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New York, Los Angeles and Chicago, the three biggest U.S. cities, saw an increase in population as falling housing prices slowed growth in the Florida and California suburbs that were leaders earlier in the decade, the U.S. Census Bureau said today.

“The housing bubble caused a migration bubble and it has burst,” said William Frey, a Brookings Institution demographer in Washington. “Big cities survived the housing meltdown better than most of the rest of the country.”

The Census figures, covering the year through June 2008, show how the worst U.S. real-estate slump since the Great Depression, and the deepest recession in half a century, is changing the nation’s population trends. Among the worst hit are Florida’s cities: the state had three of the 10 fastest-growing urban centers five years ago, and none in the most recent year.

That’s a boon to the nation’s historical population centers of the last century. New York, the largest American city, led with a gain of 53,000 residents in the year to July 1, 2008. Los Angeles added about 27,000, the fourth-largest gain, and Chicago lured about 21,000 for the eighth-biggest rise among U.S. cities.

Population growth in Port St. Lucie, Florida, tumbled to about 2 percent in the most recent year, from a rate of 12 percent during a construction boom in 2003-2004.

‘Inability to Sell’

“Inability to sell” depreciated homes has hit migration, said James Diffley, a regional economist with IHS Global Insight, a forecasting firm based in Lexington, Massachusetts.

Frey of Brookings calculated that the share of the U payday loan online.S. population moving in the year that ended in April 2008 was less than 12 percent, the lowest on record.

Housing prices have fallen by the largest amounts in Florida, California, Nevada and Arizona. Prices fell more than 50 percent in Las Vegas and Phoenix, and 47 percent in Miami, in the past two years, according to the S&P/Case-Shiller home-price indexes reported June 30.

“Cities in the older urban core, such as New York, Chicago and Los Angeles, didn’t lose anywhere near as many people and therefore they grew more” in the most recent year, said Kenneth Johnson, senior demographer at the Carsey Institute at the University of New Hampshire.

Growth in Chicago comes after a loss of population during most of the decade, Johnson said. By contrast, suburban cities in markets that have fueled the housing boom were hurt by lack of migration, plus a shrinking in jobs that had been part of the boom, he said.

Retirements Postponed

In addition, cities that have been retirement magnets such as Florida’s suburbs were hurt by declining stock prices, which discouraged people from leaving the workforce and moving, Johnson said.

New Orleans was the single fastest-growing city last year, continuing its rebound from the hurricane devastation of four years ago. The city, which lost more than half its population after Katrina in 2005, has been bolstered by billions in federal spending as well as an increase in tourism.

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U.K. houses held their value for a second month in June as increased demand and a lack of supply supported residential prices, Hometrack Ltd. said.

The average cost of a home in England and Wales was 155,600 pounds ($257,000), the London-based property researcher said in an e-mailed statement today. They stopped falling in May on Hometrack’s measure for the first time in 20 months. From a year earlier, values fell 8.7 percent in June.

“A lack of supply and rising demand have combined to prop up house prices in the last two months,” Richard Donnell, director of research at Hometrack, said in the statement. “It is the demand side where the greatest risk lies as many would-be buyers continue to remain cautious or are unable to obtain sufficient equity or finance to access the market.”

Bank of England policy maker Kate Barker said last week the housing market is still “some way away from normal” and the central bank said banks have curbed mortgage lending to all but the safest borrowers. That may hamper a recovery in the economy from its worst recession in a generation.

The number of new buyers has risen by 36 percent in the past six months, outpacing a 6.4 percent gain in the number of properties for sale, Hometrack said unsecured personal loans. It based its survey on 6,160 responses from real-estate agents and property surveyors.

Housing Demand

In London, demand for housing has exceeded the increase in the number of homes on the market tenfold, Donnell said. The increase in buyer registrations across the U.K. was 4.6 percent in June, compared with 6 percent in May, today’s report showed. The number of agreed sales rose 6.4 percent, compared with 9.4 percent the previous month.

