News of the Competition

August 19, 2015

WASHINGTON (8/19/15)--The Securities Exchange Commission and the Federal Reserve voiced concerns recently about practices used by big banks to reduce the appearance of risk in their portfolios (The Wall Street Journal Aug. 18). Some of the largest financial institutions in the world, such as Citigroup, Bank of America and Deutsche Bank, have been using capital-relief trades that allow the banks to pare down risk-weighted assets. But the U.S. Treasury Office has said the trades only obscure whether a bank has adequate capital. By using such trades, banks can keep risky assets on their balance sheets while simultaneously transferring risk to secondary investors through credit derivatives or securitizations. “It just seems like another repackaging of risk to mask who’s holding the bag,” Arthur Wilmarth, George Washington University law professor, told The Journal

WASHINGTON (8/19/15)--The Securities Exchange Commission fined the Bank of New York Mellon $14.8 million this week for violating the Foreign Corrupt Practices Act after the regulator found that the bank had handed internships to family members of foreign government officials affiliated with a Middle Eastern sovereign wealth fund (MarketWatch Aug. 18). The bank has not denied or admitted to the findings, and the SEC has not named the country to which the interns belong …