Financial Regulation en-us Fri, 26 Dec 2014 21:08:26 -0500 Fri, 26 Dec 2014 21:08:26 -0500 The latest news on Financial Regulation from Business Insider Business Insider Nobody Should Shed A Tear For JP Morgan Chase Tue, 29 Oct 2013 15:41:00 -0400 Matt Taibbi <p><img style="float:right;" src="" border="0" alt="Jamie Dimon from Reuters" width="480" /></p><p>A lot of people all over the world are&nbsp;<a href="" target="_blank">having opinions now</a>&nbsp;about the ostensibly gigantic $13 billion settlement Jamie Dimon and JP Morgan Chase have entered into with the government.</p> <p>The general consensus from most observers in the finance sector is that this superficially high-dollar settlement &mdash; worth about half a year's profits for Chase &mdash; is an unconscionable Marxist appropriation. It's been called a "<a href="">robbery</a>" and a "shakedown," in which red Obama and his evil henchman Eric Holder confiscated cash from a successful bank, as&nbsp;<em>The Wall Street Journal&nbsp;</em>wrote, "for no other reason than because they can and because they want to appease their left-wing populist allies."</p> <p><strong>Look, there's no denying that this is a lot of money.</strong> It's the biggest settlement in the history of government settlements, and it's just one company to boot. But this has been in the works for a long time, and it's been in the works for a reason. This whole thing, lest anyone forget, has its genesis in a couple of state Attorneys General (including New York's Eric Schneiderman and Delaware's Beau Biden) not wanting to sign off on any deal with the banks that didn't also address the root causes of the crisis, in particular the mass fraud surrounding the sale and production of subprime mortgage securities.</p> <p>Those holdouts essentially forced the federal government's hand, leading Barack Obama to create a federal working group on residential mortgage-backed securities (widely seen as the AGs' price for okaying the $25 billion robosigning deal), headed up by Schneiderman, whose investigation of Chase and its affiliates led to the deal that's about to be struck. Minus all of that, minus those state holdouts in those foreclosure negotiations, this settlement probably would never even take place: The federal government seemed more than willing previously to settle with the banks without even addressing the root-cause issues that are at the heart of this new Chase deal.</p> <p>So let's not forget that &mdash; that even this $13 billion settlement, which is actually a $9 billion settlement (see below), came very close to never happening. But now it is happening, and the business press is going nuts about how unfair it all is.</p> <p>In fact, this deal is actually quite a gift to Chase. It sounds like a lot of money, but there are myriad deceptions behind the sensational headline.</p> <p><a href="" target="_blank" class="inStoryLink">Read Matt Taibbi's Feature on the Gangster Bankers Who Are Too Big to Jail</a></p> <p>First of all, the settlement, as the folks at&nbsp;<em>Better Markets&nbsp;</em>have&nbsp;<a href="" target="_blank">pointed out</a>, may wipe out between $100 billion and $200 billion in potential liability &mdash; meaning that the bank might just have settled "for ten cents or so on the dollar." The Federal Housing Finance Agency alone was suing Chase and its affiliates for $33 billion. The trustee in the ongoing Bernie Madoff Ponzi scandal was suing Chase for upwards of $19 billion.</p> <p>Obviously, those plaintiffs may never have gotten that kind of money out of Chase. But just settling the mere potential of so much liability has huge value for the bank. It's part of the reason the company's&nbsp;<a href="" target="_blank">share price</a>&nbsp;hasn't exactly cratered since the settlement was announced.</p> <p>Moreover, the settlement is only $9 billion in cash, with $4 billion earmarked for "mortgage relief." Again, as&nbsp;<em>Better Markets&nbsp;</em>noted, we've seen settlements with orders of mortgage relief before, and banks&nbsp;<a href="" target="_blank">seem to have many canny ways</a>&nbsp;of getting out of the spirit of these requirements.</p> <p>In the foreclosure settlement, most of the ordered "relief" eventually came in the form of short sales, with banks letting people sell their underwater houses and move out without paying for the loss in home value. That's better than nothing, but it's something very different than a bank working to help families stay in their homes.</p> <p>There's also the matter of the remaining $9 billion in fines being tax deductible (meaning we're subsidizing the settlement), and the fact that Chase is&nbsp;<a href="" target="_blank">reportedly trying to get the FDIC to assume</a>&nbsp;some of Washington Mutual's liability.</p> <p>But overall, the key to this whole thing is that the punishment is just money, and not a crippling amount, and not from any individual's pocket, either.</p> <p><img src="" border="0" alt="Bernie Madoff" width="800" style="color: #000000;" /><strong>I<span style="line-height: 1.5em;">n fact, the deal that has just been completed between Chase and the state represents the end, or near the end, of a long process by which people who committed essentially the same crimes as Bernie Madoff will walk away without paying any individual penalty.</span></strong></p> <p>What Washington Mutual and Bear Stearns (Chase's guilty acquisitions) were doing in the mortgage markets was little more than an elaborate take on a Madoff-style Ponzi scheme. Actually, most of the industry was guilty of the same thing, but in the cases of these two banks in particular the concrete evidence of fraud is extensive, and the comparison to a Madoff-style caper isn't a fanciful metaphor but more like evidentiary fact.</p> <p>Madoff's operational fiction was his own personality. He used his charm and his lifestyle and his social status to con rich individuals into ponying up money into an essentially nonexistent investment scheme.</p> <p>In the cases of both WaMu and especially Bear, the operating fictions were broad, carefully-crafted infrastructures of bogus guarantees, flatlined due diligence mechanisms, corrupted ratings agencies and other types of legal chicanery. These fake guarantees and assurances misled investors about they were buying. Most thought they were investing in home mortgages. What they were actually investing in was a flow of cash from new investors that banks like Bear and WaMu were pushing into a rapidly-overheating speculative bubble.</p> <p>These banks created huge masses of mortgage securities they knew to be highly risky and/or fraudulent. At Bear, one deal manager jokingly nicknamed one pool of mortgages, SACO-2006-08, the "SACK OF SHIT" deal. In another case, Bear's securitization company, EMC, obtained a pool of mortgages from a sketchy mortgage originator called AHM, and found out that as much as 60 percent of the batch was delinquent.</p> <p>Yet they continued to buy these mortgages and throw them into the great hamburger-machine, turning them into securities that would in turn be bought by everyone from pension funds to Fannie and Freddie. And then they pushed sales even harder, relying upon the influx of new buyers of these securities to keep the value of the old securities stable.</p> <p>This is exactly what Bernie Madoff did, it's what&nbsp;<a href="" target="_blank">Charles Ponzi</a>&nbsp;did, and it's what&nbsp;<a href="" target="_blank">Allen Stanford</a>&nbsp;did &mdash; using cash from new investors to pay off the old investors. The supermarket-bank version of this game was just more elaborate, involved more moving parts and threatened indescribably greater damage.</p> <p>Bernie Madoff ultimately caused about&nbsp;<a href=";segmentUtilities" target="_blank">$18 billion in losses</a>. When he got caught, the state threw the book at him, giving him a&nbsp;<a href=";_r=0" target="_blank">150-year jail sentence</a>.</p> <p>Meanwhile, just the subset of Bear Stearns defendants,&nbsp;<a href="" target="_blank">according to a complaint</a>&nbsp;against Chase filed last year by Eric Schneiderman, caused $22.5 billion in losses in just two years, 2006 and 2007.</p> <p>And while it is true that the federal government in this latest $13 billion settlement is ostensibly&nbsp;<a href="" target="_blank">reserving the right to continue to pursue criminal charges</a>, don't hold your breath. The arc of this story suggests that the whole purpose of this agreement has been to find the highest price Chase is willing to pay to a) stay in business b) keep employees out of jail.</p> <p>So again, $13 billion sounds like a lot of money. But Bernie Madoff is doing 150 years, and nobody in this cast of characters will personally pay a dollar in fines. Nobody will do one day in jail. That's a huge, huge discrepancy.</p> <p>Of course, Bernie Madoff today is reviled on Wall Street, even by papers like the&nbsp;<em>Wall Street Journal</em>. This is mainly because he ripped off other finance-sector hotshots, but also because he gave Wall Street a bad name.</p> <p>Post-2009 coverage of Madoff from the financial press has focused intently on the failure of the government (and in particular the SEC) to aggressively investigate the scandal in a timely fashion. This has followed a rhetorical line that frequently emanates from the finance sector, in which white-collar crime is somehow less the fault of criminals than of the police who failed to stop it.</p> <p><strong>These "Where were the regulators?" cries generally never show up in financial-press coverage of Wall Street scandals until those same pundits have first exhausted all attempts to argue that no crime was ever committed by the bank/broker/hedge fund in question.</strong></p> <p>Remember, for instance, that there was a time when papers like the&nbsp;<em>Journal&nbsp;</em>thought Bernie Madoff was one of their own, didn't want to make trouble for him, and bluntly refused to investigate him.</p> <p><img class="float_left" src="" border="0" alt="WSJ editorial page editor Paul Gigot" width="480" /></p> <p>The&nbsp;<em>Journal</em>&nbsp;was infamously given the whole seedy Madoff story by investigator Harry Markopolos in 2005 (see&nbsp;<a href="" target="_blank">p. 16 of this devastating testimony</a>), and though reporter John Wilke wanted to follow up on the piece, it appeared his superiors at the paper never gave him the go-ahead.