Barker, speaking in testimony to Parliament’s Treasury Committee on June 24, said she would “be cautious about the scale of activity in the next year to 18 months.” The central bank said in a report last week that mortgage lending is now “focused almost entirely” on borrowers with clean credit histories.

U.K. home-loan approvals climbed less than economists forecast last month as the credit squeeze led to the smallest increase in net mortgage lending since records began in 1993. Banks granted 43,414 loans in May, compared with 43,191 in April, the Bank of England said today in London.

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U.K. financial services companies may cut 13,000 jobs in the third quarter even as they expressed rising optimism for the first time in two years, Britain’s biggest business lobby group said.

“Conditions still remain rough but there are signs of some improvement expected in the coming months,” according to Ian McCafferty, the Confederation of British Industry’s chief economic adviser at a press conference in London. Profits, employment and investment remain “on a downward trend,” he said.

The rate of job cuts is slowing, the group’s quarterly financial services survey showed. Financial services companies cut about 17,000 jobs in the first quarter and probably shed 15,000 in the second quarter, said the CBI.

The Bank of England last week said financial institutions remain vulnerable to further shocks. British banks told the survey that revenue declined in the second quarter at the fastest rate since March 1991. Lenders are less optimistic “about the overall business situation” than when they were surveyed in the first quarter, the survey said.

“The rising level of bad debts are a further worry for the industry,” said McCafferty.

Concerns about bank funding were the highest since the survey was introduced in 1989, the CBI said classic car insurance.

“Wholesale funding is still very tight,” said John Hitchins, U.K. banking leader of PricewaterhouseCoopers LLC, which conducted the survey with the CBI. There is “intense competition” for retail deposits, he added.

Insurer Optimism

For the financial services industry as a whole, revenue is expected to rise for the first time next quarter following seven quarters of declines, the CBI said.

Insurance companies are the most optimistic about growth in the three months starting July 1, while customer-owned lenders, known as building societies, anticipate revenue and profitability will “stabilize”. Securities traders and investment managers expect an improvement in their business to be “short-lived,” said the CBI.

The CBI surveyed 73 financial-services companies, including banks, building societies, insurers, brokers and fund managers from May 20 to June 3. The CBI represents about 240,000 companies that employ one-third of Britain’s private sector workforce.

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Leaving behind TARP will likely mean a return to the status quo for many banks — except for those hefty dividends of yesteryear.

Earlier this month, 10 of the nation’s biggest financial firms won their freedom from the government’s Troubled Asset Relief Program. In theory, that should allow these banks to begin raising their quarterly dividend payments to shareholders again.

Many lenders, including JPMorgan Chase (JPM, Fortune 500) and Capital One (COF, Fortune 500), slashed their dividends before accepting bailout money in a bid to preserve capital, and were prevented by TARP rules from boosting them as long as they remained in the program.

This means that struggling banks stuck in TARP, such as Citigroup (C, Fortune 500) and Bank of America (BAC, Fortune 500), will be unable to raise their dividends for the foreseeable future. Both of those lenders have cut their quarterly dividend to a bare minimum of a penny per share.

Yet, experts widely believe that even the healthiest banks are unlikely to reinstate dividends to pre-TARP levels anytime soon.

"I would think that they would be very cautious until this financial crisis is truly behind us," said Milton Ezrati, senior economist and market strategist at Lord Abbett.

Banks broadly began to cut their dividends in early 2008 in a bid to protect their balance sheets against escalating loan losses.

Even though many investors believe the worst could be over for banks, the threat of further loan losses still looms large for many lenders — particularly in commercial real estate and credit cards.

In a report published this week, Moody’s noted that credit-card charge-offs, or loans a bank considers to be uncollectable, broke through the 10% level in May. The rating agency added that it anticipated that number to keep climbing, however, before peaking at 12% sometime in 2010.

As such, banks are still working hard to shore up their capital levels. And while regulators do not explicitly forbid banks that are free of TARP from raising their dividends, the financial industry overall is preparing for even more regulation.

