Continue reading Bermuda Readies Itself for New Insurance Regulation in Europe

Bermuda Readies Itself for New Insurance Regulation in Europe originally appeared on BloggingStocks on Mon, 22 Mar 2010 16:00:00 EST. Please see our terms for use of feeds.

It's easy to save the world when you've already taken care of yourself. But, we rely on these mavericks -- the wealthy who realize they can make a difference -- to do what we cannot on our own. So, it comes as a relief that Bill Gates, founder of Microsoft (MSFT) believes executive compensation is still too high.

It's a murky topic, and some forms of regulation, Gates believes, won't help. In a discussion on philanthropy at the 92nd Street Y in Manhattan, where many of the people Gates criticized send their kids for early education, the former CEO and still rich guy cites the $1 million executive salary cap required by law in 1993 as a big mistake. While compensation has to be controlled, he believes this measure backfired and thinks that other, similar efforts are doomed to fail now.

Continue reading Rich still too richly compensated according to richest of them all

Rich still too richly compensated according to richest of them all originally appeared on BloggingStocks on Thu, 12 Nov 2009 15:40:00 EST. Please see our terms for use of feeds.

On Thursday morning, European Union regulators announced the launch of an antitrust probe into U.S. software maker Oracle's (NASDAQ: ORCL) takeover of Sun Microsystems. The regulatory group believes that the deal could lead to higher prices and limited choice for database software. Approval from this group is considered the main stumbling block for the deal, which has cleared the Department of Justice in the United States.

The final decision has a deadline of 90 days, or January 19, 2009. By this date, the European Commission can decide to clear or to block the deal. More often than not, the Commission will force companies to make changes that would eliminate any concerns over antitrust regulations.

Continue reading EU investigating Oracle's bid to buy Sun

EU investigating Oracle's bid to buy Sun originally appeared on BloggingStocks on Thu, 03 Sep 2009 08:15:00 EST. Please see our terms for use of feeds.

Continue reading NYT's Krugman: The financial and economic warning signs were there

NYT's Krugman: The financial and economic warning signs were there originally appeared on BloggingStocks on Thu, 04 Dec 2008 18:15:00 EST. Please see our terms for use of feeds.

During the recent testimony by Fed Chairman Ben Bernanke, Treasury Secretary Hank Paulson and SEC Chairman Christopher Cox, it has become increasingly clear that the Federal Reserve will be forced at least in the near term to extend a financial lifeline to any and all U.S. financial entities that are too big to fail. This refers to entities whose failure cold endanger the U.S. economy and in some cases the global financial markets.

I have learned during my investment career to watch what the Fed does much more than what it says. This has been demonstrated by Chairman Bernanke's extension of the discount window to Fannie Mae and Freddie Mac in recent days despite initial indications by Secretary Paulson to the contrary. Hawkish talk remains just that, not action.

The discount window was initially intended only for regulated banks to prevent a meltdown of the financial system from bank failures. In return for this financial insurance, banks are regulated, including the charging of fees. One can debate the alternatives to such an arrangement. However, this regulatory framework will probably be with us for the foreseeable future.

Continue reading Dear Fed: If it acts like a bank, regulate it like a bank!

Dear Fed: If it acts like a bank, regulate it like a bank! originally appeared on BloggingStocks on Wed, 16 Jul 2008 15:33:00 EST. Please see our terms for use of feeds.

Continue reading Germany's Merkel says Europe should spearhead financial market reform

Germany's Merkel says Europe should spearhead financial market reform originally appeared on BloggingStocks on Wed, 11 Jun 2008 16:09:00 EST. Please see our terms for use of feeds.

Former Fed Chairman Paul Volcker gave testimony today before a Joint Economic Committee of Congress. He addressed the current financial and economic environment and the role of the Federal Reserve.

He discussed how the financial market environment has changed considerably since his tenure as Fed Chairman in the early and mid 1980's. He pointed out that financial institutions like investment banks and hedge funds, whose failure can have tremendous effects on the financial system, are lightly regulated. "Systemically important investment-banking institutions should be regulated and supervised" in a similar manner to commercial banks.

