MORNING BRIEFS

Rule changes drive down commercial-property-backed bond risk
The U.S. Treasury eased tax penalties on struggling commercial-property borrowers who are trying to modify their mortgages. The move caused the cost of protecting commercial mortgage-baked securities from default to fall. "While the impact of these rule changes are positive at the margin, the changes will not affect" all bondholders equally, said Alan Todd, a JPMorgan Chase analyst. Bloomberg (17 Sep.)

*and how is Citi going to make money? First they announce they will give all of Smith Barney to Morgan Stanley, now no more oil trading?
Citigroup might spin off oil-trading unit Phibro
Citigroup is considering spinning off Phibro, its proprietary oil-trading unit, CEO Vikram Pandit said. The unit trades only with Citi capital, but Pandit wants to turn it into an asset manager that can work with the capital of other institutions. Financial Times (tiered subscription model) (18 Sep.)

Most of downturn's winners are large-cap equities
Stock prices nosedived in the months that followed Lehman Brothers' collapse and the ensuing credit meltdown. Since then, the net worth of a long list of large-cap, household-name companies has surged by hundreds of billions of dollars. Financial stocks dominate the list. BusinessWeek (17 Sep.)

Moody's praises changes to Basel II
Ahead of the Group of 20 summit next week in the U.S., Moody's Investors Service issued a comment paper on changes to the EU's Capital Requirements Directive as well as Basel II, calling the moves "positive for banks' creditworthiness." "One important amendment calls for stricter operational requirements for credit analysis for banks holding securitization exposures," according to the paper. "We believe that the increased requirement for credit analysis for banks holding securitized exposures is going to be an important element of improved risk management." Risk.net (17 Sep.)