One proposal floated by the White House last week that appears to have widespread appeal would require banks to hold significantly more capital at any given time so they are better positioned to absorb severe losses in the future.

So until those new standards are hammered out by regulators and lawmakers, banks will likely stay pat on their dividend policy, notes Jill Evans, a portfolio manager for Alpine Funds’ Alpine Dynamic Dividend Fund paydayloan.

"It would be premature that a company would raise their dividend ahead of that," she said.

Days of fat dividends may be over

At one time, banks and financial firms were a virtual goldmine for dividend investors, making up approximately 30% of all dividends paid out by companies in the S&P 500.

Nowadays, that number stands at just 9.1%, notes Howard Silverblatt, senior index analyst at Standard & Poor’s.

It’s likely to stay in that range for some time.

JPMorgan Chase chief executive officer Jamie Dimon suggested at an investor conference last month that banks may have paid out too big of a dividend in the years leading up to the crisis. Much of that was due to pressure from shareholders.

But given the challenges that banks are currently facing, analysts are skeptical that investors are likely to demand dividend increases anytime soon.

Still, top-tier banks may eventually have no choice but to address the issue if recent signs of a recovery within the industry and economy are sustainable.

Anatoliy Cherevach, an analyst at the Dividend Value Fund at Cohen and Steers, suspects that JPMorgan Chase and Minneapolis-based U.S. Bancorp (USB, Fortune 500) could move to raise their dividend as early as next year.

Goldman Sachs (GS, Fortune 500) and Northern Trust (NTRS, Fortune 500), two financial firms that left their dividend untouched amid the crisis, are two other companies that may consider boosting their dividends before long, Cherevach added.

Of course, some banks could view dividend increases as a way to attract even more investors, which could allow them to raise capital in the future at a higher price.

But with conditions in the financial markets and economy still highly uncertain, few banks would want to raise their dividend if they fear they’d have to cut it again down the road due to a capital squeeze.

"Once you have done a dividend increase, then to take it back, is very hard on the stock price," Ezrati said. 

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South Asia’s “historic elections” in the past 18 months have advanced democracy in the region and may spur economic integration, said Sheel Kant Sharma, secretary general of the South Asian Association for Regional Cooperation.

The South Asian grouping, called Saarc, which includes India, Pakistan, Sri Lanka, Afghanistan, Nepal, Bangladesh, Maldives and Bhutan, has struggled to give a boost to the free- trade pact they adopted in 2004. Trade between Saarc members is 5 percent of the countries’ total, compared with 55 percent among European Union nations, according to the Federation of Indian Chambers of Commerce and Industry.

“There is democracy everywhere in South Asia now and so the confluence increases at overall policy levels,” Sharma said in an interview at the Saarc headquarters in Kathmandu, Nepal, on June 24. “All the countries are wedded to the principle of growing together.”

Since last year, Nepal ended its 240-year-old monarchy, the Maldives overthrew Maumoon Abdul Gayoom’s 30-year regime, Pakistan got a new government after almost a decade’s reign by coup leader Pervez Musharraf and Bangladesh held national polls in December for the first time since 2001. Indian Prime Minister Manmohan Singh won re-election in May.

Even though trade in the region has been frustrated by hostility between nuclear weapons-armed India and Pakistan, the two governments have pledged to restart peace talks by next month. Saarc members are also working on a plan to cut non- tariff barriers, improve transport connectivity and reduce their “sensitive list” — items that are banned from trading — by at least 25 percent by the end of the year, Sharma said.

‘Stumbling Block’

“There is an attempt to get the economic agenda going in Saarc,” said N. Bhaskara Rao, chairman of the Center for Media Studies in New Delhi. “But bilateral problems between India and Pakistan and unrest within some member states will be a stumbling block.”

Saarc was established in 1985 to improve livelihoods in a region that is home to half the world’s poor. After 24 years, the nations in Saarc, where a quarter of the world’s population lives, contribute less than 2 percent to global commerce.