</p> <p>But after Madoff came forward weeping and confessing in late 2008, and there was no longer any possibility of denying his monstrous guilt, suddenly the&nbsp;<em>Journal&nbsp;</em>turned into an ardent critic of soft government enforcement, ragefully denouncing everyone from Eliot Spitzer to the SEC for failing to catch Madoff. In its December 17th, 2009 editorial,&nbsp;<a href="" target="_blank"><em>To Catch a Thief</em></a>, for instance, the paper blasted the financial cops of the world for failing to protect Madoff's investors and the good name of honest Wall Street business:</p> <blockquote> <p style="padding-left: 30px;">The real lesson is that financial enforcement nearly always fails to protect investors, and this Ponzi scheme is merely typical . . . In 1999, trader Harry Markopolos wrote that "Madoff Securities is the world's largest Ponzi Scheme," in a letter to the SEC. More recently, multiple SEC inquiries and exams in 2005 and 2007 found only minor infractions&hellip; Neither current AG Andrew Cuomo nor Mr. Spitzer appears to have had a clue about Mr. Madoff's conduct.</p> </blockquote> <p>As noted by multiple&nbsp;<a href="">media</a>&nbsp;<a href="" target="_blank">outlets</a>&nbsp;at the time, the paper conveniently left out of these thundering denunciations the damning fact that the&nbsp;<em>Journal</em>&nbsp;itself had been contacted by Markopolous years before, and had blown him off even more completely than the SEC.</p> <p>So now we, and they, are talking about the Chase scandal. This is Madoff all over again, only on a much huger scale. Ten years from now, bet on it, the&nbsp;<em>Wall Street Journal&nbsp;</em>will be denouncing everyone from Eric Holder to Lanny Breuer to the SEC and DOJ officials in the Bush administration for failing to protect investors from predatory companies like Bear Stearns, Washington Mutual and their parent, JP Morgan Chase.</p> <p>Right now, however, these papers are still stuck in the denial phase, which is to be expected, I suppose. But it doesn't mean we have to take these ridiculous editorials about Chase's victimhood seriously.</p> <p>A few more notes on the deal. This latest settlement&nbsp;<a href=";_r=0" target="_blank">reportedly came about</a>&nbsp;when CEO Jamie Dimon picked up the phone and called a high-ranking lieutenant of Attorney General Holder, who was about to hold a press conference announcing civil charges against the bank.</p> <p>The Justice Department meekly took the call, canceled the presser, and worked out this hideous deal, instead of doing the right thing and blowing off the self-important Wall Street hotshot long used to resolving meddlesome issues with the gift of his personal attention.</p> <p><strong>Only on Wall Street does the target of a massive federal investigation pick up the telephone and call up the prosecutor expecting to make the thing go away &mdash; and only in recent American history would such a tactic actually work.</strong></p> <p><img src="" border="0" alt="Jamie Dimon" width="800" /></p> <p>Considering the scale of the offenses involved (one could make the argument that Bear Stearns and Washington Mutual by themselves did enough damage and cranked out enough toxic loans to cause the 2008 crash) the state could have taken the hardest of hard lines. Instead, they once again took a big fat check to walk away.</p> <p>Papers like the&nbsp;<em>Journal&nbsp;</em>have particularly complained that Chase should not be held responsible for the offenses committed by companies long before Chase acquired them. What they forget is that Chase has made a fortune off its acquisitions of Bear and Washington Mutual, two purchases which were massively subsidized by the state. Nobody complained about potential liability back when all those two deals were doing for Chase was helping its executives buy overpriced art and summer homes.</p> <p>And remember, this sort of liability was basically the only risk Chase took in these deals. The government took on most of the rest, in order to make the acquisitions happen.</p> <p>Chase got to&nbsp;<a href=";sid=aEZiY02M5pIA&amp;refer=home" target="_blank">buy Bear Stearns with $29 billion in Fed guarantees</a>, with the state setting up a special bailout facility, Maiden Lane, to unwind all of the phony-baloney loans created through Bear's Ponzi-mortgage-mechanism described above. So Chase got to acquire one of the world's biggest investment banks for pennies on the dollar, and then got the Fed to buy up all the toxic parts of the bank's portfolio, essentially making the public the involuntary customer of Bear's criminal inventory.</p> <p>Later on, Chase took $25 billion in TARP money, bought Washington Mutual and its $33 billion in assets for the fire-sale price of $1.9 billion, and then repeated the Bear scenario, getting another Maiden Lane facility to take on the deadliest parts of Washington Mutual's portfolio (including, for instance,&nbsp;<a href="" target="_blank">a pool of mortgages</a>&nbsp;in which 94 percent of the loans had limited documentation).</p> <p>Incidentally, the notion that Chase was somehow dragged kicking and screaming by the government and forced to buy these two massive companies essentially for free is almost as laughable and ridiculous as the oft-cited explanation for the financial crisis, that the government forced banks to lend to the poor.</p> <p>Chase, as has been reported by multiple outlets, had&nbsp;<a href="" target="_blank">already tried on its own to buy both companies</a>&nbsp;before the state arranged its infamous shotgun weddings. Only after both firms collapsed, the economy was in crisis, and Chase was able to get the Fed to eat the toxic portfolios of both companies did these already-longed-for acquisitions take place.</p> <p>Chase was too big to fail before the crash, but it's even Too-Bigger-To-Failier now, thanks to the expanded market share afforded by these two Fed-sterilized acquisitions.&nbsp;<em>Bloomberg&nbsp;</em>reported that Bear's book value has soared by $36 billion since it swallowed up those two firms with the public's help. Its retail banking earnings have soared nearly 1000 percent. It has more than doubled the size of its banking deposits. Chase didn't have a single branch in Florida or California before this deal: It's now a top-5 banking presence in both states.</p> <p><img style="float:right;" src="" border="0" alt="JP Morgan Chase offices Tamp Florida" width="480" />So nobody should be crying for poor Chase now, just because it's no longer able to simply sit back and collect gobs and gobs of essentially free cash from the ill-gotten market share "won" by its two crooked acquisitions.</p> <p>Incidentally, I don't remember hearing anything from Jamie Dimon at the time Chase was acquiring these banks about any reluctance to buy up two firms that had just spent years helping to blow up the world economic system with phony loans. As one friend of mine on Wall Street noted earlier this week, if there was a single document anywhere with Dimon's name on it expressing reluctance about these new bedfellows, it would have been produced ages ago and "that dickhead Sorkin would have put it in his movie."</p> <p>These guys at Chase knew exactly what they were buying when they took on these companies. They just thought they were getting the deal of the century, by taking on the still-functioning businesses of two finance giants for a song, giving Chase a state-subsidized push into the pole position of American banking. And they figured, very nearly correctly, that they would never have to pay any serious freight for all the offenses committed by their new acquisitions.</p> <p>Now they'll have to write a big check, which sucks for them, but what about the victims? To those critics crying about a "shakedown": Would you prefer that Chase merely be required to pay back every dollar to those investors wiped out by these schemes? Because that would be a hell of a lot more than $13 billion.</p> <p>It would be great if everyone covering Wall Street could sign a pact, and agree: No more crying, please, about no-jail, no-individual-penalty settlements in which companies use shareholder money to pay fines at huge discounts relative to the actual damage they caused. And again, wake me up when even one of these guys goes to jail. There are only about a million Americans doing time for less.</p> <div class="related-content"> <h3>More from Rolling Stone:</h3> <ul> <li><strong><a href="">Looting the Pension Funds</a></strong></li> <li><strong><a href="">How Wall Street Killed Financial Reform</a></strong></li> <li><strong><a href="">GOP vs. the Poor</a></strong></li> </ul> </div><p><a href="">Join the conversation about this story &#187;</a></p> The New Head Of The SEC Is Thinking Of Putting A Major Leash On Stock Exchanges Thu, 03 Oct 2013 11:09:13 -0400 Steven Perlberg <p><img style="float:right;" src="" border="0" alt="mary jo white sec" width="480" /></p><p>The SEC's Mary Jo White has taken a hardline approach since her appointment as chairman earlier this year.</p> <p>White has pushed the Commission to <a href="">seek admission of wrongdoing</a> in cases, upending the SEC's longstanding policy of letting bigwigs off with a financial slap on the wrist but no real acknowledgment of guilt.</p> <p>Now, after a <a href="">spate</a> of <a href="">high profile glitches</a> on the stock exchange, White has brought into question whether exchanges should continue to "self-regulate," <a href="">The Wall Street Journal's Andrew Ackerman, Scott Patterson, and Jacob Bunge report</a>:</p> <p style="padding-left: 30px;">The SEC chairman said the self-regulatory function of stock and options exchanges "has encountered challenges" in recent years as the trading venues have evolved into for-profit enterprises that compete more directly with brokerages. She added that "the current nature of exchange competition and the self-regulatory model should be fully evaluated in light of the evolving market structure and trading practices."</p> <p style="padding-left: 30px;">The SEC should review whether the oversight of exchanges "continues to meet the needs of investors and public companies," Ms. White said. The comments reflect her first major public foray into market-structure issues since she took charge of the SEC in April.</p> <p>According to the Journal, so-called "dark pools" (private trading venues under less scrutiny) traded 38% of all shares. The growth of "opaque markets" has hurt the bottom line of exchanges, which make revenue off of executing buy and sell orders.