Morgan Stanley brought in 100 bankers to offer jumbo mortgages, structured loans and other products to clients of Morgan Stanley Smith Barney. The owner of the largest brokerage in the world is poised to hire as many as 500 more bankers by the end of next year, a source said.
Residential-mortgage bonds were in favor a few years ago, fell out of favor during the financial crisis and are once again preferred by investors. Investors are flocking to mortgage bonds with the backing of the government as they seek safe-haven investments, as the global economy remains tumultuous.
The House approved this week legislation to overhaul financial regulation, but before the vote, Rep. Barney Frank, D-Mass., suggested that he expects the Securities and Exchange Commission would hold brokers to a fiduciary standard. The legislation would give the SEC authority to impose a fiduciary duty on insurance agents as well as broker-dealers. "We gave the SEC the power to do it," Frank said. "And they're going to do it."
Legislation to overhaul financial regulation would require clearing of foreign exchange swaps and forwards. "Foreign exchange swaps and foreign exchange forwards shall be considered swaps unless the [Treasury] secretary makes a written determination that either foreign exchange swaps or foreign exchange forwards or both should be not be regulated as swaps under this Act," the legislation states.
The Financial Crisis Inquiry Commission questioned executives from Goldman Sachs about their demand for billions of dollars from American International Group before the government came to the insurer's aid. Goldman officials said the demand was based on legitimate market prices. The situation is reviving debate about mark-to-market accounting.