SIFMA: News on the capital markets, securities and financial industry

14/11/2011 | SIFMA

Cities, states spend bond money on unrelated projects
Cities and states are using money raised through bond sales for specific projects to pay other bills, according to records and public officials. That could expose the governments to lawsuits. The Securities and Exchange Commission is investigating. The Wall Street Journal (tiered subscription model)(11/14)

Concerns grow about banks' efforts to meet Basel III
Regulators are concerned that banks worldwide are engaging in risk-weighted asset optimization to meet Basel III capital requirements. Financial Times(tiered subscription model)(11/13)

Barclays calls for overhaul of complex accounting rules
Barclays Finance Director Chris Lucas suggested that fair-value accounting rules be changed because they allow banks to artificially increase profits. "It makes results difficult to explain to investors and is unhelpful for an industry that wants to rebuild confidence through transparency in financial reporting," Lucas wrote in a letter to the Financial Times. Financial Times (tiered subscription model)(11/14), Reuters(11/14)

  • Other News

Muni bond issuance expected to reach $12 billion this week
The Bond Buyer (free content) (11/14)

Muni bond default is still rare, BlackRock analysts say
Barron's (free content)/Income Investing blog (11/11)

Commentary: Financial-transaction tax is the wrong move
Barron's (subscription required) (11/12)

  Washington Roundup  
  

SEC takes aim at fund industry's use of derivatives
The Securities and Exchange Commission is considering disclosure requirements and restrictions on the fund industry's use of derivatives. State Street Global Advisors, BlackRock and other investment companies defend their use of derivatives in letters submitted to the SEC. "Any set of mechanical rules cannot take account of the diversity of derivatives and the multiplicity of ways they may be used by portfolio managers," wrote Joanne Medero and Ira Shapiro, managing directors at BlackRock. "Used appropriately, derivatives can be effective tools in seeking to achieve returns and control risks in funds." The Wall Street Journal (tiered subscription model)(11/12), Bloomberg(11/10)

N.Y. Fed Bank rejects speculation about primary dealer requirements
The collapse of MF Global prompted speculation that the Federal Reserve Bank of New York might raise capital requirements for primary dealers, but the bank denied it. Financial Times(tiered subscription model)(11/11)

Lawmakers take steps toward the launch of covered bonds
Legislation introduced in the Senate would help establish a U.S. covered bond market. "The introduction of the Senate bill with bipartisan support is a significant event and acknowledges the importance of encouraging private sources of capital back into the U.S. housing finance market," said Riz Sheikh of Barclays Capital. Financial News Online (U.K.) (subscription required)(11/11)

Commentary: Debt panel needs to think big
Forty Republican and 60 Democratic House members urged the congressional Joint Select Committee on Deficit Reduction to go beyond its mandate and reduce the deficit by $4 trillion over the next decade. The original target was a reduction of $1.2 trillion. However, those lawmakers have "no leverage, no power and no new ideas," Thomas G. Donlan writes. Barron's (subscription required)(11/12)