Tax concerns jeopardise US financial reform effort

Members of Congress are revising an agreement on reform of the US financial sector after Republicans objected to a tax on large financial institutions.

After a marathon 19-hour negotiating session by House and Senate legislators on Thursday, Democrats were confident their bill would pass both chambers.

But Republican Senator Scott Brown now says he will withdraw his support if his concerns over the tax are not met.

The bill would bring the biggest change to financial regulation in decades.

The reforms are intended to impose strict limits on banks' ability to take risky speculative bets on markets.

The legislation had been expected to pass both chambers of Congress this week in time for President Barack Obama to sign it into law by 4 July.

But without Mr Brown, Democrats have no Republican votes for the package in the Senate - and with the death of Senator Robert Byrd on Monday, they are two votes shy of the 60 required for passage.

Mr Brown said on Tuesday he would no longer back the bill if his concerns over the $17.9bn (£11.9bn) tax on large financial institutions were not addressed.

The tax, which helps finance the bill, was included during Thursday's all-night negotiating session.

Senate Finance Committee Chairman Chris Dodd has said he is assessing alternatives to the tax.

One option under consideration is to put an early end to the Troubled Asset Relief Program (TARP) - often referred to as "the bank bailout" - to help offset the bill's price tag.

White House spokesman Robert Gibbs told reporters on Tuesday that if the controversial tax was stripped from the bill, it could still be pursued as a separate piece of legislation.

Ten US banks fail recession test

May 8 2009

US banks would need a total of £50 billion in additional funds to survive if the recession deepens, the results of government "stress tests" showed.

An assessment of the robustness of the sector found that 10 of the 19 largest banks would need to find extra capital to see them through the bad times.

Bank of America faces the largest potential shortfall of £23 billion.

It joined a list of institutions that also includes Citigroup and Wells Fargo.

The stress tests were designed to gauge whether America's 19 largest banks have enough capital to see them through a deepening of the recession.

After Bank of America, Wells Fargo was found to have the second largest shortfall of £9.1 billion, followed by GMAC with a potential £7.6 billion black hole.

Ten US banks fail recession test

May 8 2009

US banks would need a total of £50 billion in additional funds to survive if the recession deepens, the results of government "stress tests" showed.

An assessment of the robustness of the sector found that 10 of the 19 largest banks would need to find extra capital to see them through the bad times.

Bank of America faces the largest potential shortfall of £23 billion.

It joined a list of institutions that also includes Citigroup and Wells Fargo.

The stress tests were designed to gauge whether America's 19 largest banks have enough capital to see them through a deepening of the recession.

After Bank of America, Wells Fargo was found to have the second largest shortfall of £9.1 billion, followed by GMAC with a potential £7.6 billion black hole.

Citigroup is being asked to raise an additional £3.3 billion to make it secure. Goldman Sachs, JP Morgan Chase and American Express were among the nine banks deemed not to need to raise additional funds.

The stress tests were designed to help regulators assess the ongoing financial stability of US banks.

They look at two models of the economy going forward - one in which unemployment reaches 8.8% next year and house prices drop a further 14%. In the second scenario, joblessness rises to 10.3% and property slips another 22%.

Banks facing a shortfall under the model will have to come up with a plan to raise additional capital by mid June.

 If they cannot do so independently, they may have to turn to the government's £466 billion financial bailout fund.

sourced from Runcorn and Widnes Weekly News

Indicators of economic depression ending-- Google searches vs. job losses

read the full article at examiner.com

Larry Summers, Obama's top economic advisor has summed up the state of the economy today in what Forbes online is calling "promising", but somewhat "obscure" signs of recovery.

 

The Job Impact of the American Recovery and Reinvestment Plan

• "Earlier this year traders were betting there was a one-in-six chance that the Dow would fall below 5,000, he said. Now they say it's one-in-a-hundred.


• The chances that corporate bonds will default has fallen by a third.


• And Google searches for 'economic depression,' which surged to quadruple their normal levels, have since returned to normal. (A growing number of economists do believe that the recession has ended or will end in coming months.)"

read the full article at  examiner.com

Indicators of economic depression ending-- Google searches vs. job losses

read the full article at examiner.com

Larry Summers, Obama's top economic advisor has summed up the state of the economy today in what Forbes online is calling "promising", but somewhat "obscure" signs of recovery.

 

The Job Impact of the American Recovery and Reinvestment Plan

• "Earlier this year traders were betting there was a one-in-six chance that the Dow would fall below 5,000, he said. Now they say it's one-in-a-hundred.


• The chances that corporate bonds will default has fallen by a third.


• And Google searches for 'economic depression,' which surged to quadruple their normal levels, have since returned to normal. (A growing number of economists do believe that the recession has ended or will end in coming months.)"

read the full article at  examiner.com

Obama calls for G20 joint action

US President Barack Obama has said that countries must take concerted action to spur global economic growth.