Economic progress in South Asia has suffered because of the rivalry between India and Pakistan, which account for four- fifths of the region’s $1.3 billion economy. India accuses Pakistan of supporting armed extremists in Jammu and Kashmir, its only Muslim-dominated state faxless payday loan. Pakistan denies it and says it offers only moral support to separatists.

Peace Talks

India’s Prime Minister Singh said June 17 that peace talks with Pakistan may start by July. Pakistan’s foreign office said June 25 that talks between the two sides were “unavoidable” for “durable” peace in the region. Talks between the two sides were stalled following the Nov. 26-29 attacks in India’s financial capital of Mumbai that killed 166 people. India blamed the Pakistan-based Lashkar-e-Taiba for carrying out the assault.

Saarc members also face internal problems. Pakistan and Afghanistan are grappling with the growing influence of Taliban and al-Qaeda fighters. In Nepal, political chaos has flared again as Maoist supporters staged nationwide demonstrations after their leader Puspa Kamal Dahal resigned as prime minister last month.

“As part of the political process, there have been differences in Nepal, but they are trying to sort them out within the political system,” said Sharma. “In Pakistan, the radicals were beaten in the elections and what came forward was a democratic government.”

Tamil Tigers

Similarly in Bangladesh, elections heralded a new government, “which is very reassuring,” Sharma said. In the Maldives, the long incumbency of the previous administration “led to popular discontent” and that has changed, while Sri Lanka has been able to deal with its problems after defeating the Tamil Tiger rebels, the secretary general added.

“I would view the electoral developments in the region as positive and an agent for change,” Sharma said.

He said member countries are working to harmonize customs- clearing procedures and have backed plans to put consignments originating in Saarc countries and destined for other Saarc nations on a fast track in terms of time taken for clearance.

Saarc has also identified developing ten regional road corridors, five railway corridors, two inland waterway corridors, ten maritime corridors and three aviation gateways to improve transport links in the region, Sharma said.

The New Delhi-based Federation of Indian Chambers of Commerce and Industry said bolstering democracy across South Asia would give a fillip to Saarc, and that if tariffs were slashed, intra-regional trade could rise by as much as four times to $100 billion in five years.

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The price of a gallon of gas dipped Monday, snapping a 54-day run-up.

Nationwide, the average price for a gallon of regular unleaded gasoline edged down to $2.69, shaving just three-tenths of a cent from the previous day’s average of $2.693, according to motorist group AAA.

The single day turnaround in prices does not promise a trend, but after a relentless climb in recent weeks, any pull back is welcome.

Prices have risen since the end of April, when the national average was $2.05 a gallon.

Two states still have gasoline above $3 a gallon. In California, the price of a gallon of gas averaged $3.027; in Hawaii, the average was $3.057.

"Father’s Day might have represented the highest price you will pay for the next few months or so," said Tom Kloza, chief oil analyst at the Oil Price Information Service, which provides the information for AAA.

Kloza expects to see gas prices decrease between 5 to 15 cents in the upcoming weeks, as prices historically start deckling around July 4.

Retail gas prices follow wholesale gas prices and wholesale gas prices move off of crude oil, which is the main ingredient in retail gasoline. Wholesale gas prices fell between 10 and 20 cents last week, and that decline is working its way into the retail market.

Crude oil has more than doubled in price since mid-December, when it reached as low as $33 affordable health insurance colorado.87 a barrel. At 9:30 a.m. ET on Monday, oil was trading under $68 a barrel.

But Kloza said the spike from December lows may have been a bit over-exuberant. Investors "probably got too enthusiastic" about the possibility of economic recovery and sent oil prices up too quickly.

He added that the fact that the tension in Iran did not send oil prices soaring "tells you that the market was mature."

Oil prices and gas prices need to recalibrate in the face of the reality of a long, slow recovery. A surge in gas prices threatens to derail any economic recovery. With consumers having to pour more dollars into their gas tank, the they will have to cut back in other areas.

Furthermore, consumers are already on edge with unemployment rates continuing to inch up. Friday, the government reported that jobless rates increased in forty-eight states and the District of Columbia.