</p> <p><span style="line-height: 1.5em;">"The review could result in a move to strip exchanges of some current responsibilities. It also could lead to tighter regulation for the private venues, which could benefit exchanges," the Journal reported.</span></p> <p><a href=""><span style="line-height: 1.5em;">Read the full report at the Wall Street Journal&nbsp;&raquo;</span></a></p><p><a href="">Join the conversation about this story &#187;</a></p> THE IMF: Here's How Much Financial Regulation Is Going To Cost The US Wed, 12 Sep 2012 11:04:00 -0400 Joshua Berlinger <p><img style="float:right;" src="" border="0" alt="IMF" /></p><p>Stringent financial regulations may come at a price, but according to&nbsp;<span>the International Monetary Fund (IMF) newest report,</span>&nbsp;those costs pale in comparison to the economic costs that arise as a result of severe financial crises.</p> <p>The report,<em>&nbsp;<a href="">Estimating the Costs of Financial Regulation</a></em>, posited that, "an increase in lenders' operating costs," and would affect, "bank costumers, employees, and investors. Yet banks appear to have the ability to adapt to the regulatory changes without actions that would harm the wider economy."</p> <p>What are the exact prices of these reforms?</p> <p>26 base points in the United States, 17 base points in Europe, and 8 base points in Japan. A base point is equal to one hundredth of a percentage point.</p> <p><span>The report analyzes changes in lending rates and&nbsp;</span><span>focuses on reforms related to&nbsp;</span><span>more thorough capital, liquidity requirements, tougher rules in regulating the&nbsp;</span><span>derivatives market, and new taxes and fees that lenders have incurred as a result of financial reform.</span></p> <p><span><br /></span></p> <p><span><br /></span></p> <p><span><br /></span></p> <p><span><br /></span></p><p><a href="">Join the conversation about this story &#187;</a></p> The SEC's Counsel Literally Told A Wall Street Lawyer That Reading New Financial Regulation Was 'Nap Time' Wed, 05 Sep 2012 09:37:00 -0400 Linette Lopez <p><img style="float:right;" src="" border="0" alt="nap park" /></p><p>We had hoped that the rumors that the <a href="" class="hidden_link">SEC</a> was asleep at the wheel while Wall Street lawyers were turning it was overblown.</p> <p>Again, our hopes have been dashed. Literally. In an e-mail to an SEC commissioner turned Wall Street lawyer named <strong>Annette Nazareth</strong>, the SEC's then-Council David Becker referred to reading new Wall Street regulation as "nap time."</p> <p>Nazareth, of course, said there was no time for sleeping.</p> <p>Here's how we know: <a href="">Bloomberg Businessweek</a> filed a Freedom of Information Act Request to obtain e-mails between the SEC and one of the agency's former commissioners who went to work for a law firm representing Wall Street banks. The e-mails are dated from February 2009 to March 2011 &mdash; during the bulk of Wall Street regulation writing.</p> <p>And now for the exchange <a href="">(from Bloomberg):</a></p> <p style="padding-left: 30px;">Early in the Dodd-Frank debate, in November 2009, Nazareth forwarded a summary of a Senate proposal to Becker, who noted that the actual text ran to 1,100 pages. <strong>&ldquo;More nap time for me,&rdquo; he wrote.</strong></p> <p style="padding-left: 30px;"><strong>That prompted Nazareth to ask, &ldquo;Yea, but what about me? No rest for the outside counsel.&rdquo;</strong></p> <p style="padding-left: 30px;">Becker responded about 25 minutes later with an offer to connect Nazareth with the agency&rsquo;s newly named director of trading and markets, who had worked with Becker in private practice. &ldquo;I&rsquo;m going to encourage Robert Cook to call you for the scoop,&rdquo; he wrote. Cook said through an SEC spokesman that he doesn&rsquo;t recall discussing the Davis Polk document with anyone at the time.</p> <p>Becker is now at law firm Cleary Gottlieb.</p> <h3><a href="">You should definitely read the rest of the piece at Bloomberg Businessweek&gt;</a></h3><p><a href="">Join the conversation about this story &#187;</a></p> A Former Banker Turned Regulator Explains Why He Joined The Other Side Mon, 25 Jun 2012 12:39:10 -0400 Linette Lopez <p><img style="float:right;" src="" border="0" alt="maricopa county sheriff joe arpaio" width="400" height="300" /></p><p>Bankers and regulators have a rocky relationship. Bankers sometimes say regulators are people that just weren't smart enough to work on the Street. Regulators sometimes say bankers are evil.</p> <p>I could go on.</p> <p>So when someone moves from one side to the other without taking a big head honcho position (especially from banking to regulating), it can be a little surprising.</p> <p>Everyone who makes this move obviously has their reasons, and they tend to be interesting.</p> <p><a href="">The Guardian's Banking Blog</a> caught up with one regulator in London who left his job in 'The City' to make much less money working for the government. Why? He said that banking is an amoral environment where decisions are made without any consideration for morality. Not only that, but he was never really into material things.</p> <p>But that's not the most important thing. Bottom line, this former banker didn't want to get trapped.</p> <p><a href="">From The Guardian:</a></p> <p style="padding-left: 30px;">...I had become disillusioned at my bank. My friends from university are all teachers, doctors, police offers. I found myself increasingly embarrassed about what I did. I suppose the public-sector background of my social circle kept me grounded. I was always ambivalent, even though I was good at it. Without wanting to fly my own kite, I was always getting reviews saying, 'Exceeds expectations,' and that sort of thing.</p> <p style="padding-left: 30px;">"Also, I just wasn't into luxury goods. <strong>The way it works for so many is that you fall into this industry, it is high-profile and the money is quite good; you get intoxicated and over time you get trapped. I remember reaching a point when I thought, 'If I don't move out of the bank now, I never will.'</strong> Then I thought, 'Where can I use my skills usefully?' Answer: at the regulator. Lots of my colleagues at the FSA have been in banks. You need a mix &ndash; outsiders whose fresh perspective allows them to ask the simple big questions, and former insiders like me who can cut through the bullshit that banks feed you.</p> <p>The banks, though, still have this regulators resume. He says he may be even more attractive to them now then ever before. The relationship between regulators and The Street is less cozy than it was before, and banks want some employees who know what government officials are thinking about.</p> <p>So think about that.</p><p><a href="">Join the conversation about this story &#187;</a></p> ELIZABETH WARREN: Jamie Dimon Should Resign From The Fed Mon, 14 May 2012 12:31:27 -0400 Alex Biles <p><img style="float:right;" src="" border="0" alt="elizabeth warren " /></p><p>Massachusetts Senate hopeful <a class="hidden_link" href="">Elizabeth Warren</a> hit the morning show circuit today to call for &nbsp;JPMorgan CEO Jamie Dimon's resignation from the New York Federal Reserve Board in the wake of his bank's shocking two-month $2 billion loss.</p> <p>"I&rsquo;d like to see <a class="hidden_link" href="">Jamie Dimon</a>, for example, resign from his position as a Class A director of the New York Federal Reserve Bank,&rdquo; Warren <a href="">said during an appearance on CBS's "This Morning."</a>&nbsp;"<span>The banks cannot regulate themselves."</span></p> <p>Calling for more accountability and regulations, Warren&nbsp;<a href="">later told CNN</a>&nbsp;that Dimon has been a key leader in Wall Street's "guerrilla war" against tightening federal regulations on the financial sector.</p> <p id="continue">&ldquo;Jamie Dimon has been the one who has led the charge in order to say, &lsquo;Nope, no more regulation, fight back against regulation, call the regulation un-American, try to resist, try to put loopholes into regulation, hire an army of lobbyists," <span>Warren said in an interview with CNN's "Starting Point." "</span>This has really got to stop.&rdquo;</p> <p>The JPMorgan loss actually couldn't have come at a better time for Warren, presenting her with the opportunity to bring the focus back to her consumer advocacy credentials. The Harvard law professor, who is locked in a tight race <span>against Republican <a class="hidden_link" href="">Scott Brown</a>, has lost ground in recent weeks as she&nbsp;</span>struggles to shake off stories about<a href=""> whether she used her unconfirmed Native American heritage to bolster her academic career.</a></p><p><a href="">Join the conversation about this story &#187;</a></p> GOLDMAN: New Fed Regulation Could Destroy 300,000 American Jobs Thu, 03 May 2012 11:00:00 -0400 Lisa Du <p><img style="float:right;" src="" border="0" alt="explosion fire" width="349" height="264" /></p><p><a href="" class="hidden_link">Goldman Sachs</a> is arguing against a proposed Fed Rule by picking on probably the most sensitive topic in the American economy today: jobs.</p> <p>The rule in question is a <a href=";doc_ver=1">requirement that banks limit single counterparty exposures to 25% of their regulatory capital</a>, and is being mandated as part of the Dodd-Frank reforms.</p> <p>The Fed, however, is taking it a step further and wants banks with over $500 billion in assets to limit exposures to each other to only 10% of regulatory capital, <a href="">in order to prevent a domino-effect collapse of multiple banks should just one fail</a>, according to the FT.</p> <p>Banks, naturally, say it's unreasonable and that the Fed's models for calculating exposure magnify the numbers without reason. It's also been reported that the <a href=";rct=j&amp;q=&amp;esrc=s&amp;source=web&amp;cd=3&amp;ved=0CD4QFjAC&amp;;ei=tJyiT_WoMcOf6AHGl8VV&amp;usg=AFQjCNFLM08-Z5yFpRobA1UVc-obXl5epg">CEOs of the largest banks in the US spent a meeting at the New York Fed yesterday</a> arguing against this rule too.