 

President Obama called for both stimulus and regulatory reforms

 

President Obama was speaking ahead of this weekend's meeting of G20 finance ministers in West Sussex near London.

He said the US had two goals at the G20 - to ensure joint action to jump-start economies and to move forward on a regulatory reform agenda.

He added that he was optimistic about the meeting's prospects. "We are in this together," he said.

Earlier, UK Chancellor Alistair Darling had also called for co-ordinated global action.

"We must work together not as a small group of advanced economies but globally, including the emerging and developing economies," he told reporters in London.

Growing rift

The finance ministers meet ahead of the main G20 summit of world leaders in London on 2 April.

 

It's very important to make sure that other countries are moving in the same direction, because the global economy is all tied together  US President Barack Obama Darling urges global co-operation

President Obama's comments came amid reports of a growing rift between the US and Europe over the G20 in recent weeks.

Washington has been calling for more spending plans, while most European leaders have been pressing for increased global regulation of the financial system.

Speaking at a meeting in the Oval Office with Treasury Secretary Timothy Geithner, Mr Obama said the $787bn stimulus package he signed into law last month was "doing a good job" stimulating the US economy.

He added: "It's very important for the American people to understand that, as aggressive as the actions we are taking have been so far, it's very important to make sure that other countries are moving in the same direction, because the global economy is all tied together."

On Tuesday the head of the US Federal Reserve, Ben Bernanke, also called for the revamping of the global system of financial regulation.

sourced from The BBC

Obama calls for G20 joint action

US President Barack Obama has said that countries must take concerted action to spur global economic growth.

 

President Obama called for both stimulus and regulatory reforms

 

President Obama was speaking ahead of this weekend's meeting of G20 finance ministers in West Sussex near London.

He said the US had two goals at the G20 - to ensure joint action to jump-start economies and to move forward on a regulatory reform agenda.

He added that he was optimistic about the meeting's prospects. "We are in this together," he said.

Earlier, UK Chancellor Alistair Darling had also called for co-ordinated global action.

"We must work together not as a small group of advanced economies but globally, including the emerging and developing economies," he told reporters in London.

Growing rift

The finance ministers meet ahead of the main G20 summit of world leaders in London on 2 April.

 

It's very important to make sure that other countries are moving in the same direction, because the global economy is all tied together  US President Barack Obama Darling urges global co-operation

President Obama's comments came amid reports of a growing rift between the US and Europe over the G20 in recent weeks.

Washington has been calling for more spending plans, while most European leaders have been pressing for increased global regulation of the financial system.

Speaking at a meeting in the Oval Office with Treasury Secretary Timothy Geithner, Mr Obama said the $787bn stimulus package he signed into law last month was "doing a good job" stimulating the US economy.

He added: "It's very important for the American people to understand that, as aggressive as the actions we are taking have been so far, it's very important to make sure that other countries are moving in the same direction, because the global economy is all tied together."

On Tuesday the head of the US Federal Reserve, Ben Bernanke, also called for the revamping of the global system of financial regulation.

sourced from The BBC

Brown under siege as Congress caps bankers' bonuses

A dramatic vote on Capitol Hill is set to bring major change to Wall Street's risk culture as cash incentives for executives, brokers and traders are limited to a third of their salaries. Gaby Hinsliff, Zoe Wood and Paul Harris report on the implications for Britain.

Gordon Brown was under rising pressure to clamp down on the City's bonus culture last night after the US Congress agreed to drastic curbs capping senior bankers' bonuses at a third of their salary.

The measures, which are expected to be signed into law by President Barack Obama (Barack Obama page on the Guardin website) this week, would apply to dozens of staff at American banks bailed out by the taxpayer and could cost Wall Street's wealthiest millions. Cash bonuses would be banned in favour of long-term share options, with the restrictions extending beyond a handful of top executives to senior brokers and traders.

read full article from The Gardian

Brown under siege as Congress caps bankers' bonuses

A dramatic vote on Capitol Hill is set to bring major change to Wall Street's risk culture as cash incentives for executives, brokers and traders are limited to a third of their salaries. Gaby Hinsliff, Zoe Wood and Paul Harris report on the implications for Britain.

Gordon Brown was under rising pressure to clamp down on the City's bonus culture last night after the US Congress agreed to drastic curbs capping senior bankers' bonuses at a third of their salary.

The measures, which are expected to be signed into law by President Barack Obama (Barack Obama page on the Guardin website) this week, would apply to dozens of staff at American banks bailed out by the taxpayer and could cost Wall Street's wealthiest millions. Cash bonuses would be banned in favour of long-term share options, with the restrictions extending beyond a handful of top executives to senior brokers and traders.

read full article from The Gardian