Chairman Volcker stressed the need to update the entire regulatory framework, saying "It's not simply a matter of inexperience or technical failures." He also discussed the need to update regulations on a global basis because of the increasing coordination between world central banks.

Continue reading Fed Chairman Volcker's testimony: Update regulations to reflect the new reality!

Fed Chairman Volcker's testimony: Update regulations to reflect the new reality! originally appeared on BloggingStocks on Wed, 14 May 2008 13:39:00 EST. Please see our terms for use of feeds.

Ellen Frishberg, director of student financial services at Johns Hopkins University, indicated that in her opinion the investigations of lender listing practices are something akin to a witch hunt. She maintained that some schools might be unfairly targeted for investigation by virtue of having put the work into screening to create lists of quality lenders. Frishberg made clear that Hopkins has indeed received solicitations for preferred list placement, which reveals the truth of the problem, but said that Hopkins turns a deaf ear to enticements of this kind.

In an article from The Baltimore Sun she stated, "We have ethics here." Since the time Ms. Frishberg issued that statement, she has resigned from her position with the university after investigation concluded she received some $67,000 in assorted grants and payments from companies she had coincidentally chosen to endorse. So much for ethics.

Continue reading Student loans to get more regulation and more pricey

Student loans to get more regulation and more pricey originally appeared on BloggingStocks on Tue, 05 Jun 2007 17:44:00 EST. Please see our terms for use of feeds.

Well, it looks like the UK's Financial Services Authority is not a fan of private equity. The government agency is concerned that a mega deal will inevitably implode - leaving governments with the tab. Another concern: private equity transactions often lead to layoffs.

As a result, expect more scrutiny from the UK.

This is certainly big news for US private equity players. After all, it is getting tougher to find good deals here. So, why not move overseas? In fact, Europe is certainly ripe for restructuring.

But David Bonderman, who heads the Texas Pacific Group, is not happy about the UK's stance. While he admits there could be problems - it is still not inevitable. He also complained that private equity is being "demonized."

OK, maybe it is. But, Mr. Bonderman is making huge amounts of money from his deals. So, can't he take some criticism? Might it be possible that private equity firms are doing bad deals?

Actually, as private equity firms grow in size, there is a need to get more politically savvy - especially in light of the Dems sweep of the Congress. There is also an investigation - by the Justice Department - of possible antitrust violations of private equity firms.

No doubt, Bonderman is brilliant when it comes to structuring deals. But he definitely needs to get some better coaching when it comes to dealing with US and foreign governments.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Financial Statements.

The Brits talk smack about private equity originally appeared on BloggingStocks on Fri, 10 Nov 2006 16:51:00 EST. Please see our terms for use of feeds.

"I think eBay is great!" one Louisiana state senator told the New York Times. Another smiled broadly while voting for Louisiana Senate Bill 642, which exempted eBay and other internet businesses from law requiring licenses for auctioneers. It's just one indication of eBay's powerful lobbyists, working hard from California to Baton Rouge to make sure its sellers don't have to follow rules meant for pawn brokers, ticket scalpers and auction houses (despite its description of its services as "auctions").

The company, protecting its $500 million in quarterly listing fees, is acting in what the Times calls a "savvy, resourceful," "remarkably successful," "grass roots" and "not shy" manner to stop adverse legislation. Interestingly, the company uses email missives much like the one Meg Whitman sent on Friday, but on a more localized level, to engage its users in the fight against restrictive legislation.

Still more intriguing is the company's stance on legislation meant to reduce fraud on its site; according to the Times, eBay opposes anti-fraud regulations as the company "sees its online community as self-regulating."

Louisiana legislators love eBay, thanks to powerful lobby originally appeared on BloggingStocks on Mon, 05 Jun 2006 09:16:00 EST. Please see our terms for use of feeds.