</p> <p>But in a particular stern letter to the Fed Monday, <a href="">Goldman Sachs laid out the true doom and gloom scenario</a>, as Mark Gongloff at the Huffington Post noted. In the letter, <a href="">Goldman traces the effect that limiting a bank's exposure</a> to each other would have all way through to the heart of the American economy: jobs&mdash;</p> <p style="padding-left: 30px;">The Proposed Rules could have wide- ranging negative economic consequences. They are likely to damage market liquidity, generating lower returns for investors and driving higher funding costs for corporate debt issuers, as well as higher transaction costs for activities like hedging interest rate and foreign exchange exposures. This is likely to harm U.S. economic growth and international competitiveness. <strong>We estimate that the liquidity impact to the&nbsp;corporate bond market alone would reduce real GDP growth in the U.S. by 15 to 40 basis points over a year. This, in turn, could raise the unemployment rate by 10 to 20 basis points eliminating 150,000 to 300,000 U.S. jobs.</strong> Given the current economic environment, <strong>it is unclear what the [Federal Reserve Board] could do to offset these impacts through monetary policy</strong>.&nbsp;</p> <p>It seems like Goldman's message is essentially: stop trying to regulate us more, because if you do jobs will be axed and no amount of QE will be able to help you then.</p><p><a href="">Join the conversation about this story &#187;</a></p> One Bank Has Admitted They Manipulated Interest Rates, But So Far Nothing Is Being Done Tue, 06 Mar 2012 08:48:07 -0500 Larry Doyle <p>What is that eerie silence emanating from Wall Street lately? No, it is not the quiet on the floors of the equity exchanges in the midst of anemic trading volumes. It is also not the empty echoes emanating from trading desks once bursting with activity.</p> <p>The eerie silence to which I allude goes to the price fixing at the very core of how our Wall Street banks fund themselves in the overnight market. Sounds ominous, no? Let&rsquo;s navigate and enter the world of Libor based funding. What is <a href="">Libor</a>?&nbsp;</p> <p style="padding-left: 30px;">An&nbsp;interest rate at which banks can borrow funds, in marketable size, from other banks in the London interbank market. The LIBOR is&nbsp;fixed on a daily basis by the British Bankers&rsquo; Association.&nbsp;The LIBOR is derived from a filtered average of the world&rsquo;s most creditworthy banks&rsquo; interbank&nbsp;deposit&nbsp;rates&nbsp;for larger loans with maturities&nbsp;between overnight&nbsp;and one full year.</p> <p>When our friendly <a href="">Investing primer</a> used the word <strong>&ldquo;fixed&rdquo;</strong> in its definition of Libor, I do not believe they thought of that term in such a literal fashion but that is exactly the type of organized activity that transpired within this arcane little corner of our financial markets. Did I say &ldquo;little&rdquo;? I misspoke.</p> <p>Libor is the rate utilized for hundreds of trillions of dollars of investments and transactions. Think the major banks involved in this market have an enormous interest in seeing how that rate was set? Oh yeah!!</p> <p>Recall that back in 2008 every major bank was on the precipice of failing. These banks were increasingly strapped for funding even in 2007 and in an attempt to keep their funding costs down we now learn that they were seemingly engaged in collusive behaviors, aka price fixing.</p> <p>I should have addressed this story earlier but let&rsquo;s catch up in reviewing a recent <em><a href="" class="hidden_link">Wall Street Journal</a></em> story highlighting how <a href="">Traders Manipulated A Key Interest Rate</a>:</p> <p style="padding-left: 30px;">A group of traders and brokers successfully managed to manipulate an interest rate that affects loans around the world, one of the banks being investigated has told regulators.</p> <p><img src="" border="0" alt="wall street bull stepping on protestors" /></p> <p>I believe it defies logic to think that a handful of traders within these banks operated this ring independent of senior management. The treasurers of these large banks are ultimately responsible for the funding of operations and all related costs. To think that these treasurers were not aware of this market manipulation is beyond ridiculous.</p> <p style="padding-left: 30px;">In a court filing in Ottawa, Canada&rsquo;s Competition Bureau said a bank it didn&rsquo;t identify has told the agency&rsquo;s investigators that people involved in the alleged scheme &ldquo;were able to move&rdquo; interest rates.</p> <p style="padding-left: 30px;">People familiar with the situation said the &ldquo;cooperating party&rdquo; is UBS&nbsp;AG.</p> <p style="padding-left: 30px;">The Swiss bank has said it is assisting regulators in a sprawling interest-rate probe in North America, Europe and Asia, which has led to a score of individuals being fired or suspended by major U.S. and European banks and leading brokers.</p> <p style="padding-left: 30px;">No banks or individuals have been charged with wrongdoing.</p> <p>Is this for real? We have what appears to be a major ring of banks engaged in a massive form of collusion and no banks or individuals are charged? Do you think if the traders were charged they may be motivated to expose the treasurers and others within our central banking system (Federal Reserve and US Treasury) who were aware of this activity? You think?</p> <p><span><a class="hidden_link" href="">Where</a> are <a class="hidden_link" href="">Ben Bernanke</a> and <a class="hidden_link" href="">Tim Geithner</a> on this?</span></p> <p style="padding-left: 30px;">The benchmark interest rates at the center of the probe are used to price home and auto loans, corporate debt and derivatives totaling more than $350 trillion.</p> <p style="padding-left: 30px;">The Canadian court documents, which were reviewed by <em>The Wall Street Journal</em>, name several alleged participants of the scheme, which involved the yen London interbank offered rate, known as yen Libor, between 2007 and June 2010.</p> <p style="padding-left: 30px;">The documents said regulators also are looking at alleged attempts to fix the prices of certain derivative financial products linked to Libor.</p> <p>Why haven&rsquo;t we heard from individuals who were fired? The Wall Street code of silence clearly comes into play here. How does that work? When employees leave these large banks they are typically compelled to sign a release in which they effectively agree to &ldquo;shut up&rdquo;. What is the result? No transparency and little public knowledge or accounting of what happens in situations such as these.</p> <p>What is that sound you hear?</p> <p><iframe width="640" height="360" frameborder="0" src=""></iframe></p> <p><strong>Read more posts on <a href="">Sense on Cents &raquo;</a></strong></p><p><a href="">Join the conversation about this story &#187;</a></p> The Long Arm Of Uncle Sam Just Got Longer Fri, 17 Feb 2012 06:35:00 -0500 Simon Black <p><img style="float:right;" src="" border="0" alt="uncle sam 4x3" /></p><p>This one&rsquo;s hot off the presses. Just yesterday, our friends at the Financial Crimes Enforcement Network (FinCEN) issued a press release on its latest ruling related to foreign &lsquo;money service businesses (MSBs).&rsquo;</p> <p>An MSB is a private company that provides certain financial services like check cashing, money orders, title pawn, payday loans, travelers&rsquo; checks, prepaid stored value cards, tax refund payments, etc.</p> <p>Frequently, traditional MSB clients tended to be individuals without bank accounts or access to credit.&nbsp; But increasingly, the US government is looking at companies engaged in electronic payments, crowdsourced funding, and even microcredit finance as money service businesses.</p> <p>The implication? They should all be regulated. Even if they&rsquo;re not even US companies.</p> <p>That&rsquo;s right. <a href="">FinCEN&rsquo;s latest ruling</a> suggests a foreign MSB may now be subject to US regulations AND CRIMINAL PENALTIES &ldquo;even if none of its agents, agencies, branches or offices are physically located in the United States.&rdquo;</p> <p>FinCEN goes on to say that foreign-located MSBs must also comply with US anti-money laundering regulations and submit &lsquo;suspicious activity reports&rsquo;, i.e. assimilate into the US financial system and become yet another unpaid spy of the US government.</p> <p>Further, foreign MSBs must register with FinCEN AND appoint a person residing in the United States as a legal representative in matters of compliance. If not, foreign MSBs risk severe civil and criminal penalties.</p> <p>Needless to say, FinCEN came up with this &lsquo;rule&rsquo; all on its own. There was no legislative process, no Congressional debate. Quite simply, a bunch of bureaucrats decided to create a new rule that, amazingly enough, has the same weight and gravitas as a law.</p> <p>This is the way society is ordered today. There&rsquo;s one set of rules that Congress creates&ndash; the laws.&nbsp; Then there&rsquo;s another set of rules that the President creates in his sole discretion&ndash; executive orders and the occasional treaty.&nbsp; Then there&rsquo;s a third set of rules that are created by enforcement agencies like FinCEN&ndash; regulations and policies.</p> <p>This is the part that&rsquo;s truly extraordinary. Despite the &lsquo;free and democratic society&rsquo; that most of us live in, these agencies are accountable to no one. They are not elected officials, they have no checks and balances, and there is little (if any) judicial oversight.</p> <p>From the FBI&rsquo;s &ldquo;administrative subpoenas&rdquo; that gives the agency nearly totalitarian authority to commandeer the information of private companies, to the Justice Department&rsquo;s &ldquo;policies&rdquo; on civil asset forfeiture, to FinCEN&rsquo;s &ldquo;rules&rdquo; subjecting foreign companies to US criminal penalties, this is getting completely out of control.</p> <p>With nearly 100% certainty, as you read this sentence right now, you are in violation of probably several such rules and regulations that you&rsquo;ve never heard of. Even if you&rsquo;re not in the United States, as the FinCEN case clearly demonstrates.</p> <p>Each of these rules has been conjured without your knowledge, put into effect without your consent, and tied to the most ridiculous civil and criminal penalties imaginable. You can&rsquo;t even fill out a passport application anymore without being threatened with a $10,000 fine.</p> <p>In his comprehensive annals of the reigns of Tiberius and Nero, Roman historian Tacitus wrote, &ldquo;corruptissima re publica plurimae leges.