Morning Bell

• Senate leaders fail to reach "fiscal cliff" compromise
  The Senate adjourned an emergency Sunday session with Democratic and Republican leaders still unable to agree on a compromise that would avert the "fiscal cliff" of tax increases and spending cuts set to take effect Tuesday. Late in the day, talks took a new direction with Senate Republican leader Mitch McConnell opening discussion on how to break the deadlock with Vice President Joe Biden. The New York Times (tiered subscription model) (12/30), The Washington Post (12/30), Chicago Sun-Times (12/31)     

• Commentary: Patchwork, procrastination in store for budget drama
  Quick patchwork and procrastination can be expected from Washington, D.C., as deadlines near for the "fiscal cliff" and raising the cap on government borrowing, writes Jim McTague. Over the longer term, it's likely the Republican Congress and President Barack Obama will work out spending cuts that include entitlements. Barron's (special access for readers of SIFMA SmartBrief) (12/29)     

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Industry News

• Southern Co. CEO discusses "fiscal cliff" consequences
  Tom Fanning, CEO of Southern Co., discusses some of the consequences should the U.S. go over the "fiscal cliff." Fanning focuses on dividends. "The truth is, the market has already anticipated some adverse consequence to taxation rates on dividends," Fanning said. CNBC (12/28)     

• Data indicate lowest bond issuance since 2002
  Bond issuance by banks in 2012 was $1.26 trillion -- the lowest level in 10 years -- amid the debt crisis in Europe and new regulations worldwide, Dealogic says. Financial Times (tiered subscription model) (12/30)     

• 2012 proved to be a good year for investors
  The Wall Street Journal and The Associated Press look back at the highs and lows of 2012. The conclusion: The markets showed more stability, with gains that came slow and steady despite global turmoil. "What really worked in the U.S. in 2012 was avoiding the overly bearish projections from 2011," said Vishaal Bhuyan, founder of Nariman Point hedge fund. The Washington Post/The Associated Press (12/28), The Wall Street Journal (12/29)     

• Credit Suisse exec: Conflicts beset exchanges' self-regulation
  Facebook's initial public offering revealed a fundamental conflict between the quasi-governmental role of exchanges and their profit-making nature, indicating that self-regulation is no longer viable, Credit Suisse's Dan Mathisson told U.S. senators last week. Mathisson said a regulatory overhaul of the markets is now in order. Bloomberg (12/28)     

Washington Roundup

• U.S. accounting group wants to be part of international panel
  The U.S. Financial Accounting Foundation said it has not yet decided whether to change to international rules, but wants to participate in a committee formed to draft international accounting rules. The U.S. standard-setters could be excluded, limiting America's influence over global standards. Reuters (12/29)     

• Commentary: Bernanke's policies more a threat than "fiscal cliff"
  Columnist William Cohan argues that the real threat to the economy isn't the "fiscal cliff" but the policies of Federal Reserve Chairman Ben Bernanke, namely the promise to keep interest rates near zero until the unemployment rate is lowered to 6.5%. Cohan says the prospect of that happening could take years and result in another financial crisis. The Washington Post (12/28)     

Asset/Wealth Management Report

• Appetite for risk will return in 2013, money managers predict
  Money managers forecast that in the coming year, investors are going to be more willing to take on greater risk. Consequently, they say, look for greater demand for stocks, floating-rate loans, mortgage-backed securities and high-yield bonds. "Managing money with one eye on the rear-view mirror is no fun," said Baring Asset Management's Alan Wilde. Reuters (12/30)     

Hot Topics

Top five news stories selected by SIFMA SmartBrief readers in the past week.

• "Fiscal cliff" deal may include lower corporate tax rate (Los Angeles Times (tiered subscription model))

• Washington readies final effort to avert "fiscal cliff" (Reuters)

• Focus of "fiscal cliff" debate shifts to U.S. Senate (The New York Times (tiered subscription model))

• VIX rises as Wall Street braces for "fiscal cliff" (CNNMoney)

• FINRA fines 5 Wall Street banks over payments to lobbyists (Reuters)

• Results based on number of times each story was clicked by readers.

Editor's Note

• SmartBrief will not publish Tuesday
  In observance of New Year's Day, SmartBrief will not publish Tuesday. Publication will resume Wednesday. Enjoy the holiday!     

SIFMA News

• Early-bird rates: SIFMA 40th Annual Operations Conference & Exhibit 2013 at 2012 prices!
  SIFMA's 40th Annual Operations Conference + Exhibit in Boca Raton, Fla., from April 28 to May 1, 2013, will bring together senior professionals from all corners of the marketplace at the premier event for financial services operations. Take advantage of early-bird rates so you can engage expert thought leaders to examine the most critical operational, risk management and regulatory issues affecting your firm. In addition, you will gain unique insights and actionable solutions from senior industry professionals, regulators and service providers.     

• SIFMA Social Media Seminar -- Feb. 28 -- San Francisco
  This popular event moves to the West Coast for a full-day seminar featuring in-depth panels on marketing, business and practitioner experience with social media as well as practical advice on the legal and compliance issues faced by the expanding use of interactive technology for business purposes. Learn the practices and processes that will help your firm navigate these new communication platforms.     

• Check out the handy SIFMA Dashboard

SmartQuote

Never tell your resolution beforehand, or it's twice as onerous a duty." --John Selden, English jurist and scholar