Top banks lobbying received larger rescue plan

NEW YORK - more aggressively pressure before the financial crisis the worst Bank loans made during the economic recession - and rescue dollars more it received, according to a study published this week by the National Bureau of Economic Research.

The report, entitled "A Fistful of Dollars: Lobbying and the financial crisis," said that banks lobbying efforts may be motivated by short-term profit gains, which can have devastating effects on the economy.

"Overall, our results indicate that the political influence of the financial industry played a role in the accumulation of risks and therefore contributed to the financial crisis," said the report, drafted by three economists of the Monetary Fund International.

The data collected by the three authors - Deniz Zaagi'igan, Prachi Mishra and Thierry Tressel - show that the more aggressive lobbiers in the financial industry from 2000 to 2007, has also made more toxic mortgages. They securitized most of the debt for real estate investors and their stock prices more closely correlated to the recession and lending plan rescue that followed.

Loans banks has also suffered from crime higher during the recession.

What economists could not definitively determine was the motivation of the banks of lobbying. If the banks were looking to generate income at the expense of the company, it would be logical to restrict their lobbying.

If the banks were especially concerned of profit in the short term and not think do not long term consequences, then Executive compensation practices should be modified, said the report. And if the banks just wish to inform legislators and were too optimistic about their future, it would be more difficult to propose reforms.

BIG LOBBYING, OF WHOLESALE RESCUE PLANS

When the bubble burst, the banks that spend more on lobbying received "a large piece of the cake" in the rescue plan of 700 billion dollars in the fall of 2008.

For example, the report cites Citigroup Inc. (c.n.r.) $ 3 million to lobby against HR-1051 predatory loan Consumer Protection Act of 2001 and the Bank of America Corp. (BAC).(N) spending $ 1 million to put pressure on housing and banking issues.

HR-1051 never signed into law, nor was 93% of all invoices for the promotion of more stringent regulations from 1999 to 2006. However, two bills that significantly reduces the restrictions on the mortgage market is in force, access to property American and Economic Opportunity Act of 2000 and the Act on the implementation of the American Dream Fund, 2003.

Citigroup and Bank of America each finally receive 45 billion of the rescue plan Fund, JPMorgan Chase & Co (JPM).(N), Wells Fargo & Co (WFC).(N) or other large commercial banks.

Now that Frank Dodd financial reform bill has passed, the big banks have been aggressively lobbying against them, are too severe restrictions. Among the top items on the agenda of the industry's lobbying are stronger capital regulation, but also a Bureau of financial Protection, new rules on derivatives trade and restrictions on the exchange of exclusive rights.

In an interview with Reuters Thursday, Zaagi'igan counterparts of the Federal Reserve Board expressed concern that "certain concepts would get watered down in the process because the financial industry is pressure against them."

On Tuesday, the House Financial Services Committee voted to delay the implementation of the reform of derivatives of 18 months. Although few expect such a measure to clear the Senate and be signed by the President, some Wall Street executives are pressing for slower rulemaking.

At a demonstration Tuesday, Morgan Stanley (MS)(N) CEO James Gorman, warned that implementation of reforms could too hastily "" tip the world's economies into recession. ""

Economists report describes the negative impacts of the lobbying of the Bank, but Zaagi'igan stated that this time, Wall Street's interests can be aligned with the whole of the economy - if by chance.

She said Bank lobbying is "not bad" and current activities can act as counterweight to tilt after the crisis of the regulators to keep banks left tight.

Banks floating $ 5 billion deal to settle the foreclosure probe

(Reuters) - major banks are willing to pay $ 5 billion to settle claims by federal officials and mortgage foreclosure illegitimate practices States, the Wall Street Journal reported, citing people familiar with the situation.

Banks offer comes as the State and the companies of mortgage loan and federal officials continue their efforts to strike a settlement of the investigations sparked by allegations of "robo-signature" and other dubious practices of foreclosure which came to light last fallsaid the newspaper.

Banks intend to propose as much as $ 5 billion be used to compensate the borrowers already done harm to the foreclosure of the process and provide assistance to the transition for borrowers who are excluded from their homesthe WSJ said, citing people familiar with the case.

five banks fail in Florida, GA, Mich. ; fact 39 ' 11 (AP)

WASHINGTON - regulators Friday closed banks in Florida, the Georgia, and Michigan, a total of five closures which lifted the number of bank failures in the United States this year to 39.

The pace of the closures has slowed, however, that the economy is improving and banks are working their way through piles of bad debt. At this time last year, the regulators had closed 64 banks.

The Federal Deposit Insurance Corp. took center of Florida, based in Winter Park, Florida, with $ 352 million in the First National Bank and the community of Cortez of Brooksville, Florida, bank assets with 70.9 million in assets.

The Agency took also during the first Bank of Community Choice in Dallas, GA, with 308.5 million in assets; Park Avenue, Valdosta, GA based Bank, with 953.3 million in assets; and the Central Bank community in Mount Clemens, Michigan, with 476,3 million in assets.

Miami-based American Premier Bank has agreed to assume the assets and deposits of First National Bank of Central Florida and the Cortez Community Bank. Bank of the Ozarks, based in Little Rock, AR, is to acquire the assets and deposits of first Community Bank of choice and the Park Avenue Bank. Talmer Bank & Trust, based in Troy, Michigan, has agreed to assume the assets and deposits of the Central Bank community.

In addition, the FDIC and the premier American Bank agreed to share losses on 270 million dollars of First National Bank of Central Florida loans and other assets and assets of the Cortez Community Bank $ 51.3 million.

The Agency and the Bank of the Ozarks are loss sharing 260.7 million of dollars in assets of first choice Community Bank and 514.1 millions of dollars in assets of the Park Avenue Bank. Talmer Bank & Trust shares with the FDIC and millions of dollars in assets of the Central Bank community.

The failure of First National Bank of Central Florida is expected to cost of $ 42.9 million deposit insurance fund. The failure of Community Bank of Cortez is supposed to 18.6 million. that $ 92.4 million first choice Community Bank. Bank of Park Avenue, $ 306,1 million. and the Central Bank community, wore million.

Florida and the Georgia were the hardest hit States for bank failures. Twenty-nine banks were a component in Florida last year and 16 in Georgia. The four cases in these States Friday to 4 to 10 the number of bank failures in Florida and Georgia, respectively this year.

In California and Illinois also saw a large number of bank failures.

In 2010, the authorities seized 157 banks who have succumbed to mounting loan bitter and occupied economy. It was the most in one year since the crisis of the savings and credit, two decades ago.

The FDIC said that 2010 will probably mark the apogee of bank failures.

There are 140 bank failures in 2009, price of the insurance fund approximately $ 36 billion. The failures of the last year cost about $ 21 billion, or a lower price tag because banks failed in 2010 were smaller on average. Twenty-five banks failed in 2008, the year of the financial crisis struck with force. only three have been closed in 2007.

2008, The year of the financial crisis hit, to 2010, bank failures cost Fund 76.8 billion. Deposit insurance fund fell into the red in 2009, and its deficit amounted to 7.4 billion at December 31.

The FDIC expects the cost to resolve banks having stranded in total approximately 52 billion from 2010 to 2014.

Silver - insured up to $ 250,000 per account - applicants is not in danger, with the FDIC backed by the Government. This insurance Cap became permanent law financial revision adopted in July.

The number of banks on the FDIC confidential "problem" list is passed to 884 during the last quarter of the year last 860 three months earlier. Banks in difficulty 884 is the highest number since 1993, savings and credit crisis.