Has the rebound in gas prices caused you financial hardship? Are you spending less on other items to help with the cost of driving? Have you postponed summer driving plans? We want to hear your experiences. E-mail your story to realstories@cnnmoney.com and you could be part of an upcoming article. For the CNNMoney.com Comment Policy, click here. 

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The Bank of Japan’s Tankan survey next week will probably show that large manufacturers consider the worst of the recession to be over.

An index of sentiment among large makers of electronics, cars and other goods will rise to minus 43 from a record low of minus 58 in March, economists predict the report will show on July 1. A negative number means pessimists outnumber optimists.

“We’re seeing a rebound from rock bottom,” said Jan Lambregts, head of financial markets research at Rabobank International in Hong Kong. “For businesses it’s not Armageddon anymore, but it’s still a tough environment.”

Some $2.2 trillion in stimulus worldwide helped stabilize overseas sales for companies from Nissan Motor Co. to Teijin Ltd., and leaner inventories allowed manufacturers such as Nippon Steel Corp. to raise production. Still, companies saddled with idle factories and falling profits are likely to cut investments and jobs, limiting the scope of a recovery.

The Nikkei 225 Stock Average fell 2.8 percent today and has lost 5.8 percent since reaching a nine-month high on June 12 on renewed concern the economy may remain weak. The yen rose 0.8 percent to 95.06 per dollar from 95.87 late yesterday, eroding the value of exporters’ profits earned abroad.

Analysts surveyed by Bloomberg estimate the economy will resume growth in the three months ending June 30 after last quarter’s record 14.2 percent annualized contraction.

Chinese Demand

Easing pessimism among Japan’s manufacturers has much do with the outlook for China, where 4 trillion yuan ($586 billion) in government spending is feeding demand for Japan’s heavy equipment, autos and materials.

Nissan’s sales in China rose 37 percent in April, boosted by a subsidy that halves the consumption tax on small cars. Teijin, a plastics maker, last month resumed full production at its plant near Shanghai and may have to raise domestic output to fill orders, spokesman Tatsuya Inaba said last week.

U.S. President Barack Obama’s stimulus measures are also benefiting Japanese businesses. Mazda Motor Corp. said its U.S. sales will pick up because of the Obama administration’s “cash for clunkers” program that gives as much as $4,500 to consumers who trade in old vehicles for new ones.

Consumers Less Gloomy

Japan’s 25 trillion yen ($260 billion) in extra spending pledged since October has pushed consumer sentiment to a 14- month high. Sales of electronics rose 18 percent since the government last month introduced a program encouraging consumers to buy eco-friendly products, according to Tokyo- based researcher Gfk Marketing Service Japan Ltd online cash advance.

Nippon Steel plans to use 60 percent of capacity at its biggest mill this month, up from 50 percent previously, as its customers boost output to replace inventories. Japanese companies increased production at the fastest rate in 56 years in April from a month earlier.

Companies are also finding it easier to borrow money as debt markets thaw and the government guarantees more loans. Bankruptcies fell in May for the first time in 11 months. Yields on three-month commercial paper, a source of short-term funds, dropped about four-fifths this year. Sony Corp. raised 220 billion yen this month through its biggest-ever bond sale.

Still, business sentiment at minus 43 would remain worse than at any time during the previous recession in 2002. Exports and output have slumped by more than a third from last year’s levels and, as of April, manufacturers were using only about half of their productive capacity.

‘Nasty Work’

That’s putting pressure on managers to cut jobs and slash investment. Large companies plan to reduce spending by 7 percent in the current business year, the biggest pullback since 2002, economists predict the Tankan survey will show.

“Companies are adjusting to new realities,” said Martin Schulz, senior economist at Fujitsu Research Institute in Tokyo. “They’re cutting back and reviewing business plans; it’s nasty work and it’s not good for the economy.”

Toyota Motor Corp., expecting its second year of losses, will reduce capital investment by 36 percent this year and cut pay for factory workers by 15 percent. The company estimates it will sell only 6.5 million vehicles this year, less than the 10 million it’s equipped to build.

