Compliance

Market Players Push for Changes

Senate Banking Committee Chairman Chris Dodd's regulatory reform bill is generally winning praise for provisions giving the government more power to smoothly unwind a large, systemically important firm, but is also raising a host of practical concerns observers say could undermine its effectiveness.

Although the Pension Protection Act of 2006 has gone a long way toward addressing many of the issues plaguing the defined contribution system, a report from State Street Corp. said that more has to be done to ensure participants adequately save for retirement.

The House Financial Services Committee plans to probe the regulatory failures that led up to the collapse of Lehman Brothers after a bankruptcy examiner released a damning report last week on the investment bank’s accounting manipulations.

SIFMA and CMSA back Garrett's follow-up bill

Sen. Richard Shelby raised concerns with bankers on Thursday that "too big to fail" would survive if a proposed $50 billion fund to help unwind failing financial institutions remains in the Senate's latest regulatory reform bill.

Federal Deposit Insurance Corp. Chairman Sheila Bair opened the door Thursday to extending blanket deposit insurance coverage on business accounts, but disagreed with another regulator's push to count more loan-loss reserves as capital.

The unwinding of the Federal Reserve's liquidity programs is unlikely to boost the sickly yields on tax-free money market funds, participants say.

Redemption fees successfully protect mutual funds from short-term traders, whose churning can serious hurt fund performance, according to “Redemption Fees: Reward for Punishment,” authored by three researchers at Texas Tech University’s Division of Personal Financial Planning.

A Dutch pension fund is the latest in a string of lawsuits against the banking company.

In a move that surprised the industry Wednesday, the Financial Industry Regulatory Authority’s head of enforcement announced to her employees that she would step down.

But the organization remains strongly opposed to doing away with a steady net asset value, which is usually $1.00 per share, and is a fundamental feature of money market funds.

Federal Reserve Board Chairman Ben Bernanke offered a vigorous defense of his agency's oversight of holding companies and state banks, rejecting a Senate bill that would strip them of supervisory powers over all but the biggest institutions.

Preemption process would be complex, more burdensome

The latest regulatory reform proposal from Senate Banking Committee Chairman Chris Dodd would have far-reaching implications for day-to-day operations at most banks and thrifts, changing which regulators oversee them and potentially broadening the number considered systemically important.

Far from being the big winner under Senate Banking Committee Chairman Chris Dodd's regulatory reform bill, the Federal Reserve System would undergo radical changes — including a likely consolidation of its 12 district banks — if the legislation were enacted.

This year marks the 30th anniversary of the 401(k), the revolutionary retirement savings vehicle that has been annihilating pension plans, empowering individuals to take part in the stock market—and that left retirees with the misfortune of leaving the workforce in 2000 or 2008 badly off.

After one 2030 target-date fund lost 41% in 2008, legislators in Washington went up in arms against the fund category. One of the most controversial proposals would have limited equity exposure in such funds, but the industry fought back on the grounds the 40 Act gives asset managers leeway to determine asset allocation on their own.

But the direct-pay subsidy rate would shrink from the current 35% of interest costs to 33% in 2011, 31% in 2012 and 30% in 2013, under a draft of a second jobs bill unveiled yesterday by House Ways and Means Committee chairman Sander Levin, D-Mich.

Senate Banking Committee Chairman Chris Dodd on Monday released a broad outline of his regulatory reform bill, which heavily reflects input from Republicans who still say they oppose the bill.