White House Pushes to Toughen Bank Rules

(floozefactor)While Senator Elizabeth Warren pushes for legislation that would allow student borrowers to enjoy the same insanely low interest rates as big banks (for one year at least), the House of Representatives today passed a bill that would link the interest rates on federal student loans to the yield on the 10-year Treasury note.

WASHINGTON (Reuters) - The White House, following a trading loss of more than $2 billion by JPMorgan, wants to ensure a tough interpretation of a regulation aimed at preventing banks from making bets with their own money, The Wall Street Journal reported on Wednesday. Citing people familiar with the matter, the report said White House officials have stepped up talks with the Treasury Department in the several days since the staggering loss was disclosed by the bank. The discussions, according to the report, represent the first tangible political impact from the trading debacle. ...

George Osborne will threaten to break up banks if they flout new rules intended to prevent another taxpayer bailout of the financial system, reports The Guardian. The chancellor’s pledge to force through changes to the industry came amid continued upheaval at Barclays , which is losing two more top executives after being hit by a £290m fine for rigging Libor, the rate at which banks lend to each other. Royal Bank of Scotland also faces a £500m fine for manipulating the key interest rate.

By Ed Dolan: During the global financial crisis, people in the United States, Ireland, Iceland, and many other countries learned that undercapitalized banks can spell trouble for the whole economy. The Basel II rules that were supposed to prevent widespread bank failures proved inadequate. In response to the crisis, the world’s central bankers and bank regulators started work on a new set of rules, Basel III, that they have promised will make us safer.