Volcker Rule faces protests of local, foreign governments

From: Washington Post

By Zachary A. Goldfarb and Howard Schneider

 new federal rule aimed at limiting the freewheeling trading of banks is prompting protests from local and foreign governments alike, which warn it could compromise their ability to borrow money needed to pay for public projects and operations.

States and localities — including in the Washington area — say the new regulation, known as the Volcker Rule, could make it more expensive for them to raise money from investors to pay, for instance, for environmental clean up and housing assistance. European governments warn the regulation could further aggravate their debt crisis, which is already roiling global financial markets.

Fed Writes Sweeping Rules From Behind Closed Doors

From: WSJ


The Federal Reserve has operated almost entirely behind closed doors as it rewrites the rule book governing the U.S. financial system, a stark contrast with its push for transparency in its interest-rate policies and emergency-lending programs.

While many Americans may not realize it, the Fed has taken on a much larger regulatory role than at any time in history. Since the Dodd-Frank financial overhaul became law in July 2010, the Fed has held 47 separate votes on financial regulations, and scores more are coming. In the process it is reshaping the U.S. financial industry by directing banks on how much capital they must hold, what kind of trading they can engage in and what kind of fees they can charge retailers on debit-card transactions.

Financial Regulation Of Derivatives Could Be Handled Like Drug Approvals, Experts Say

From:  Huffington Post

Are exotic financial derivatives as risky as untested prescription drugs? Two University of Chicago economists say possibly. As noted by economist Steve Levitt in his Freakonomics blog, professors Eric Posner and Glen Weyl proposed in a recent white paper the creation of a regulatory body that could prescreen financial products — like the subprime-asset stuffed securities that nearly brought down the U.S. economy — before they’re sold to other banks or investors. In other words, an FDA for CDOs.

The Federal Reserve and the Economic Recovery

Presentation to the Bishop Ranch Forum
San Ramon, California
By John C. Williams, President and CEO, Federal Reserve Bank of
San Francisco
For delivery on Feb. 8, 2012
Download PDF Version (34KB)

President Williams presented similar remarks to The Columbian’s 2012 Economic Forecast Breakfast in Vancouver, Washington, on January 10, 2012.

The Federal Reserve and the Economic Recovery

Good morning. I want to thank Alex and all of you for coming to the forum this morning. I get to travel all over the world to give talks, but I’ll admit it’s nice to be able to just jump in my car and not have to go through airport security and delays to be with you today.

New “Man in the Browser” Attack Bypasses Banks’ Two-Factor Authentication Systems

From: Gizmodo

The banking industry often employs two-step security measures—similar to Google Authenticator—as an added layer of protection against password theft and fraud. Unfortunately, those systems have just been rendered moot by a highly-advanced hack.

The attack, know as the Man in the Browser method, works like this. Malicious code is first introduced onto the victim’s computer where it resides in the web browser. It will lay dormant until the victim visits a specific website—in this case, his bank’s secure website. Once the user attempts to log in, the malware activates and runs between the victim and the actual website. Often the malware will request that the victim enter his password or other security pass into an unauthorized field, in order to “train a new security system.” Once that happens, the attacker has full access to the account.