Sentiment at Japan’s service companies will improve to minus 26 from minus 31, economists said.

A lack of demand has started to weigh on prices, sparking concern the economy may slip back into the deflation that caused wages to fall by about 10 percent in the decade through 2005. Consumer prices fell for a second month in April, wages have slumped for 11 months and companies including supermarket operator Daiei Inc. have lowered prices to entice customers.

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The Treasury Department warned U.S. financial institutions Thursday that the North Korean government may resort to "deceptive financial practices" to get around economic sanctions.

The advisory from the Treasury’s Financial Crimes Enforcement Network comes as the Obama Administration steps up its efforts to prevent North Korea from furthering its nuclear weapons program.

The government said it remains concerned about "high-quality" counterfeit U.S. currency being passed from North Korea and urged banks to scrutinize attempts by North Korean customers to make large cash transactions.

Banks should be wary of attempts to suppress the identity or origin of transactions made by North Korean clients, the advisory said. Money transfers made via third parties, and repeated transfers that appear to have "no legitimate purpose" should also raise red flags.

North Korea drew international criticism in May for conducting a nuclear test and firing several ballistic missiles into the sea.

In June, the United Nations Security Council adopted a resolution that called for stricter measures to prevent Pyongyang from obtaining financial assets that could contribute to the communist regime’s nuclear weapons activities.

The resolution also banned financial transactions related to the sale of arms from North Korea and broadened a ban on the import of weapons.

The reclusive nation has a history of evading sanctions and engaging in illicit activities such as counterfeiting, drug running and insurance fraud, said Michael O’Hanlon, a senior fellow at the Brookings Institution who studies North Korea business cards on sale.

He said North Korea will "definitely try" to avoid the current restrictions. "It’s consistent with their past behavior and they certainly don’t consider it beneath their dignity," he said. "They’ll find some new way to cheat."

However, he added that any money gained by skirting sanctions is likely to be minimal.

"They don’t need to be that successful, because they’re only trying to prop-up a small financial elite," he said.

Meanwhile, the U.S. military is tracking a North Korean ship believed to be carrying illicit weapons or technology.

In accordance with the recent U.N. resolution, the U.S. will request permission to search the ship or press any port the ship docks in to inspect it for illegal materials, Adm. Michael Mullen, chairman of the Joint Chiefs of Staff, told reporters at a news conference Thursday.

However, the United States nor any other navy will forcibly board a North Korean ship without permission, Mullen said. North Korea has warned that any effort to stop one of its ships would be considered an act of war. 

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The Obama administration’s overhaul of financial-industry rules faces a lobbying assault on Capitol Hill, as lawmakers question the Federal Reserve’s role and bankers say the plan may hinder economic growth.

President Barack Obama announced his proposals yesterday in the White House, and banks, hedge funds and commodities traders quickly pointed to provisions they didn’t like. The American Securitization Forum, whose members include Goldman Sachs Group Inc. and JPMorgan Chase & Co., said Obama’s plan to fix the mortgage market “may not be the most effective way.”

Financial firms, some of them blamed for causing the credit crisis, say they want to make sure the industry isn’t further damaged by ill-conceived or burdensome regulations. They want to limit costs that may eat into profits and eliminate rules that give competitors an advantage, said Ernest Patrikis, a partner in New York law firm White & Case LLP.

“Anytime you have a new regulatory regime that’s this sweeping, there will be a lot of lobbyists engaged on all sides,” said Peter Peyser, principal at the Washington lobbying firm Blank Rome Government Relations LLC. “The momentum is clearly in the direction of more regulation.”

House Financial Services Committee Chairman Barney Frank said in an interview yesterday that Obama’s plan “is overwhelmingly likely to be passed substantially” in its original form. Even so, he and other top Democrats in Congress, who will guide the legislation, disagree with cornerstones of the proposal.

