The Federal Reserve and SEC are finalising a formal agreement that will start the process of redrawing how Wall Street is regulated in the wake of Bear Stearns’ near collapse, reports the WSJ. The agreement, which could be announced as soon as this week, will increase co-operation and information-sharing between the central bank and SEC. The type of information to be shared includes data regarding settlements, trades and positions. The SEC will also get information from the Fed on short-term financing from the banks that clear trades and hold collateral for the securities firms. Under the agreement, the Fed will be able to see an investment bank’s trading positions, its leverage and its capital requirements, among other things.