&rdquo; This is most often mistranslated as &ldquo;the more corrupt a society, the more numerous its laws.&rdquo;</p> <p>In truth, Tacitus was referring to Rome&rsquo;s history, and a more accurate translation is &ldquo;laws were most numerous when the commonwealth was most corrupt.&rdquo;</p> <p>Future historians will likely look back and say the same thing about our society. Except that we&rsquo;re not talking about laws. We&rsquo;re talking about the &lsquo;rules&rsquo; of autonomous enforcement agencies that have extensive (and growing) police powers.</p> <p>A better quote comes from a 1969 speech from William T. Gossett, then president of the American Bar Association:</p> <p>&ldquo;The rule of law can be wiped out in one misguided, however well-intentioned generation. And if that should happen, it could take a century of striving and ordeal to restore it, and then only at the cost of the lives of many good men and women.&rdquo;</p> <p><strong>Read more posts on <a href="">Sovereign Man &raquo;</a></strong></p><p><a href="">Join the conversation about this story &#187;</a></p> In 1995, Newt Gingrich Almost Predicted The Credit Crisis, Except For The Part About It Being Caused By Saddam Hussien-Trained Hackers Wed, 01 Feb 2012 10:43:58 -0500 Ben Walsh <p><a href=""><img style="float:right;" src="" border="0" alt="saddam hussein" width="400" height="300" />Mother Jones</a> has this great item from 1995 (h/t to <a href=";utm_medium=feed&amp;utm_campaign=Feed%3A+boingboing%2FiBag+%28Boing+Boing%29">Boing Boing</a>):</p> <p style="padding-left: 30px;">"[Newt] Gingrich warned of a horror scenario in which Saddam Hussein trained a hacker army to cause civil unrest by issuing 500,000 <a class="hidden_link" href="">American Express</a> cards and then charging absurd fees."</p> <p>Take a leap and replace Saddam Hussein with financial institutions of all stripes and Amex with debt instruments of all kinds and Gingrich almost nailed a huge part of what went wrong during the credit bubble and subsequent crisis a decade or so in advance.</p> <p>So perhaps if there's any historical figure Gingrich most resembles, it's Nostradamus. After all, if you make an incredibly high volume of outlandish and vague yet specific predictions, facts can eventually be contorted to prove you almost right...sort of.</p><p><a href="">Join the conversation about this story &#187;</a></p> Here's The Simple Explanation Behind The Difference In Citi And Wells Fargo Earnings (C, WFC) Tue, 17 Jan 2012 12:34:00 -0500 Lisa Du <p>Both Citigroup and <a href="" class="hidden_link">Wells Fargo</a> released fourth quarter earnings this morning, albeit very different results.</p> <ul> <li>Wells Fargo reported earnings per share of $0.73 and revenue of $20.6 billion, beating estimates of $0.72 and $20 billion, respectively.</li> <li>Citigroup, on the other hand, reported <a href="">earnings per share of $0.38 and revenue of $17.2 billion, well below expectations</a>&mdash;which had been slashed repeatedly in the last week&mdash;of $0.51 EPS and $18.46 billion revenue.</li> </ul> <p>The reports are clearly reflected in the markets today&mdash;<a href="" class="hidden_link">Citi</a>&nbsp;has fallen&nbsp;over 6% today, and Wells Fargo shares are up about 1.86%.</p> <p>Earlier today on <a href="" class="hidden_link">Bloomberg</a> TV, Loop Capital Markets CEO Jim Reynolds discussed the big difference between Wells Fargo and Citi that has resulted in such different earnings and market reactions: it's the business model.</p> <p><span>"Wells Fargo... if you look at that business model five to six years ago, you wouldn't have liked it because you needed to be in the capital markets," Reynolds said. "You look at that business model today, it's fantastic, it's beautiful. It's got the&nbsp;right risk climate."</span></p> <p>Wells Fargo, the fourth largest US bank by assets, <a href="">has kept focus on traditional retail banking operations and been slow in expanding its investment banking business</a>, according to a Bloomberg report last week. Now, that's paying off as a volatile global economy has sapped investment banking revenues at banks. JP Morgan's <a href=";mode=content&amp;id=4f15b0276bb3f73a18000038">4Q earnings reported a 52% decrease in year-over-year investment bank revenue</a>. Earlier today, Citi reported its investment banking revenue had a <a href="">45% revenue decrease compared to the same period in 2010</a>.</p> <p><span>I</span>t will also be much easier for Wells Fargo to meet Dodd-Frank requirements, including the impending Volcker Rule&mdash;which has caused many banks unwind major trading desks. The bank has also been rewarded with a higher market value than other major U.S. banks, including Citi and <a href="" class="hidden_link">JP Morgan</a>.</p> <p>Bloomberg TV's Dominic Chu pinpointed the key issue to ponder: <strong>Whether Wells Fargo's "slow and steady" business model will actually pay off in the end</strong>. Since 2012 will be a key year to observe the effects of global and domestic regulation and higher capital requirements, we'll know in due time.</p> <p>Here's a video of the discussion:</p> <script src=";height=316&amp;embedCode=JnaHlhMzoym9u30hjp_yN-a7FH0nX28q&amp;videoPcode=BhdmY6l9g002rBhQ6aEBZiheacDu" type="text/javascript"></script> <noscript>&amp;amp;amp;amp;amp;lt;object classid="clsid:D27CDB6E-AE6D-11cf-96B8-444553540000" id="ooyalaPlayer_1t1jk_gxj2k2yp" width="560" height="316" codebase=""&amp;amp;amp;amp;amp;gt;&amp;amp;amp;amp;amp;lt;param name="movie" value=";amp;amp;amp;amp;amp;version=2" /&amp;amp;amp;amp;amp;gt;&amp;amp;amp;amp;amp;lt;param name="bgcolor" value="#000000" /&amp;amp;amp;amp;amp;gt;&amp;amp;amp;amp;amp;lt;param name="allowScriptAccess" value="always" /&amp;amp;amp;amp;amp;gt;&amp;amp;amp;amp;amp;lt;param name="allowFullScreen" value="true" /&amp;amp;amp;amp;amp;gt;&amp;amp;amp;amp;amp;lt;param name="flashvars" value="embedType=noscriptObjectTag&amp;amp;amp;amp;amp;amp;embedCode=JnaHlhMzoym9u30hjp_yN-a7FH0nX28q&amp;amp;amp;amp;amp;amp;videoPcode=BhdmY6l9g002rBhQ6aEBZiheacDu" /&amp;amp;amp;amp;amp;gt;&amp;amp;amp;amp;amp;lt;embed src=";amp;amp;amp;amp;amp;version=2" bgcolor="#000000" width="560" height="316" name="ooyalaPlayer_1t1jk_gxj2k2yp" align="middle" play="true" loop="false" allowscriptaccess="always" allowfullscreen="true" type="application/x-shockwave-flash" flashvars="&amp;amp;amp;amp;amp;amp;embedCode=JnaHlhMzoym9u30hjp_yN-a7FH0nX28q&amp;amp;amp;amp;amp;amp;videoPcode=BhdmY6l9g002rBhQ6aEBZiheacDu" pluginspage=""&amp;amp;amp;amp;amp;gt;&amp;amp;amp;amp;amp;lt;/embed&amp;amp;amp;amp;amp;gt;&amp;amp;amp;amp;amp;lt;/object&amp;amp;amp;amp;amp;gt;</noscript><p><a href="">Join the conversation about this story &#187;</a></p> Treasury Strikes Back: Spokesman Says Calls For Repealing Dodd-Frank Are The True Source Of Uncertainty Thu, 12 Jan 2012 11:32:00 -0500 Steve Liesman <p class="textBodyBlack"><img style="float:right;" src="" border="0" alt="tim geithner gives a stern look at indian economic forum" /></p><p>The Treasury is hitting back against critics of Dodd-Frank Act who have complained that the volume of new financial regulations and the delays in writing them are holding back lending and hurting the economy.</p> <p class="textBodyBlack">In response to a <a class="hidden_link" href="">CNBC</a> request for comment, a Treasury spokesman said the real uncertainty comes from those seeking to repeal the sweeping financial regulatory reform law.A recent report from the Davis-Polk law firm showed regulators have missed the deadline on 78 percent of the 400 rules and regulations required under Dodd-Frank, including 12 percent, or 25 rules, where the deadline has been missed but the rules have not even been proposed.&nbsp;</p> <p class="textBodyBlack"><span id="byLine"></span>&ldquo;Current calls to repeal Wall Street reform are a significant cause of the uncertainty that responsible business leaders are seeking to avoid,&rdquo; the spokesman said. &ldquo;Once it is fully implemented, Wall Street reform will improve market certainty, strengthen the financial system, help boost the economy, and provide better protections for taxpayers.&rdquo;</p> <p class="textBodyBlack"><span id="byLine"></span>The Treasury also cited recent Senate testimony by Deputy Secretary Neal Wolin, who said regulators are trying to balance speed with the need for public comment and time to get it right.</p> <p class="textBodyBlack"><span id="byLine"></span>&ldquo;The Dodd-Frank Act is designed to help protect our economy for generations,&rdquo; the spokesman said. &ldquo;Many of its reforms involve some of the most complex areas of finance.&rdquo;&nbsp;</p> <p class="textBodyBlack"><span id="byLine"></span>In interviews, Davis-Polk analysts cited four key areas where progress has lagged: derivatives/swaps regulation, the&nbsp;<a href=""><strong><strong>Volcker rule</strong></strong></a>, which prohibits proprietary trading by regulated banks, the Basel III international banking accords, and new mortgage capital rules.</p> <p class="textBodyBlack"><span id="byLine"></span>For example, regulations for the Volcker rule were supposed to have been adopted in October. Yesterday, the <a class="hidden_link" href="">Commodity Futures Trading Commission</a> issued its proposed Volcker rule regulations, the last of the regulators to do so. The law takes effect in July, whether or not the agencies have implemented their final rules. The Treasury said it expects final Volcker rules to be adopted this year.</p> <p class="textBodyBlack"><span id="byLine"></span>Further complicating the outlook, most Republican presidential candidates have pledged to repeal Dodd-Frank, citing it as a major impediment to economic growth.&nbsp;</p> <p class="textBodyBlack"><span id="byLine"></span>In public comments in December, JPMorgan Chase chief <a class="hidden_link" href="">Jamie Dimon</a> said there are parts of Dodd-Frank he agrees with, but he went on to criticize certain areas of the law, especially the Volcker rule. He said it&rsquo;s vital that regulators &ldquo;get it right.&rdquo;</p> <p class="textBodyBlack"><span id="byLine"></span>&ldquo;We have the deepest, widest, most transparent and best capital markets on the planet,&rdquo; Dimon said. &ldquo;Let's be really careful about damaging that, okay?&rdquo;</p> <p class="textBodyBlack"><span id="byLine"></span>He said bankers were still waiting to hear from regulators how much &ldquo;skin in the game&rdquo; they had to retain in their mortgage business, a reference to Dodd-Frank rules that require banks to keep a certain percentage of their home lending business on the books.