Fed’s Role

Obama would give the Federal Reserve the power to regulate all firms that pose a threat to financial stability. Senate Banking Committee Chairman Christopher Dodd said yesterday in an interview that the matter is “still an open question.” Frank said he also had concerns about the Fed’s ability to do the job. “We’ll see what alternatives people have to this,” he said.

Financial-industry executives were working to shape Obama’s plan well before it was announced, Peyser said. Some demands from lobbyists were already incorporated.

The financial, insurance and real estate industries contributed $39.7 million to Obama’s 2008 campaign, compared with $28.9 million for Republican rival John McCain, according to the Center for Responsive Politics. Four years earlier, those industries gave $34.3 million to President George W. Bush and $14.6 million to Democrat John Kerry.

On Dec. 16, Obama’s staff met with some of the industry’s biggest trade groups, including the Securities Industry and Financial Markets Association, the American Bankers Association, the Financial Services Forum, the Mortgage Bankers Association and the Financial Services Roundtable.

Bankers Unhappy

The American Bankers Association still isn’t happy with Obama’s plans for a new agency to monitor bank-lending practices whose mandate may “go well beyond consumer protection,” the group said yesterday in a statement online payday loans. The group vowed to fight for changes, he said.

“The administration’s proposal is so vast and controversial that it will be extremely difficult to enact and will produce great uncertainty in the financial markets,” the association’s CEO, Edward Yingling, said in the statement. “It needlessly rips apart all the existing regulatory agencies.”

Other Obama measures likely to encounter pushback include higher capital requirements for banks deemed “too big to fail” and a rule that brokers act in their clients’ best interests when doling out investment advice.

How Much Capital?

“Stronger capital standards is really going to be an issue,” said Patrikis, a former general counsel for the New York Federal Reserve. “It all becomes a cost factor.” Patrikis was the general counsel of American International Group Inc. from 1999 to 2006.

The Washington-based Hedge Fund Association said in a statement that Obama’s registration requirements would be “unduly burdensome” on firms with less than $250 million under management and “could have a significant negative impact on the hedge fund industry and U.S. economy.”

Peyser said he expects “significant lobbying” on regulation of the insurers, hedge funds and private equity. “There’s a lot of detail that’s not here, and those industries will be working very hard to try to limit the scope of the regulation,” he said.

David Hirschmann, president and chief executive of the U.S. Chamber of Commerce’s Center for Capital Markets, said “we can’t simply insert new regulatory agencies and hope that we’ve covered our bases.”

Battle Brewing

The brewing legislative battle recalls the industry’s reluctance to accept reforms after the 1929 stock-market crash, said Charles Geisst, a finance professor at Manhattan College in New York and author of a history of Wall Street.

“I don’t think anyone can buy the argument that by regulating too tightly, we’ll choke off capitalism,” Geisst said. “That argument is as shallow now as it was then.”

Banks may benefit from Obama’s decision not to merge Washington’s biggest financial regulators into a single agency, Patrikis said. Only the Office of Thrift Supervision and Office of the Comptroller of the Currency would be combined into a single National Bank Supervisor, with the Federal Reserve and Federal Deposit Insurance Corp. remaining apart.

“It doesn’t eliminate this lack of accountability and supervision for a major banking organization,” Patrikis said. “Who’s responsible, the Fed or the Comptroller of the Currency? Those issues are still there. The industry probably loves being able to play between the two.”

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The Obama administration’s overhaul of financial-industry rules faces a lobbying assault on Capitol Hill, as lawmakers question the Federal Reserve’s role and bankers say the plan may hinder economic growth.

President Barack Obama announced his proposals yesterday in the White House, and banks, hedge funds and commodities traders quickly pointed to provisions they didn’t like. The American Securitization Forum, whose members include Goldman Sachs Group Inc. and JPMorgan Chase & Co., said Obama’s plan to fix the mortgage market “may not be the most effective way.”

Financial firms, some of them blamed for causing the credit crisis, say they want to make sure the industry isn’t further damaged by ill-conceived or burdensome regulations. They want to limit costs that may eat into profits and eliminate rules that give competitors an advantage, said Ernest Patrikis, a partner in New York law firm White & Case LLP.

