The Federal Financial Forum

WASHINGTON (AP) – To the chagrin of consumer groups, the House gave overwhelming bipartisan approval Monday to two bills easing requirements that President Barack Obama’s overhaul of financial regulations impose on some exotic financial instruments blamed for helping trigger the 2008 financial crisis.

Lawmakers of both parties said they were relaxing rules that would otherwise inhibit the ability of companies to manage the risks of prices and investments, ultimately reducing their profitability and job creation. Consumer groups said legislators were bowing to the interests of their corporate and finance-world contributors and taking steps that might prove harmful to the public.

In the attached letter to OMB, Commissioner O’ Malia of the CFTC has requested OMB review of a Commission’s regulation.

OMB not only has the constitutional authority to conduct such a review but in a number of instances Congress has passed specific legislation that directs OMB review of the regulations of independent agencies. To this end CRE has written a step-by-step method to guide OMB is the discharge of its responsibilities.

The essence of the CRE approach is:

Proposed CRE Program for OMB Review of Independent Agency Regulations . . . . .

(Reuters) – The Federal Reserve will try to make it clearer whether new banking rules apply to small lenders, Federal Reserve Chairman Ben Bernanke said in remarks on Wednesday.

Bernanke said the goal is to prevent community banks from wasting time and money trying to figure out if a new regulation applies to them.

“Although this change seems relatively simple, we hope it will help banks avoid allocating precious resources to poring over supervisory guidance that does not apply to them,” Bernanke said in a video message to an Independent Community Bankers of America conference in Nashville, Tennessee.

(Reuters) – The Volcker rule crackdown on banks’ trading activities could affect the liquidity of sovereign debt markets, a top Bank of Japan official warned U.S. regulators on Monday.

Liquidity could be hit if the Volcker rule does not exempt foreign debt from banks’ trading restrictions, Kiyohiko Nishimura, the Bank of Japan’s deputy governor said at the Institute of International Bankers conference in Washington.

U.S. regulators are under pressure to craft the Volcker rule so that it does not restrict trading in countries’ foreign debt. The Dodd-Frank law, enacted in response to the 2007-09 financial crisis, provides an exemption for trades in U.S. debt but not securities issued by other countries.