</p> <p class="textBodyBlack"><span id="byLine"></span>&ldquo;Three years after the crisis, we don't know what qualified mortgages are. We don't know the GSEs. We don't know what the skin in the game is,&rdquo; Dimon said. &ldquo;It's holding back the mortgage market. I wish this was done much quicker.&rdquo;</p> <p class="textBodyBlack"><span id="byLine"></span>Treasury officials, for their part, say much has been accomplished already. They point to the establishment of new agencies, such as the Consumer Finance Protection Bureau and the Financial Stability Oversight Council.</p> <p class="textBodyBlack"><span id="byLine"></span>They also note that the Fed has proposed sweeping new standards for the biggest banks that require them over the next several years to raise their capital levels.</p> <p class="textBodyBlack"><span id="byLine"></span>Officials also note that final rules have been adopted for the liquidation of big institutions, so that there will be a process in place if the economy faces another Lehman Brothers-sized failure.</p> <p class="textBodyBlack"><em>This <a href="">post</a> originally appeared at <a href="">CNBC.</a></em></p><p><a href="">Join the conversation about this story &#187;</a></p> There's A Revolution Coming In Global Finance Thu, 05 Jan 2012 17:55:00 -0500 Andrew Sheng <div class="instapaper_body"> <p><img style="float:right;" src="" border="0" alt="french revolution" width="394" height="295" />HONG KONG &ndash; In March 2011, the catastrophic earthquake, tsunami, and nuclear disaster that hit Japan halted production of key components on which many global supply chains depend. The sudden disruption of these essential materials from the production process forced a reassessment of how these supply chains function. But such vulnerabilities are not confined to the manufacturing sector. The finance industry, too, has suffered its own near &ldquo;supply chain&rdquo; meltdown in recent times.</p> <p>The failure of <a class="hidden_link" href="">Lehman Brothers</a> in 2008 not only roiled global financial markets, but also brought global trade practically to a standstill as wholesale banks refused to fund each other for fear of counter-party failure. The simple banking system of the past, one based on retail savings being concentrated in order to fund the credit needs of borrowers, had evolved into a highly complex &ndash; and global &ndash; supply chain with knock-on risks of disruption comparable to those seen in Japan last spring.</p> <p>Financial supply chains and those in the manufacturing sector share three key features &ndash; architecture, feedback mechanisms, and processes &ndash; and their robustness and efficiency depend upon how these components interact.</p> <p>In today&rsquo;s financial architecture, as with other supply chains, interdependent networks tend to concentrate in powerful hubs. For example, just two financial centers, London and New York, dominate international finance, and only 22 players conduct 90% of all global foreign-exchange trading. Such concentration is very efficient, but it also contributes to greater systemic risks, because, if the leading hubs fail, the whole system can collapse.</p> <p>Open feedback mechanisms ensure a supply chain&rsquo;s ability to respond to a changing environment, but, in the case of financial supply chains, feedback mechanisms can amplify shocks until the whole system blows up. The Lehman Brothers collapse triggered just such an explosion, with the financial system saved only by government bailouts.</p> <p>Finally, the processes within supply chains, and the feedback interactions between them, can make the system greater or smaller than the sum of its parts. Since a complex network comprises linkages between many sub-networks, individual inefficiencies or weaknesses can have an impact on the viability of the whole.</p> <p>Like manufacturing supply chains in the wake of the Japanese disruption, financial supply chains face formidable pressures to re-engineer and adapt as the global economic balance shifts towards emerging markets. As that happens, billions of consumers will enter these countries&rsquo; middle classes, new social networks will evolve, and climate change will become a growing factor in global commerce.</p> <p>In addition, major regulatory reforms will impose new and higher costs on the financial sector. Banks and other institutions are also under pressure to devise new financial products that can help the real sector to manage more complex risks and enable investment in areas such as green technology and infrastructure for developing economies.</p> <p>Moreover, global financial stability now depends upon greater cooperation at the international level, with tighter enforcement of rules at the national level. It is also clear that emerging markets are searching for alternative growth models that are green and sustainable. Their financial sectors will have to operate very differently from the current model, which is driven by consumption.</p> <p>In a world in which both consumption and finance must grow more slowly to cope with global resource and environmental constraints, what role can finance play in reducing addictive consumption, funded by unsustainable leverage? And, given that financial institutions will have to monitor and manage risk in a radically different manner, both for themselves and their customers, what is the role of distribution in a world where consumption, savings, and investment will accelerate in volatility?</p> <p>Financial &ldquo;production&rdquo; is currently a top-down process. Instruments are designed in such a way that their sales generate more profits for financial engineers than for end users. But the rise of interactive social networking has made financial innovation more bottom-up. Millions of bank customers using mobile phones can provide immediate feedback on which products and services they like or dislike. In the future, client-service and transaction-management systems will receive more input from customers more frequently, so that product design is shaped interactively.</p> <p>The current strategy in the financial sector drives excessive competition by increasing market share at rivals&rsquo; expense, often breaking trust with customers for the sake of short-term gains. Yet the financial sector has, in previous eras, proven that it can operate as a public good by providing trustworthy, efficient services. The winning financial supply chains of the future will instill confidence that they offer safe, stable, and efficient services to the most clients.</p> <p>Innovation in the last century focused on processes, products, and services. Today, the financial sector needs innovation of a higher order, involving business models, strategy, and management approaches that restore trust in finance. Just as <a class="hidden_link" href="">Steve Jobs</a> of <a class="hidden_link" href="">Apple</a> transformed the computer industry through lifestyle products and highly reliable, user-friendly, and &ldquo;cool&rdquo; services, financial institutions will have to introduce new value chains that create confidence by adapting to the growing needs of new markets.</p> <p>Given such profound changes, financial leaders should think about how to orchestrate a new financial supply chain &ndash; the &ldquo;killer app&rdquo; for our still new century.</p> </div> <p class="bio" dir="ltr"><strong><em>Andrew Sheng, President of the Fung Global Institute, Hong Kong</em></strong>, <strong><em>and the Chief Adviser to the China Banking Regulatory Commission, is a former Chairman of the Securities and</em></strong><em> <strong>Futures Commission of Hong Kong</strong>.</em></p> <p class="bio" dir="ltr"><em>This <a href="">post</a> originally appeared at <a href="">Project Syndicate. </a><br /></em></p><p><a href="">Join the conversation about this story &#187;</a></p> Here's How Wall Street's Biggest Banks Are Going To Make The New Regulations On Them Look Really Good Wed, 21 Dec 2011 13:13:51 -0500 Lisa Du <p><img style="float:right;" src="" border="0" alt="too big to fail" width="400" height="299" /></p><p>Financial regulation is all the rage these days, and banks have always borne the mask of scorn when confronted with new requirements that range from holding more capital to better risk management.</p> <p>But, leave it to bankers to make lemonade out of lemons.&nbsp;<a href=";src=busln">Rob Cox and Peter Larson at Reuters BreakingViews has a piece today about how banks can spin heavier regulation to their benefit</a><span>&mdash;</span>obviously not the original intention of the regulators.&nbsp;They point to <a href="">the G-20 designated 29 global systemically important financial institutions (G-Sifi)</a>, which include American financial giants such as&nbsp;<a class="hidden_link" href="">Goldman Sachs</a>, <a class="hidden_link" href="">JP Morgan</a>. <a class="hidden_link" href="">Morgan Stanley</a>, <a class="hidden_link" href="">Bank of America</a> and Citigroup, along with well-known foreign banks like <a class="hidden_link" href="">UBS</a>, <a class="hidden_link" href="">Barclays</a> and <a class="hidden_link" href="">Deutsche Bank</a> among others.</p> <p><span>According to the G-20's financial enforcement agency, the fall of any G-Sifi &nbsp;&ldquo;would cause significant disruption to the wider financial system and economic activity.&rdquo; And which government would let that happen? So b</span>y its designation alone, the G-Sifis have essentially been labeled "too big to fail." Thus, the new standards and scrutiny that the G-Sifis will be subject to will be appealing to clients, and the extra business that attracts may outweigh the costs of trying to adhere to the new rules.&nbsp;</p> <p>From <a class="hidden_link" href="">Reuters</a> Breakingviews:</p> <p style="padding-left: 30px;">Moreover, in the eyes of&nbsp;credit rating agencies&nbsp;and customers, <strong>banks with a G-Sifi label will be deemed stronger counterparties</strong>. In certain businesses, particularly foreign exchange, credit derivatives, cash management, transaction processing and even equity and fixed-income trading, <strong>this competitive edge could outweigh the cost of holding more capital</strong>.