An Insider's Take
Edward Silverman, formerly of Royal Bank of Scotland's RBS Securities, and now the Senate Banking Committee's staff director, had a rare chance last week to soothe fears about the "Volcker Rule."
Silverman, who headed the Connecticut securities firm's public policy team, told bankers that — after having been one of them — he understands the need to tread lightly.
The plan, inspired by former Federal Reserve Board chairman Paul Volcker, would limit commercial banks' proprietary trading and impose other curbs on growth. "I worked for a fairly sizable proprietary trading operation. The notion of a bunch of senators ... trying to write in statute what proprietary trading is scares me," Silverman said at a Washington meeting of the Institute of International Bankers.
Committee staff members will probably use the agencies' expertise, he said, and he recognizes the need to cooperate with international regulators as well.
"We're going to opt for flexibility here. We're going to opt for a great deference to regulators here," Silverman said. "We understand that the Volcker Rule, or the potential of it, is already creating tremendous uncertainty in the marketplace, in terms of pending acquisitions that might be out there, and we're going to try and deal with that uncertainty by setting, maybe, some timeframes for rulemaking.
"We also understand that there are tremendous international implications in the Volcker Rule, and for the United States to act unilaterally on this would be ridiculous."
Educated Voter
Brian Moynihan has only been chief executive of Bank of America Corp. a little over two months, yet he is already displaying some political smarts.
Asked in an interview with the New England Cable Network whether he would vote for a 16th term in Congress for Barney Frank, Moynihan replied, "Absolutely."
That's a good thing because the Massachusetts Democrat is chairman of the House Financial Services Committee, which could make life very difficult for Moynihan's company if Frank wanted it to.
The CEO lives in Wellesley, which is part of Frank's congressional district.
"He knows the issues that the industry is facing, he knows the issues consumers are facing, and he has an amazing ability to see how those fit together," Moynihan said in the Feb. 28 interview. "Barney more than any other person has figured out how to balance those two things."
Change at Treasury
Credited with engineering the administration's actions to stabilize U.S. financial markets, Lee Sachs is bidding the Treasury Department good-bye.
It was reported last week that Sachs, a top aide to Treasury Secretary Tim Geithner, will leave this spring as the department turns away from crisis management. The 46-year-old official said he will return to the private sector after some time off. He joined the Treasury's "crisis team" following the 2008 election to help the Obama administration design a financial rescue plan.
Formerly a partner in the Mariner Investment Group Inc. private-equity firm, he was one of Geithner's top advisers with Wall Street experience.
Another top Geithner aide, Gene Sperling, could also be on his way out. According to some published reports, he is rumored to be in talks with the White House's Office of Management and Budget to become Budget Director Peter Orszag's deputy.
