The Dodd-Frank Bill Conference Reopened and Modified Bill Approved by the House

On Tuesday, June 29, 2010, the conference committee that previously finalized the Dodd-Frank Bill reopened the conference in order to swap out a controversial $19 billion tax on large banks in favor of winding TARP down early and assessing modest fees through the FDIC. 

The House later voted to approve the modified Dodd-Frank Bill on the evening of Wednesday, June 30.  The vote passed 237 to 192.  The Senate is now expected to vote on the bill during the week of July 12. 

Read the Dodd-Frank Bill as previously released from the conference committee.

Federal Reserve Announces Changes to Payment System Risk Policy

On Monday, June 28, 2010, the Federal Reserve Board announced plans to implement changes to its Payment System Risk policy in early 2011.  The specific date will be announced with at least 90 days advance notice.  The revised policy "explicitly recognizes the role of the central bank in providing intraday credit to healthy depository institutions predominantly through collateralized daylight overdrafts."

Read the Federal Reserve's press release.

Bank of England Publishes Financial Stability Report

On Friday, June 25, 2010, the Bank of England published its half-yearly Financial Stability Report.  The report notes that although UK banks have raised their capital and liquidity buffers, they still face a number of challenges in the period ahead.  The report recommends that an extended transition to the new Basel regulatory regime would allow banks to "build resilience through greater retention of earnings, while sustaining lending."

Read the Bank of England's Financial Stability Report.

European Parliament and the European Council Cap Bankers' Bonuses

The European Parliament and the European Council have announced new rules for banks and a cap on bankers' bonuses.  These new rules cap bonuses, as well as establish new rules for re-securitizations and the trading books.  The announced rules are the result of negotiations between the Parliament and Council in an effort to promote a new bonus culture in the EU and to address moral hazard.

Read the European Parliament's Press Release.