“Anytime you have a new regulatory regime that’s this sweeping, there will be a lot of lobbyists engaged on all sides,” said Peter Peyser, principal at the Washington lobbying firm Blank Rome Government Relations LLC. “The momentum is clearly in the direction of more regulation.”

House Financial Services Committee Chairman Barney Frank said in an interview yesterday that Obama’s plan “is overwhelmingly likely to be passed substantially” in its original form. Even so, he and other top Democrats in Congress, who will guide the legislation, disagree with cornerstones of the proposal.

Fed’s Role

Obama would give the Federal Reserve the power to regulate all firms that pose a threat to financial stability. Senate Banking Committee Chairman Christopher Dodd said yesterday in an interview that the matter is “still an open question.” Frank said he also had concerns about the Fed’s ability to do the job. “We’ll see what alternatives people have to this,” he said.

Financial-industry executives were working to shape Obama’s plan well before it was announced, Peyser said. Some demands from lobbyists were already incorporated.

The financial, insurance and real estate industries contributed $39.7 million to Obama’s 2008 campaign, compared with $28.9 million for Republican rival John McCain, according to the Center for Responsive Politics. Four years earlier, those industries gave $34.3 million to President George W. Bush and $14.6 million to Democrat John Kerry.

On Dec. 16, Obama’s staff met with some of the industry’s biggest trade groups, including the Securities Industry and Financial Markets Association, the American Bankers Association, the Financial Services Forum, the Mortgage Bankers Association and the Financial Services Roundtable.

Bankers Unhappy

The American Bankers Association still isn’t happy with Obama’s plans for a new agency to monitor bank-lending practices whose mandate may “go well beyond consumer protection,” the group said yesterday in a statement fast payday loan no faxing. The group vowed to fight for changes, he said.

“The administration’s proposal is so vast and controversial that it will be extremely difficult to enact and will produce great uncertainty in the financial markets,” the association’s CEO, Edward Yingling, said in the statement. “It needlessly rips apart all the existing regulatory agencies.”

Other Obama measures likely to encounter pushback include higher capital requirements for banks deemed “too big to fail” and a rule that brokers act in their clients’ best interests when doling out investment advice.

How Much Capital?

“Stronger capital standards is really going to be an issue,” said Patrikis, a former general counsel for the New York Federal Reserve. “It all becomes a cost factor.” Patrikis was the general counsel of American International Group Inc. from 1999 to 2006.

The Washington-based Hedge Fund Association said in a statement that Obama’s registration requirements would be “unduly burdensome” on firms with less than $250 million under management and “could have a significant negative impact on the hedge fund industry and U.S. economy.”

Peyser said he expects “significant lobbying” on regulation of the insurers, hedge funds and private equity. “There’s a lot of detail that’s not here, and those industries will be working very hard to try to limit the scope of the regulation,” he said.

David Hirschmann, president and chief executive of the U.S. Chamber of Commerce’s Center for Capital Markets, said “we can’t simply insert new regulatory agencies and hope that we’ve covered our bases.”

Battle Brewing

The brewing legislative battle recalls the industry’s reluctance to accept reforms after the 1929 stock-market crash, said Charles Geisst, a finance professor at Manhattan College in New York and author of a history of Wall Street.

“I don’t think anyone can buy the argument that by regulating too tightly, we’ll choke off capitalism,” Geisst said. “That argument is as shallow now as it was then.”

Banks may benefit from Obama’s decision not to merge Washington’s biggest financial regulators into a single agency, Patrikis said. Only the Office of Thrift Supervision and Office of the Comptroller of the Currency would be combined into a single National Bank Supervisor, with the Federal Reserve and Federal Deposit Insurance Corp. remaining apart.

“It doesn’t eliminate this lack of accountability and supervision for a major banking organization,” Patrikis said. “Who’s responsible, the Fed or the Comptroller of the Currency? Those issues are still there. The industry probably loves being able to play between the two.”

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