Finance Space

There is a debate taking place in Washington about whether we will hold Wall Street accountable and protect consumers.

America has endured a financial crisis as dire as any we’ve known in generations.

It nearly dragged our economy into a second Great Depression. It forced taxpayers to foot the bill for irresponsible practices on Wall Street. And it helped lead to the loss of trillions of dollars in family savings and more than 8 million jobs across America.

Yet two years since the height of this financial crisis, the same system of rules and oversight remains in place. And the status quo means our economy — and taxpayers — remain vulnerable to another disaster.

US Senate Banking Committee Chairman Chris Dodd made a last-minute amendment to a massive financial overhaul bill to resolve a dispute over derivatives.

The Democrat’s measure would postpone any action on the complex financial instruments for two years so it can be studied by a new council of regulators headed by Treasury Secretary Timothy Geithner.

Derivatives are blamed for overheated speculation that fueled the global financial collapse of 2008.

Dodd’s move sought to overcome a major outstanding issue on Wall Street reform, as the US Senate set the stage for a final vote as early as this week on the overall financial legislation.

Banks would be barred from high-risk speculative trading under a measure that has an “extremely good” chance of becoming law, Democratic U.S. Senator Carl Levin said on Monday.

The measure also would require large nonbank institutions to set aside additional capital to cover the risks of speculative activity, and prohibit financial firms from betting against their customers.

It would toughen a sweeping rewrite of financial regulations currently being debated in the Senate.

Levin and fellow Democratic Senator Jeff Merkley said their proposal has wide support among Democrats, in particular Banking Committee Chairman Christopher Dodd, who is overseeing the legislation.

The rating agencies that sort good investments from junk are once again injecting fear into financial markets. Only this time it’s for warning investors about a possible threat — Europe’s debt crisis — rather than for failing to see one coming.

Why do their words carry so much weight?

These are the same firms that gave safe ratings to high-risk U.S. mortgage investments that later imploded and caused the financial crisis. Those failures raised doubts about how much the assessments of rating agencies like Standard & Poor’s, Moody’s Corp. and Fitch Ratings are really worth.

Senate Republicans voted to block a bill aimed at tightening regulation of the financial system from being debated yesterday, in a move President Barack Obama said American people “can’t afford”.

The Democrats needed 60 votes from the 100 senators in the house to begin debating the bill, which proposes a government levy on big banks, changes to rules on derivatives trading and the establishment of a consumer financial protection agency.

The White House officially endorsed the bill before the vote, and had been hoping that the $1bn (£650m) fraud prosecution of Goldman Sachs would give fresh wind to anti-Wall Street sentiment, making the case for accepting the proposals unavoidable.

Federal law enforcement agencies have begun a criminal investigation of the use of credit cards issued by the Republican Party of Florida to elected officials and staff members, according to sources familiar with the inquiry.

The U.S. attorney’s office in Tallahassee, the FBI and the Internal Revenue Service are involved in the probe. It grew out of a state investigation of former Florida House speaker Ray Sansom, who was indicted on criminal charges that he stashed $6 million in the state budget for an airplane hangar for a friend and campaign donor.

Wells Fargo & Co. said Wednesday that its first quarter profit fell on costs to integrate the acquired Wachovia and rising provisions.

The firm said some operating metrics improved and that credit issues appear to have “turned the corner.”

Wells said Wednesday that it earned $2.55 billion, or 45 cents a share in the quarter, compared to $3.05 billion, or 56 cents a share a year ago.

Wells was expected to make 42 cents a share, according to the average estimate of 20 analysts polled by FactSet. Forecasts ranged from 20 cents to 51 cents a share.

U.S. President Barack Obama accused opposition Republicans on Saturday of spreading misinformation about a Democratic bill that aims to tighten oversight of Wall Street banks and their practices.

With debate heating up in Washington about reforming the financial rules, regulators charged Wall Street giant Goldman Sachs with fraud on Friday.

Bank shares and the broader stock market fell on fears the civil lawsuit could make it more difficult for the financial industry to ward off reform.

After successfully shepherding his healthcare overhaul through Congress, Obama is pushing for victory on the financial regulatory reforms – a popular issue with voters in the run-up to congressional elections in November after a financial meltdown sparked the worst U.S. recession in decades.

Barack Obama on Thursday takes his campaign against Wall Street ‘irresponsibility’ to New York, the epicentre of US high finance, as he seeks to swiftly drive regulatory reform into law.

The president will touch down for just a few hours in central Manhattan, to give a speech aimed at Americans in the heartland, finance barons in their sleek corporate headquarters, and Republican lawmakers back in Washington.

President Obama was expected to lay out a case for reforming risky and bloated Wall Street practices, to Americans still trapped in a tough economic climate, and to implore big financial firms to join, not block his overhaul.

Americans are about evenly divided on the merits of giving the federal government new powers to regulate large banks and major financial institutions; however, they offer greater support when the issue is more specifically framed as regulating “Wall Street banks.”

When Wall Street is not mentioned, net public support (percentage in favor minus percentage opposed) for banking reform legislation is +3 points, but when it is mentioned, net support is +14.

Gallup measured support for enhanced federal regulation of banking using both wordings in its April 17-18 Daily tracking. A random half-sample of respondents was asked the “Wall Street” wording; the other half was asked about banks and major financial institutions, generally.