</p> <p>The G-Sifi designation could be so attractive that banks not in the group of 29 might even vie for the label by expanding or petitioning the G-20. Of course, when regulators do finalize the exact rules and requirements for G-Sifis, the advantage could disappear; but for the time being<span>&mdash;t</span>alk about a positive spin on things.</p> <p><strong><a href=";src=busln">Read the whole Reuters piece here &gt;</a></strong></p><p><a href="">Join the conversation about this story &#187;</a></p> Jon Huntsman Has A Radical Financial Reform Plan That Even Occupy Wall Street Will Love Mon, 28 Nov 2011 13:28:00 -0500 Michael Brendan Dougherty <p><img style="float:right;" src="" border="0" alt="jon huntsman" /></p><p></p> <p>Today Jon Huntsman <a href="">promised</a> to do what many across the political spectrum want: end the existence of <a href="" class="hidden_link">Too Big To Fail</a> banks.&nbsp;</p> <p>Huntsman offered up a detailed plan for tax reform earlier in this campaign that the <a href="" class="hidden_link">Wall Street Journal</a> praised as <a href="">a benchmark</a> for all other candidates. Now he has released a plan for reforming the financial sector. And both Tea Party members and Occupy Wall Street should be excited about it.&nbsp;</p> <p>"These reforms are the best tradition of American capitalism - which is letting individuals rise and fall on their own merit," said Huntsman's domestic-policy advisor Steve Bogden, "This is an example of when you need to save capitalism from crony capitalists."</p> <p>Huntsman calls the current financial status-quo after the 2008 crisis and Dodd-Frank a "'doom loop'&nbsp;in which banks and their creditors are bailed out, and therefore feel empowered to again take excessive risk. He points to Europe's increasingly state-managed financial sector as a fate America must avoid. "</p> <p><span>"But this cannot mean that the government allocates credit," Huntsman says, "We need the market to allocate credit, without the kinds of subsidies that encourage a build-up in dangerous amounts of borrowing and leverage anywhere in the economy."</span></p> <p>Here's a thumbnail sketch of the plan:&nbsp;</p> <ul> <li>Set a hard cap on bank size based on assets as a percentage of GDP. (This cap would be on total bank size, not using any of the illusory &ldquo;risk-weights&rdquo; currently central to thinking about bank accounting... )</li> <li>We should have a similar cap on leverage&mdash;total borrowing&mdash;by any individual bank, relative to GDP.</li> <li>Impose a fee on banks whose size exceeds a certain percentage of GDP to cover the cost they would impose on taxpayers in a bailout, thus eliminating the implicit subsidy of their too-big-to- fail status.&nbsp;</li> <li>In addition, focus on establishing an FDIC insurance premium that better reflects the riskiness of banks&rsquo; portfolios.&nbsp;</li> <li>Strengthen capital requirements, moving far beyond what is envisioned in the current Basel Accord.&nbsp;</li> </ul> <p>There are a few standard-issue elements to the plan. Huntsman wants to repeal Dodd-Frank and unwind Fannie and Freddie.&nbsp;</p> <p>But there are some surprises too. Huntsman doesn't endorse the gold-standard explicitly but he does call for "sound money" in his plan contending that we "cannot devalue our way to prosperity."&nbsp;He wants to prosecute robo-signers, calling it a "basic question of the rule of law." And he wants to gently guide Europe to the the kind of "fiscal consensus forged by Alexander Hamilton and Albert Gallatin "</p> <p><strong>UPDATE 2:07 PM</strong> "I don't think anything in there should be controversial. It's all free-market oriented," said Bogden, "letting people be responsible for their actions. If you look at a firm like Brown Bothers Harriman they didn't need a bailout because they had skin in the game. We're just asking the financial sector to resemble the rest of American capitalism."</p> <p>Here's the whole thing.&nbsp;</p> <p>&nbsp;</p> <p><a href="" title="View Financial Reform Backpages on Scribd">Financial Reform Backpages</a><iframe width="610" height="849" frameborder="0" src=";view_mode=list&amp;access_key=key-1qg13m58as84gjp3hx3k" data-auto-height="false" data-aspect-ratio="0.772727272727273"></iframe></p> <p><span><br /></span></p><p><a href="">Join the conversation about this story &#187;</a></p> Democrats Push Financial Transactions Tax, Say It Would Raise $350 Billion Mon, 07 Nov 2011 20:52:39 -0500 Zeke Miller <p><img style="float:right;" src="" border="0" alt="tom harkin" /></p><p>Anger at Wall Street is spilling over into Congress, where Democrats are eyeing a $350 billion financial transaction tax to bring down the deficit.</p> <p>The measure, introduced by&nbsp;<span>Sen. Tom Harkin (D-IA) and Rep. Peter DeFazio (D-OR), would impose a 3-basis point tax on most non-consumer trades, which the Joint Committee on Taxation says would yield $350 billion over the next decade.</span></p> <p><span>&ldquo;It is hard to argue with this substantial revenue &ndash; derived from a tax of $3.00 on $10,000 of Wall Street trading,&rdquo; Harkin said in a statement.&nbsp; &ldquo;Our country needs every dollar possible to invest in infrastructure, job creation, the education of our children and reducing the debt among other priorities.&nbsp; This commonsense tax provides a viable solution.&rdquo;<br /><br />&ldquo;This legislation will generate $350 billion in needed revenue for our cash strapped federal government by targeting speculators flipping stocks a thousand times a minute,&rdquo; DeFazio added. &ldquo;We need serious proposals to get our country back on sound fiscal footing. $350 billion in new revenue will reduce our deficit and enable federal investments in our future."</span></p> <p>The measure has a handful of supporters in both chambers, but it is as yet unclear how much &mdash; if any &mdash; support it has among the leadership.</p> <p><em>More on the tax from the statement:</em></p> <p style="padding-left: 30px;"><strong>The Wall Street Trading and Speculators Tax&nbsp;</strong>places a small tax of three basis points (3 pennies on $100 in value) on most non-consumer financial trading including stocks, bonds and other debts, except for their initial issuance.&nbsp; For example, if a company receives a loan from a financial company, that transaction would not be taxed.&nbsp; But, if the financial institution traded the debt, the trade would be subject to the tax.&nbsp; The tax would also cover all derivative contracts, options, forward contracts, swaps and other complex instruments at their actual cost.&nbsp; The measure excludes debt that has an original term of less than 100 days. &nbsp;</p> <p style="padding-left: 30px;">By setting the tax rate very low, the measure is not likely to impact the decision to engage in productive economic activity.&nbsp; It would, however, reduce certain speculative activities like high-speed computer arbitrage trading.&nbsp; Given the very high volume of financial trading, it will raise considerable funds, badly needed for government services and for reducing deficits.</p> <p style="padding-left: 30px;">The European Union is considering a similar proposal, but with a tax rate that is more than three times higher.&nbsp; Today, 30 foreign nations have in place a tax some financial transactions, including Great Britain and Switzerland.<em><br /></em></p><p><a href="">Join the conversation about this story &#187;</a></p> Now There's A Study To Back Up Who Really Wins The Regulations Vs. Jamie Dimon Fight Fri, 14 Oct 2011 15:19:40 -0400 AP <p><img style="float:right;" src="" border="0" alt="dimon-cnbc" /></p><p>(AP) - Is regulation strangling the American entrepreneur? Several Republican presidential candidates say so.&nbsp;The numbers don't.</p> <p>The anti-regulatory fervor was in evidence Tuesday night in the latest GOP debate, but rhetorical flourishes, on that and other issues, masked far more complex realities.</p> <p>A look at some of the claims and how they compare with the facts.</p> <p>MITT ROMNEY: "All of the Obama regulations, we say no. It costs jobs."</p> <p>RICK PERRY: Regulations "are strangling the American entrepreneurship out there."</p> <p>RICK SANTORUM: "Repeal every regulation the Obama administration put in place."</p> <p>THE FACTS: Labor Department data show that only a tiny percentage of companies that experience large layoffs cite government regulation as the reason. Since Barack Obama took office, just two-tenths of 1 percent of layoffs have been due to government regulation, the data show.</p> <p>Businesses frequently complain about regulation, but there is little evidence that it is any worse now than in the past or that it is costing significant numbers of jobs. Most economists believe there is a simpler explanation: Companies aren't hiring because there isn't enough consumer demand.</p> <p>The conservative National Federation of Independent Business asks its small-business membership each month to name the single most important problem they're facing. Last month, the most common response was "poor sales," cited by 28 percent. Government regulation came in second, at 18 percent.Concerns over regulation have increased in the past two years &mdash; only 11 percent cited it in April 2009, not long after Obama entered the White House. But the rise hasn't been outside historical norms. More small businesses complained about regulation during the administrations of President Bill Clinton and the President George H.W. Bush, according to an analysis of the federation's data by the liberal Economic Policy Institute.</p> <p>High levels of economic uncertainty are another drag on business, but economists say that's less due to regulation than to fights over government spending and taxes. Both consumer and business confidence fell in August, for example, as the White House and Congress wrangled over the nation's borrowing limit. But that was a bipartisan dispute that can't be solely pinned on Obama.</p><p><a href="">Join the conversation about this story &#187;</a></p> ‘Occupy Wall Street’ Should Occupy Washington Mon, 10 Oct 2011 05:53:00 -0400 Larry Doyle <p><img style="float:right;" src="" border="0" alt="Occupy Wall Street" width="400" height="298" /></p><p>Is Wall Street the center of all the problems in America?</p> <p>Many of those involved in the &ldquo;Occupy Wall Street&rsquo; demonstrations may think so. I <strong>strongly</strong> believe that they are wrong.</p> <p>Those with a keen &lsquo;<strong><em>sense on cents</em></strong>&lsquo; understand that Wall Street does embody part of our national problems.