Lawmakers Reach Accord On Finance Rules (WSJ)
Lawmakers agreed to a provision known as the "Volcker" rule, which prohibits banks from making risky bets with their own funds. To win support from Sen. Scott Brown (R., Mass.), Democrats agreed to allow financial companies to make limited investments in areas such as hedge funds and private-equity funds. The move could require some big banks to spin off divisions, known as proprietary-trading desks, which make bets with the firms' money. The bill also includes a provision, authored by Sen. Blanche Lincoln, which would limit the ability of federally insured banks to trade derivatives. This provision almost derailed the bill following vehement objections from New York Democrats. Ms. Lincoln worked out a deal in the early hours of Friday morning that would allow banks to trade interest-rate swaps, certain credit derivatives and others.
Frank Sticks Banks With $20 Billion Tab (Politico)
Barney Frank at 2:52 a.m. moved on to sticking the banks with the $20 billion or so bill to cover the costs of the reform legislation's implementation. The fee would apply to banks with over $50 billion in assets and hedge funds with over $10 billion and would be assessed proportionally based on a bank's size.
Congress Includes Ban On Box Office Trading (HR via Heidi Moore)
An amendment banning the trading of derivatives based on boxoffice results was approved just before 1 a.m. EST on Friday morning. Barney Frank said during a short discussion that while there had been controversy about movie futures, the House conferees were not going to exercise their option to alter the amendment banning movie futures trading.
John Paulson Bullish on US, Denies Subprime Culpability (CNBC)
"We had absolutely zero impact on the mortgage or credit crisis,” he told an audience at the London School of Economics on Wednesday. “Instead, that guilt lies with the mortgage brokers themselves. They only cared about generating fees, they falsified appraisals... this was the sad underbelly of mortgage finance in the US...(w)ithout us, the mortgage market would have existed exactly as it did," Paulson said.
Goldman Sachs Reclaims Top Spot In Global M&A (Reuters)
Haters gonna hate: "Goldman would still like you to believe the firm is run by Gus Levy or John Whitehead, who was famous for saying, 'Put the client first and the firm second.' But now it seems like everybody is a (trading) counterparty," Keevil said.
Liability Questions Loom For BP And Ex-Partners (NYT)
“Other parties besides BP may be responsible for costs and liabilities arising from the oil spill, and we expect those parties to live up to their obligations,” said Tony Hayward, BP’s chief executive, in response to a June 18 statement from one of its partners in the well. That partner, Anadarko Petroleum, has a 25 percent stake in the project, and its joint operating agreement with BP gives it a 25 percent share of the liability, a potentially ruinous amount. On June 18, Anadarko issued a blunt statement intended to distance itself from BP. “The mounting evidence clearly demonstrates that this tragedy was preventable and the direct result of BP’s reckless decisions and actions,” said the company’s chief executive, Jim Hackett. “Frankly, we are shocked,” he said. “BP’s behavior and actions likely represent gross negligence or willful misconduct.”
Is BP Burning Sea Turtles? (Fox)
A boat captain working to rescue sea turtles in the Gulf of Mexico says he has seen BP ships burning sea turtles and other wildlife alive. Captain Mike Ellis said in an interview that the boats are conducting controlled burns to get rid of the oil. "They drag a boom between two shrimp boats and whatever gets caught between the two boats, they circle it up and catch it on fire. Once the turtles are in there, they can’t get out," Ellis said. Ellis said he had to cut short his three-week trip rescuing the turtles because BP quit allowing him access to rescue turtles before the burns. "They're pretty much keeping us from doing what we need to do out there," Ellis said.
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Hedge Fund Regulations Stall In Europe (Reuters)
On Thursday, the parliamentarian leading negotiations with European countries said he had disbanded efforts to reach an agreement this month on rules to clamp down on hedge funds and private equity.