Regulatory Budgets Tight, U.S. Banks Fear Losses in Europe

REGULATORY BUDGETS TIGHT – NYT’s Ben Protess on pg. B1: “[E]ven after receiving budget increases from Congress last month, regulators are still falling behind. The [SEC] and the [CFTC] are struggling to fill crucial jobs, enforce new rules, upgrade market surveillance technology and pay for travel. On a recent trip to New York to tour a trading floor, a group of employees from the commodities watchdog rode Mega Bus both ways, arriving late to their meeting despite a 5:30 a.m. departure. The bus, which cost $30 a person round trip, saved the agency roughly $1,000 over Amtrak. … Their budgets may soon be even tighter, with Republicans looking to cut the regulators’ spending beginning Oct. 1, the start of the government’s fiscal year.”

U.S. BANKS FEAR LOSSES IN EUROPE – FT’s Tom Braithwaite in Washington and Justin Baer and Aline van Duyn in New York on second front: “Wall Street banks are warning they may have to cede much of the European derivatives market to the likes of Deutsche Bank and Barclays … if US regulators follow through on proposals to apply new regulations extraterritorially. The [Fed] and other banking regulators recently proposed rules that would force the non-US arms of US banks to collect collateral, or ‘margin’; in the form of cash or securities, “without regard to whether the counterparty is located inside or outside the United States’. Four banks, who would not talk publicly, said it was the first inkling that US regulators wanted to enforce the Dodd-Frank Act beyond US shores.”


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