</p> <p>They also appreciate that the stench that overhangs Wall Street is far stronger and consistent with the incestuous odor emanating from Washington.</p> <p>As the slow motion train wreck which is our nation&rsquo;s economy continues to play out, I exhort those currently railing on Wall Street to spend a greater amount of time focused on Washington.</p> <p>Those feeling disenfranchised may find it convenient to cast aspersions at the big bad banks. There is no doubt that the financial industry deserves much of the derision directed its way. The fraudulent nature of selected business practices on Wall Street deserve to be fully exposed and prosecuted. Firms and individuals should be held accountable.</p> <p>All this said, the MUCH BIGGER story is exposing the incestuous nature of the relationship between Wall Street and Washington from BOTH sides of the political aisle.&nbsp;</p> <p>The shoddy if not illicit business practices on Wall Street were facilitated by regulators and legislators whom had been &lsquo;<strong>captured</strong>&lsquo; by the industry. This &lsquo;capturing&rsquo;, or as <em>Sense on Cents</em> entitles it, this <a href="">Wall Street-Washington Incest</a>, has gone on for a long time. That fact leads me to ask the following question:</p> <p>1. Who is backing the &lsquo;Occupy Wall Street&rsquo; movement?<br /> 2. Who is looking to profit politically from the civil unrest centered in this movement?<br /> 3. Is there any doubt that this movement is promoting class warfare?</p> <p><strong>Wake Up, America!!</strong> The fact is politicians from both sides of the aisle have largely sold us down the river while they themselves have willingly and lavishly fed at the trough provided by Wall Street. You don&rsquo;t think so. Then I ask you the following questions and am happy to provide links to stories and materials supporting this premise.</p> <p>1. What is the nature of President Barack Obama&rsquo;s relationship with Franklin Raines and <a class="hidden_link" href="">James Johnson</a>, the executives who effectively plundered <a class="hidden_link" href="">Fannie Mae</a>? Read on&hellip;..<a href=""><em>Sense on Cents</em>/Franklin Raines</a>, <a href=""><em>Sense on Cents</em>/James Johnson</a></p> <p>2. Who encouraged Washington to &lsquo;roll the dice&rsquo; on sub-prime mortgage originations and was engaged in a deep relationship&mdash;literally and figuratively&mdash;with those at Freddie and Fannie? None other than Barney Frank. Read on&hellip;.<em><a href="">Sense on Cents</a></em><a href="">/Barney Frank</a></p> <p>3. Who really regulates Wall Street? Merely the <a class="hidden_link" href="">SEC</a>? Do not be so naive. Wall Street to a very large extent is a self-regulated industry. The SRO is an entity known as the Financial Industry Regulatory Authority (FINRA). How is it that President Obama appointed <a class="hidden_link" href="">Mary Schapiro</a>, the former head of FINRA, to resurrect the SEC? Does it look like a revolving door to you? It does to me. Especially when you learn that the new head of FINRA, Richard Ketchum, came from&hellip;.you guessed it&hellip;the SEC. <strong>You do not have insiders clean up a mess unless you prefer to keep things quiet</strong>. Read on&hellip;..<em><a href="">Sense on Cents</a></em><a href="">/FINRA</a>&hellip;&hellip;&hellip;<em><a href="">Sense on Cents</a></em><a href="">/Mary Schapiro</a>&hellip;.</p> <p>4. Might you be interested in learning about what I have defined as the greatest scandal on Wall Street? Madoff, right? Nope. <a class="hidden_link" href="">Allen Stanford</a>, of course, right? Also wrong. Wall Street CDOs? Three strikes. You&rsquo;re out.</p> <p>In my humble opinion, Wall Street&rsquo;s greatest scandal perpetrated on tens of thousands of ordinary, average, everyday Americans is encompassed in a market segment known as auction-rate securities. These supposed &lsquo;cash equivalent&rsquo; securities were blatantly misrepresented by Wall Street. Going on more than three full years tens of thousands of our fellow citizens are still unable to access their cash. How much cash? Try somewhere to the tune of $100 BILLION. Those in Washington have done little to help our fellow citizens retrieve their cash compared to state regulators. Read on&hellip;..<em><a href="">Sense on Cents</a></em><a href="">/Auction-Rate Securities</a></p> <p>5. Last but not least, while many a politician on the left side of the aisle will clearly look to profit politically from the discontent centered in the &lsquo;Occupy Wall Street&rdquo; movement, I exhort people to review the campaign contributions of none other than Senator <a class="hidden_link" href="">Chuck Schumer</a> (D-NY), Senator John Kerry (D-MA), former Senator Chris Dodd (D-CT), and many more.</p> <p>I define people who have lined their pockets with Wall Street money on the one hand only to join forces with those who would rail on Wall Street with the other as <strong>FAKERS</strong>!!</p> <p>I am a registered Independent. My allegiance is to our nation and the virtues of truth, transparency, and integrity. &nbsp;As a Wall Street veteran I make no excuses for bad practices within the financial industry. The fact is, though, in order for our country to move forward we need a healthy Wall Street which can provide the needed capital to drive business and job growth.</p> <p>I do not believe that those who have compromised themselves in the past by engaging in what I define as Wall Street-Washington incest &nbsp;are capable or qualified to lead our nation. I hope the extensive links provided here along with other written work compiled over the last three years will help direct the focus appropriately.</p> <p>Navigate accordingly.</p> <p>Questions, comments, constructive criticisms always encouraged and appreciated.</p> <p>Larry Doyle</p> <p><strong>Isn&rsquo;t it time to &nbsp;subscribe to all my work via&nbsp;<a href=";loc=en_US">e-mail</a>, an&nbsp;<a href="">RSS feed</a>, on&nbsp;<a href="">Twitter</a> or&nbsp;<a href="">Facebook</a>?</strong> <strong>Do your friends, family, and colleagues a favor and get them to do the same. Thanks!!</strong></p> <p>I have no affiliation or business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets, our economy, and our political realm so that meaningful investor confidence and investor protection can be achieved.</p> <p><strong>Read more posts on <a href="">Sense on Cents &raquo;</a></strong></p><p><a href="">Join the conversation about this story &#187;</a></p> Black Box Trading, Not Short-Selling Caused The Recent Market Turmoil According To Former Top Regulator Mon, 15 Aug 2011 09:51:29 -0400 Vincent Trivett <p><img style="float:right;" src="" border="0" alt="astor place cube black box" /></p><p></p> <p>Britain's former financial services regulator-in-chief says that the real reason for recent volatility that led to ~$489 billion in losses is so-called "black box" trading.</p> <p>While Spain, France, Belgium, and Italy are banning the often self-fulfilling prophesy of short-selling, Myners says they're ignoring the real problem.&nbsp;</p> <p><a href="">Myners told the Telegraph</a>, "<a class="hidden_link" href="">High-frequency trading</a> appears so detached from the true function of capital markets, but is potentially fraught with hazard. It definitely deserves more attention than either the <a class="hidden_link" href="">Financial Services Authority (FSA)</a> or the Treasury has given it."</p> <p>He says "black boxes" are computer algorithms that make instantaneous trading decisions that human traders don't even have to be fully aware of. Computers that are capable of monitoring several markets simultaneously can instantly identify trends and seize upon a fleeting pattern faster than a human being can assess the value of a trade.</p> <p>Myner's warnings are not new.&nbsp; High-frequency trading has been blamed for the stock market crash of 1987 and the flash-crash of 2010. And last week, people started <a href="">blaming it for the recent market turmoil</a>.</p> <p>HFT accounts for about half of trades in London and almost three quarters of transactions in New York.</p><p><a href="">Join the conversation about this story &#187;</a></p> Jamie Dimon VS Ben Bernanke II Is Happening Tomorrow (JPM) Tue, 09 Aug 2011 14:46:00 -0400 Courtney Comstock <p><img style="float:right;" src="" border="0" alt="dimon-cnbc-jamie" /></p><p><a href="" class="hidden_link">Jamie Dimon</a> just told <a href="" class="hidden_link">Melissa Francis</a> on C<a href="" class="hidden_link">NBC</a> that on Wednesday, he'll comment extensively on the implications of regulations on business.</p> <p>This is exciting. The last time Dimon commented on regulations, he did it in front of <a href="" class="hidden_link">Ben Bernanke</a> during a public press conference. Some said it was like <a href="">Dimon ambushed Bernanke</a>&nbsp;to say that regulations are slowing the recovery.</p> <p>Obviously this time will be different because 1) Dimon's comments will follow <a href="">Bernanke's statement</a> Tuesday and 2) he's giving a heads up.</p> <p>But based on what Dimon just told <a href="" class="hidden_link">CNBC</a> -</p> <p>"I will comment [Wednesday] on some of the regulatory things that I think are part of the problem and are causing some of the tightening taking place."</p> <p>It seems that Dimon's regulatory concerns have not been alleviated.&nbsp;</p> <p>But of course that's not surprising because nothing has changed regulation-wise.&nbsp;Banks are still concerned about capital surcharges hurting their ability to loan to small businesses, for example.&nbsp;</p> <p>And the <a href="">question Dimon asked Ben Bernanke</a> in June is still relevant:</p> <p>"Has anyone looked cumulative effect of all these regulations, and could they be reason it's taking so long for credit and jobs to come back?"</p> <p>So expect Dimon to comment again about regulations hurting business growth and killing jobs. It's happening Wednesday at 11 AM on The Call on C<a href="" class="hidden_link">NBC</a>.&nbsp;</p> <p>Dimon spoke to Francis as the JPMorgan CEO is on the West Coast visiting Chase branches on a bus tour.</p> <p>He also said, "I don't think we should be waiting for someone [Bernanke] to come save the day." &nbsp;(<a href="">He didn't</a>.)</p> <p>"The U.S. economy is still very strong."&nbsp;</p><p><a href="">Join the conversation about this story &#187;</a></p>