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U.S. regulators said on Friday that they were postponing a significant part of the financial regulatory overhaul after banks said they would not be ready for the new rules, the New York Times DealBook blog reported. The regulators proposed the rules in June as part of an international effort to harmonize the global financial system. Smaller banks immediately objected to the proposals, saying that they would be too costly and might deter them from making loans. Some of the rules were supposed to take effect at the beginning of next year, but regulators have decided a delay makes sense. "In light of the volume of comments received and the wide range of views expressed during the comment period, the agencies do not expect that any of the proposed rules would become effective on January 1, 2013," according to a statement from the Federal Reserve, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp.

Societe Generale SA, Royal Bank of Canada, and Bank of America Corp. are among nine additional banks that were subpoenaed in New York and Connecticut’s probe of alleged manipulation of the London interbank offered rate (Libor), Bloomberg News reported yesterday. The subpoenas, issued by New York Attorney General Eric Schneiderman starting in August, bring to 16 the total number of banks that have been subpoenaed in the states’ investigation. Schneiderman and Connecticut Attorney General George Jepsen are jointly investigating claims that banks rigged the Libor, a worldwide benchmark for borrowing. Florida Attorney General Pam Bondi has also issued subpoenas to more than a dozen financial institutions, including UBS AG, Deutsche Bank AG and HSBC Holdings Plc.

Solyndra, the solar panel maker that failed despite a $528 million federal loan, won court approval yesterday for its plan to repay creditors and end its politically charged bankruptcy after a judge overruled objections by the U.S. government, Reuters reported. Bankruptcy Judge Mary Walrath rejected the government argument that the plan was improper because its main purpose was to provide tax breaks. Venture capital firms Argonaut Private Equity and Madrone Capital Partners will control Solyndra's tax breaks, known as net operating losses (NOLs) that are potentially worth $341 million after the bankruptcy. "It is clear in this case the bankruptcy and the reorganization dealt with many other things than the value of the NOLs or the preservation of the NOLs," Judge Walrath said.

Bankrupt solar firm Solyndra has filed a lawsuit against three U.S.-listed Chinese solar players, including Suntech Power Holdings Co, seeking $1.5 billion in compensation due to monopolization by these firms, Reuters reported on Friday. The lawsuit was filed against Suntech, Trina Solar Ltd and Yingli Green Energy Holding Co claiming that the trio's panel prices moved in tandem - falling 75 percent in four years in the U.S. Solyndra, which claims in the lawsuit that the trio were involved in predatory pricing and price fixing, filed for bankruptcy a year ago as it could no longer compete with plunging prices of solar panels imported from China. U.S. solar companies launched a complaint last year alleging protectionism from Beijing for Chinese panel makers, sparking trade disputes between the two countries.

The Federal Communications Commission is appealing a bankruptcy judge's decision to protect the license held by troubled FiberTower Corp., Dow Jones DBR Small Cap reported today. Federal authorities were threatening to take away that license and accused Bankruptcy Judge Michael Lynn of interfering with federal law when he told the agency not to terminate the license before FiberTower's license-renewal request goes through the lengthy federal review process. The agency's appeal, filed on Thursday, asks a district court judge to reexamine the decision.

The scandal over global interest rates has state officials working intensely behind the scenes to build a case for suing the nation’s largest banks, the New York Times reported today. The attorneys general in Maryland, Massachusetts, New York and Connecticut have all been examining how much their states may have lost as a result of a lowered Libor. A spokeswoman for Connecticut’s attorney general, George C. Jepsen, said that the state’s work with New York’s attorney general, Eric T. Schneiderman, "has broadened significantly over the last few weeks and we are now coordinating with a much larger group of attorneys general." Even before the British bank Barclays admitted in June that its employees had tried to manipulate Libor, there were a number of lawsuits filed by cities and municipal agencies seeking damages from large banks for manipulating Libor. But while those cases were filed by private sector lawyers, the public officials are looking at bringing more wide-ranging lawsuits on behalf of the states. The Justice Department has coordinated with the states and is leading its own investigation.

U.S. Trustee Roberta DeAngelis joined criticisms of Solyndra LLC's plan to repay its debts, saying that the bankrupt solar panel maker should disclose whether it is favoring venture capital investors over creditors, Reuters reported yesterday. DeAngelis said in a court filing that Solyndra should provide more information about the repayment plan, which preserves potential tax benefits for the two investment funds that are sponsoring the bankruptcy plan. Earlier this week, the Department of Energy and the Internal Revenue Service also demanded more details about the tax benefits. The two agencies said in a court filing that the Madrone Partners and Argonaut Ventures funds stood to gain more than $500 million in future tax breaks from the Solyndra bankruptcy.

The Federal Reserve and the European Central Bank decided this week to hold off on any big new initiatives to stimulate markets and the sluggish economies of the U.S. and Europe, The New York Times Dealbook reported yesterday. The lack of action may have a direct and painful impact on the chief source of revenue at investment banks on both sides of the Atlantic. Since 2009, the Fed has carried out two additional, but lesser, monetary initiatives. The next time central bank stimulus appeared to have a strong impact on trading profits was in the first quarter of this year. To help European banks fund themselves, the European Central Bank provided cheap, emergency credit to the continent’s lenders, first in December 2011 and then in February of this year. Investor sentiment rebounded, bonds rallied, and, on cue, fixed-income traders were soon racking up big profits. The central banks may yet act with force this year. Both the Fed and the European Central Bank made it clear this week that more forceful initiatives could happen later if economic and market stresses worsen. Many on Wall Street will be hanging on those assurances.

The three central bank meetings this week - the Bank of England, the European Central Bank and the Federal Reserve - made very good cases for additional stimulus measures, although they failed to specify what these would be. Equities and certain bonds that had surged on the basis of last week’s verbal assurances by central bankers and political leaders were sold off. The unfortunate reality is that, unlike during the financial crisis of 2008 and 2009, central banks can't be the saviors this time around for a struggling global economy, according to a Bloomberg commentary yesterday. Other government entities with better-suited policy tools need to step up to the plate. Why did central bankers disappoint so many this week? Perhaps they wish to keep pressure on other policy-makers who demonstrate none of the necessary urgency. To quote Mario Draghi, president of the ECB, central banks “cannot replace governments.” Central bankers, it seems, more than anyone are being careful to keep dry whatever ammunition they still have.