCs) comparable to that provided for futures contracts traded on designated contract markets.
Contracts the Commission determined to be SPDCs include:
BlackRock eyes growth in retirement market
April 27, 2010--BlackRock Inc. is seeking to grab a larger slice of the $2.7 trillion 401(k) retirement market by using its position as the world’s biggest manager of exchange-traded funds to win over small companies.
BlackRock is going after retirement plans with $50 million or less that have been largely ignored by big providers such as Fidelity Investments and Vanguard Group Inc. Investors in 401(k) plans have bought more than $2 billion of BlackRock’s iShares ETFs since the company began its push last year, said Darek Wojnar, head of iShares strategy and research.
Funds For The Prophets
''Jesus Saves'' is a beloved song among faithful Christians. But where would Jesus invest? Faith-based funds and ETFs may have the answer.
April 27, 2010--The number of faith-based mutual funds and exchange-traded funds (ETFs) has grown tremendously over the last few years. These funds make investments based on the principles and teachings of a religion.
Most faith-based ETFs and mutual funds (no matter what the religion) avoid companies that produce alcohol, tobacco and pornography. Some funds have a much longer list of banned investments, including companies engaged in producing and selling firearms, those in the oil industry, those related to gambling and, at times, banks. Some funds avoid companies with a corporate culture they find disagreeable.
Claymore files with SEC
April 27, 2010--Claymore has filed a registration statement with the SEC for
Claymore Shipping ETF
Ticker symbol: SEA
INVESTMENT OBJECTIVE
The Fund seeks investment results that correspond generally to the
performance, before the Fund's fees and expenses, of an equity index called the
Delta Global Shipping Index
Total annual Fund operating expenses-0.65%
iShares files with the SEC
April 27, 2010--iShares has filed a post-effective, registration statement with the SEC for
iShares MSCI Emerging Markets Small Cap Index Fund
read more
Deutsche Bank denies it faces any SEC charges
April 27, 2010--Deutsche Bank gave an unusually explicit denial that it knew of any potential charges from the US Securities and Exchange Commission as it tried to distance itself from fears that it could find itself in a similar position to Goldman Sachs, which faces fraud allegations.
Stefan Krause, chief financial officer, said Germany’s largest bank had not received a so-called Wells Notice – a notification from the SEC indicating evidence to support civil charges.
