The Federal Reserve is moving to restrict compensation practices at the nation's banks, expanding its regulatory reach to oversee how tens of thousands of bank employees ranging from chief executives to loan officers are paid.The Fed, acting under its existing powers as a bank regulator, aims to curtail pay practices that can encourage bank employees to take the kinds of irresponsible risks that may have led to the financial crisis. It is not seeking to set caps on the amount any individual employee can be paid, said sources familiar with the plans.Fed officials and many private analysts have concluded that pay practices emphasizing short-term performance contributed to the near-collapse of the financial system last year.For example, a trader who receives bonuses based solely on one year's performance might make bets that pay off in the short run but cause vast losses in the long run. A loan officer paid only based on the volume of loans issued might not pay enough attention to the quality of those loans. Under the approach envisioned by the Fed, the two dozen or so largest banks would have to explain these pay practices to their regulator, and adjust them if examiners think they endanger the safety and soundness of the bank, said the sources, who spoke on condition of anonymity because the policy is not yet final.Some critics viewed the expected new regulations as a form of mission creep by the central bank, as it is being undertaken without explicit authorization from Congress. It comes as the Fed is facing extreme political pressure, under fire for its efforts to stabilize the financial system and for regulatory failures in the years before the crisis -- and as Chairman Ben S. Bernanke is up for Senate confirmation for a second term.
The Perils of bypassing Russia ? 'Turkmenistan Takes Sides in Pipeline Supply Competition'
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While Russia has stated that its state-owned gas giant Gazprom would participate in a trans-Afghan pipeline with Turkmenistan, Turkmen officials have denied the same. This comes after a rather disappointing meeting in Ashgabat between Russian President Dmitry Medvedev and his Turkmen counterpart Gurbanguly Berdymukhamedov, in which Moscow came away empty handed.
Analytical Note: Turkmenistan has played coy with Russia, with the Turkmen president issuing a very general and vague statement during Medvedev's visit: "Russian and Turkmenistan have mutual interest in partnership development. Our relationship is noted for stability and mutual understanding on fundamental issues."
That, however, does not mean a new deal with Gazprom, and responding to Russia's statement to that effect, the Turkmen Foreign Ministry said: "Turkmenistan will continue to raise the significance of Europe-bound projects in its energy policy and will independently choose partners." Furthermore, the statement read: "Turkmenistan views the published remarks as an attempt to interfere in the normal course of international energy relations."
The misunderstanding revolves around two main competing pipelines: the European-backed Nabucco pipeline and the Russian-backed South Stream pipeline, both vying for Turkmen gas.
Recently, the Nabucco pipeline consortium announced that it would seek to be supplied by natural gas from Iraq, Azerbaijan, and Turkmenistan, which would be transported through Turkey, bypassing Russia. Russian officials responded to this announcement by saying that Russia's Nord Stream and South Stream pipelines would be operational before Nabucco, and hence particularly Azeri and Turkmen gas supplies would it first, rendering Nabucco redundant.
"Given the estimates of the Turkmen side, as well as European and international experts, the current market situation on the gas track allows us to say - and I say so without sarcasm - that there are no prospects for Nabucco," Russia's RIA Novosti quoted the Russian deputy prime minister as saying.
It appears, however, that Turkmenistan sees things differently, and the statement from its Foreign Ministry clearly backs supplying the Nabucco pipeline.
By. Jen Alic of the Global Intelligence Report
Source: http://www.globalintelligencereport.com/categories/Professional-Level-1
The global Intelligence Report is a Private news & Intelligence service for sophisticated news consumers, investors and energy market participants. To find out more please visit: http://www.globalintelligencereport.com/categories/Professional-Level-1
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