Paul Volcker is advocating hard caps and prescriptive regulation for banks:
In his speech, Volcker urged limits on the activities of banks that are considered “too big to fail,” going beyond what other officials in the Obama administration have advocated.
“I do not think it reasonable that public money –taxpayer money — be indirectly available to support risk-prone capital market activities simply because they are housed within a commercial banking organization,” Volcker said.
Since January, Volcker has advocated that regulators should prohibit financial companies whose collapse would pose a risk to the economy — those considered “too big to fail” — from engaging in certain types of trading and investing activities. The administration wants stricter oversight for such companies and tighter capital and liquidity requirements.
“Extensive participation in the impersonal, transaction- oriented capital market does not seem to me an intrinsic part of commercial banking,” Volcker said. “Substantial involvement in heavily leveraged finance and heavy proprietary trading almost inevitably entails risks.”
“I want to question any presumption that the federal safety net, and financial support, will be extended beyond the traditional commercial banking community,” he said.
Manulife is rejigging its seg fund guarantees:
- InvestmentPlus: With a choice of over 75 funds, this Series provides investors with the greatest range of investment choice available with management expense ratios competitively priced with most mutual funds. It offers investors basic protection and investment flexibility without the need of enhanced guarantees.
- IncomePlus (version 2): A new version of Manulife’s very popular IncomePlus has been designed to continue to meet the needs of investors in their pre- or early retirement years by offering guaranteed income for life, growth potential of the market and income protection from market downturns.
IncomePlus (version 2) will continue to offer resets, annual income bonuses and a 100 per cent death benefit guarantee. In addition to these features, a new Joint Life Payout Option will also be available. In the event one spouse dies, this option can allow the surviving spouse to continue to receive income at the same level, uninterrupted for the balance of his/her life.
- EstatePlus: Is a new estate-planning-focused series offering a 100 per cent Death Benefit Guarantee with resets. This Series will help investors who do not require income protection to protect their legacy for their beneficiaries.
Meanwhile, Sun Life pledged not to cut their common dividend.
The Financial Stability Board is attempting to implement a reform agenda:
Improving compensation practices. The FSB will set out for the Pittsburgh Summit specific implementation guidelines on the governance, structure and disclosure of compensation, which will limit the level of compensation in the light of the need to conserve capital and ensure that the structure and incentives are aligned with good risk management, in line with the FSB Principles for Sound Compensation Practices in financial institutions issued in April.
Meanwhile, the Institute for International Finance published a letter to the G-20, stressing that this is not a time for business as usual. Rick Waugh, CEO of the Bank of Nova Scotia, is quoted by the Globe and Mail as explaining that “business as usual” means “competition”:
“Right now, there seems to be some rogue behaviour among certain institutions that have been offering, say, three-year guarantees to induce people to leave their firm to go to another one,” said Rick Waugh, chief executive officer of Bank of Nova Scotia and co-head of the IIF committee that came up with a list of recommendations for the sector. As a result, the IIF has written to its member banks to remind them of its principles on compensation, and it has spoken to politicians, he said.
Rick Waugh’s firm is known for its innovative approach towards revising compensation contracts.
Looks like the SEC will attempt to ban flash orders:
SEC commissioners unanimously voted today to seek public comment on a rule barring exchanges and trading platforms from giving clients access to information about stock orders a fraction of a second before the market.
“Investors that have access only to information displayed as public quotes may be harmed if market participants are able to flash orders and avoid the need to make the orders publicly available,” Chairman Mary Schapiro said.
Democratic Senators Charles Schumer and Ted Kaufman urged the commission to halt the practice, arguing frequent traders use technology to profit from access to information not available to retail investors. Direct Edge Holdings LLC has relied on flash orders to take market share from NYSE Euronext.
Industry executives have complained that the government’s plans to harmonize the provincial sales tax with the federal goods and services tax will siphon money out of the retirement nest eggs of Canadians. But after an article published in The Globe and Mail this week, officials in Finance Minister Dwight Duncan’s office said they are prepared to release a document on the negative impact of management fees for investors if executives continue to complain in public, industry sources said.
