Financial Risk Management News

Welcome to Hollywood's newest version of risky business: movie derivatives.

Two trading firms, one of them an established Wall Street player and the other a Midwest upstart, are each about to premiere a sophisticated new financial tool: a box-office futures exchange that would allow Hollywood studios and others to hedge against the box-office performance of movies, similar to the way farmers swap corn or wheat futures to protect themselves from crop failures.

The Cantor Exchange, formed by New York firm Cantor Fitzgerald and set to launch in April, last week demonstrated its system to 90 Hollywood executives in a packed Century City hotel conference room.

BEIJING - China has tightened controls on pay for its top bankers, joining global efforts to try to limit financial risks by linking longer-term performance more closely to compensation.

Chinese banks must withhold at least 40 percent of bonuses for top executives for a minimum of three years and can recover payments if poor performance causes losses, the China Banking Regulatory Commission announced Wednesday.

China's banks avoided the mortgage-related turmoil that battered Western institutions but regulators are trying to improve risk management as they liberalize the state-owned industry in hopes of making it more efficient and productive.

Today, the Community Financial Services Association of America (CFSA), the trade association representing America's responsible, small denomination, short-term payday lenders, questioned the activities of certain large Wall Street financial institutions for promoting their own interests over those of hard-working, middle income consumers.

"Unlike those who are responsible for the collapse of our financial system, payday lenders provide a fully disclosed, transparent and highly regulated product to working families with the highest customer satisfaction rate of any comparable product," said CFSA Board Chair D. Lynn DeVault.

DeVault continued, "The same interests who brought complex and costly transactions that created havoc for millions of Americans are now trying to create a system of winners and losers that is stacked unfairly in their favor and is a bad deal for the average consumer."

WASHINGTON - The Treasury Department sank billions into auto finance giant GMAC Inc. without an exit strategy or proof the company was viable - a decision that could cost taxpayers $6.3 billion, a new watchdog report says.

Yet GMAC faced far fewer conditions than the bailed-out automakers, the report says.

The report is to be released Thursday by the Congressional Oversight Panel overseeing the $700 billion financial bailout that Congress passed in October 2008.

WASHINGTON - The Federal Reserve, still dusting itself off from a fight that threatened to trim its powers, could emerge from a congressional overhaul of banking rules as the top cop over the nation's largest financial institutions.

Senate negotiators are considering giving the Fed the authority to supervise nonbank financial institutions that are so large and intertwined that their failure could pose a risk to the entire economy, according to people familiar with the evolving legislation.

The Fed also would retain its power to oversee nearly two dozen bank holding companies that hold about two-thirds of the banking system's assets, according to these people, who spoke on condition of anonymity because of the sensitivity of the discussions.

Focus Business Bank (OTCBB: FCSB) announced unaudited financial results for the quarter and year ended December 31, 2009.

The Bank ended the quarter with assets of $108 million, an increase of 14% over December 31, 2008.

The Bank had a loss for the quarter of $671,000 compared to a loss of $1,007,000 for the quarter ended September 30, 2009.

Senate negotiators are considering giving the Fed the authority to supervise nonbank financial institutions that are so large and intertwined that their failure could pose a risk to the entire economy, according to people familiar with the evolving legislation.

The Fed also would retain its power to oversee nearly two dozen bank holding companies that hold about two-thirds of the banking system's assets, according to these people, who spoke on condition of anonymity because of the sensitivity of the discussions.

That would make the Fed, already one of the most influential agencies in the federal government, the main entity responsible for avoiding a future financial meltdown like the one that struck Wall Street in the fall of 2008.

NEW YORK - To European officials, financial derivatives are dangerous weapons that worsened Greece's debt crisis and should be curbed.

Yet supporters of tougher rules say the global financial system is at risk as long as derivatives remain largely unregulated.

"Credit default swaps didn't cause Greece's problems," said Darrell Duffie, a finance professor at Stanford University.

The Boards of Trustees of DWS High Income Trust (NYSE: KHI), DWS Strategic Municipal Income Trust (NYSE: KSM), DWS Strategic Income Trust (NYSE: KST), DWS Multi-Market Income Trust (NYSE: KMM), and DWS Municipal Income Trust (NYSE: KTF) (each, a "Fund" and collectively, the "Funds") announced that the Annual Meeting of Shareholders for each Fund will be held on May 24, 2010 at the New York Marriott Eastside, 525 Lexington Avenue, New York, NY 10017 to consider the election of Trustees.

Holders of record of common shares and preferred shares, as applicable, of the Funds at the close of business on April 9, 2010 are entitled to vote at the meeting and any adjournments thereof.

For more information on KHI, KSM, KST, KMM and KTF visit www.dws-investments.com or call (800) 349-4281.

The Board of Directors of DWS Global Commodities Stock Fund, Inc. (NYSE: GCS) announced that the Annual Meeting of Stockholders of the Fund for the 2009-2010 fiscal year will be held on June 28, 2010 at the New York Marriott Eastside, 525 Lexington Avenue, New York, NY 10017.

Stockholders will consider the election of Directors for the Fund, as well as a proposal submitted by a stockholder to terminate the investment management agreement between the Fund and Deutsche Investment Management Americas Inc. The close of business on April 23, 2010 has been fixed as the record date for the meeting and any postponements or adjournments thereof.

On February 22, 2010, Western Investment LLC, the same dissident stockholder who submitted the above proposal, filed a civil complaint for declaratory and injunctiverelief against the Fund in the United States District Court for the Southern District of New York seeking, among other things, an injunction compelling the Fund to (i) hold a meeting of its stockholders at the earliest date legally possible for the purpose of electing directors and (ii) recognize the voting rights of all shares beneficially owned by the plaintiff at such meeting, including those acquired after the Fund opted-in to the Maryland Control Share Acquisition Act on September 11, 2009.