The Federal Financial Forum

(Reuters) – Former U.S. Federal Reserve Chairman Paul Volcker is advocating for regulatory control over the money-market mutual fund industry and believes the government should stop financing mortgages.

Volcker said in a recent speech that money market funds have exacerbated stress in the financial markets because they pulled back on short-term lending to European banks.

If money-market funds are to continue providing significant funding to regulated banks, they should be subject to capital requirements, deposit insurance protection and stronger oversight of their investments, Volcker said.

From: Reuters 

* Seeks comments by Dec. 16

* Comments will feed into reform report due in January

* Opinions sought on switch to federal regulation

Oct 17 (Reuters) – The Federal Insurance Office on Monday opened public commentary on a report on modernizing insurance regulation that is being closely watched by the industry for any move away from state oversight and toward federal control.

The FIO report, mandated by the Dodd-Frank financial reform bill, is due by the end of January. At an industry conference in New York last month, current and former regulators said they would not be surprised if the report were delayed, though.

From: NYT

WASHINGTON — Financial companies that are not banks but have more than $50 billion in assets and $20 billion in debt could be regulated by the Federal Reserve and required to meet tougher standards, according to a proposed rule issued Tuesday by the nation’s top financial regulatory board.

The Financial Stability Oversight Council voted unanimously to seek public comment on a proposed rule that laid out the standards by which insurance companies, hedge funds, asset managers and the like could fall under stricter regulation.

Editor’s Note:  Debit card interchange price controls are resulting in a transfer of wealth from consumers to retailers.  Proposals to extend price controls to credit card interchange should be treated with great caution.

From: The Hill

Retailers won that battle when the Federal Reserve stepped in with new rules that limit the fees that banks can charge for debit card transactions. 

Katherine Lugar, executive vice president of public affairs for the Retail Industry Leaders Association, said her trade group plans to be just as active lobbying against the credit card interchange fees, which retail lobbyists say generate about $30 billion per year for banks and card providers.