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• Tuesday, 22 May 2012

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• July 2014 Compliance for Volcker Rule - 20 April 2012

Named for former United States Federal Reserve Chairman Paul Volcker, the Volcker Rule forms part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, designed to prevent banks in the US from making speculative investments that would not be in the best interests of their customers. The Dodd-Frank Act stipulated a 2014 compliance deadline, but some of the law's fine print relating to the Volcker Rule appeared open to interpretation, prompting bank officials to request clarification from financial regulators. The clarification came yesterday in the form of an announcement that Wall Street need not comply immediately with the Volcker Rule banning banks from trading with their own money.

• Stocks Rally on Fed's Resolve to Aid Economic Recovery - 3 November 2011

The first two days of the week saw Wall Street markets declining significantly, with a noteworthy recovery occurring on Wednesday afternoon. The latest policy statement from the Federal Reserve, backed up by positive remarks from Fed Chairman Ben Bernanke, indicate a commitment from authorities to continue to assist the US economy in its recovery efforts. The Dow Jones industrial average climbed by 178 points, with the S&P 500 rising by 20 points, and the Nasdaq composite surging 33 points, being 1.5 percent, 1.6 percent and 1.3 percent respectively.

• Moral Hazard – Part 2 - 30 December 2010

While there are many reasons behind the current economic crisis, the term 'moral hazard' has been applied to risky decision making actions by lenders which led to the chaos in large financial institutions, referred to as the US subprime mortgage crisis, or the 2007-2010 financial crisis. It appears that the whole too-big-to-fail mindset may have resulted in extreme leniency when assessing the ability of borrowers to repay their loans – to the detriment of both lenders and borrowers. A number of financial giants took a tumble, with some being bailed out with government/taxpayers money and others being taken over by previous competitors, shifting at least part of the burden of bad decision making elsewhere.

• The Office of Thrift Supervision - 25 March 2010

For millions of US citizens the image of the ‘American Dream’ includes a home of their own, and in the past eighteen months or so that has become a thing of the past for many who owned homes, and a seemingly unreachable goal for would-be homeowners. One of the agencies charged with regulating financial institutions who offer US citizens the possibility of owning a home, is the Office of Thrift Supervision. Stated on its website: "The OTS supervises a national thrift industry that is built on the bedrock of the American dream of homeownership – supplying affordable home financing for Americans from all walks of life." While this sounds great in theory, is it working?

• BCBS and the Basel II Accord - 18 February 2010

Created in 1974 by the G10 nations, and meeting four times each year, the Basel Committee on Banking Supervision (BCBS) consists of representatives from 27 countries who gather to formulate and analyze broad-based standards and guidelines for efficient and transparent banking supervision. The name of the committee is taken from the name of the city in Switzerland that hosts committee meetings. For the recommendations to carry any weight, each member country needs to implement these standards through its national system, and while adjustments may need to be made to suit local circumstances, the core values of these recommendations should remain as a solid foundation. This will ensures that the purpose of the committee in supporting the implementation of common approaches and standards for banking by member countries will be realized.

• Wall Street Cautious Ahead of Wednesday’s Fed Report - 11 August 2009

While private sector economists are beginning to express confidence that the end of the recession may very well be in sight for the US, they also acknowledge that economists and policymakers at the Federal Reserve may not share this viewpoint as they meet on Tuesday and Wednesday this week to review the state of the country's economy and other related matters. It is likely that Wall Street will remain cautious ahead of the preliminary report-back from the Fed on Wednesday, although many are of the opinion that signs of economic recovery will start to become evident before the end of the year, and even possibly by the end of the third quarter in September.

• Investors Ponder Housing Market, Regulatory Restructuring and Inflation/Deflation Fears - 24 June 2009

Monday saw stocks fall to a three-week low on Wall Street, mostly due to the World Bank's dismal outlook on the global economy growth. The better than expected housing market report slowed the decline on Tuesday, but failed to regain losses entirely and the day drew to a close with the Dow Jones industrial average falling 0.2 percent, the Nasdaq composite remaining virtually unchanged and the Standard & Poor's 500 managing a 0.2 percent gain. Prior to the losses recorded over the past week or so, markets had enjoyed a 14 week rally, primarily fuelled by optimism that the economy was on the road to recovery - a viewpoint which now appears to have been premature, or overly optimistic.