There better be a really good explanation of this – it sounds like political dissent will now be met by attacks on industry … to cheers from the avid crowd. Funny, I had a conversation just this week about the gradual, yet noticable, erosion of civil liberties.
Not a lot happened in the preferred market today, with the two main sectors up by marginal amounts, but volume was quite strong. There’s no colour on the volume table again, because the Financial Post is still reporting yesterday’s news as of 6:45pm.
| HIMIPref™ Preferred Indices These values reflect the December 2008 revision of the HIMIPref™ Indices Values are provisional and are finalized monthly |
|||||||
| Index | Mean Current Yield (at bid) |
Median YTW |
Median Average Trading Value |
Median Mod Dur (YTW) |
Issues | Day’s Perf. | Index Value |
| Ratchet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 1.0247 % | 1,468.7 |
| FixedFloater | 5.72 % | 3.98 % | 54,520 | 18.62 | 1 | 1.2793 % | 2,683.1 |
| Floater | 2.50 % | 2.11 % | 29,737 | 22.16 | 4 | 1.0247 % | 1,834.8 |
| OpRet | 4.86 % | -12.26 % | 137,543 | 0.09 | 15 | 0.1302 % | 2,290.4 |
| SplitShare | 6.40 % | 6.66 % | 939,338 | 4.04 | 2 | 0.5102 % | 2,066.2 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.1302 % | 2,094.4 |
| Perpetual-Premium | 5.76 % | 5.67 % | 147,380 | 2.84 | 12 | 0.0659 % | 1,880.8 |
| Perpetual-Discount | 5.72 % | 5.78 % | 205,110 | 14.17 | 59 | 0.0218 % | 1,796.3 |
| FixedReset | 5.48 % | 3.98 % | 454,247 | 4.07 | 40 | 0.0792 % | 2,113.8 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| MFC.PR.C | Perpetual-Discount | -3.47 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-09-17 Maturity Price : 18.93 Evaluated at bid price : 18.93 Bid-YTW : 5.99 % |
| NA.PR.L | Perpetual-Discount | 1.11 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-09-17 Maturity Price : 21.55 Evaluated at bid price : 21.86 Bid-YTW : 5.60 % |
| CU.PR.B | Perpetual-Premium | 1.27 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2012-07-01 Maturity Price : 25.00 Evaluated at bid price : 25.60 Bid-YTW : 5.21 % |
| BAM.PR.G | FixedFloater | 1.28 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-09-17 Maturity Price : 25.00 Evaluated at bid price : 19.00 Bid-YTW : 3.98 % |
| BNA.PR.C | SplitShare | 1.40 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2019-01-10 Maturity Price : 25.00 Evaluated at bid price : 19.60 Bid-YTW : 7.70 % |
| BAM.PR.K | Floater | 2.00 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-09-17 Maturity Price : 12.75 Evaluated at bid price : 12.75 Bid-YTW : 3.08 % |
| BAM.PR.B | Floater | 2.73 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-09-17 Maturity Price : 12.80 Evaluated at bid price : 12.80 Bid-YTW : 3.07 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| SLF.PR.F | FixedReset | 212,200 | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-07-30 Maturity Price : 25.00 Evaluated at bid price : 27.15 Bid-YTW : 4.03 % |
| RY.PR.B | Perpetual-Discount | 95,700 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-09-17 Maturity Price : 21.15 Evaluated at bid price : 21.15 Bid-YTW : 5.62 % |
| SLF.PR.E | Perpetual-Discount | 89,173 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-09-17 Maturity Price : 19.03 Evaluated at bid price : 19.03 Bid-YTW : 5.94 % |
| BAM.PR.B | Floater | 77,325 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-09-17 Maturity Price : 12.80 Evaluated at bid price : 12.80 Bid-YTW : 3.07 % |
| TD.PR.R | Perpetual-Discount | 50,644 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2039-09-17 Maturity Price : 24.71 Evaluated at bid price : 24.93 Bid-YTW : 5.69 % |
| NA.PR.P | FixedReset | 45,240 | YTW SCENARIO Maturity Type : Call Maturity Date : 2014-03-17 Maturity Price : 25.00 Evaluated at bid price : 27.97 Bid-YTW : 3.90 % |
| There were 46 other index-included issues trading in excess of 10,000 shares. | |||