Breaking News This Morning
Settlement: As speculated, JPMorgan Chase has reached a settlement with the Securities and Exchange Commission related to Bear Stearns' mortgage backed securities sales practices, Bloomberg reports. Details on the terms of the settlement are scarce, but JPMorgan did say in the filing "the agreement in principle is subject to approval by the SEC, as well as court approval."
Receiving Wide Coverage ...
The Day(s) After the Election: The presidential election continues to dominate the news cycle, with the focus, as predicted, turning to whether Congress and a re-elected President Obama will be able to strike a deal regarding the fiscal cliff. Some signs point to "yes" with Speaker of the House John Boehner announcing at a press conference yesterday that Republicans were "willing to accept new revenues" and "do what's best for our country." But other news outlets — specifically the FT — argue a resolution might not be so imminent since friction remains over whether all the Bush tax cuts should be extended. The paper points to another statement Boehner made at the press conference indicating Republicans may hold firm on their stance the tax cuts should stay in play: "A 'balanced' approach isn't balanced if it means higher tax rates on the small businesses that are key to getting our economy moving again and keeping it moving."
Meanwhile, Dealbook appears a bit obsessed with how Wall Street should approach a second-term Obama administration, with one article suggesting big financial institutions may "pay a price" for pushing so hard for Republican candidate Mitt Romney. Another article, however, argues that Obama's re-election "is unlikely to present a doomsday situation" some financial institutions may expect as lobbyists will now move to clarify or "tame" key parts of Dodd-Frank, instead of pushing for their repeal. Additionally, banks "plan to attack the fiscal cliff and other tax policies, a chief concern among their many corporate clients." The site also has an article outlining what Wall Street should expect from Elizabeth Warren, a topic American Banker readers may already be familiar with.
Wall Street Journal
Morgan Stanley is making an effort to reassure its investments bankers that the recent management shake-up — in which investment banking chief Paul Taubman chose to resign following the promotion of his former co-head Colm Kelleher — won't diminish their role at the financial institution. Chief Executive James Gorman assured employees in a memo that Morgan Stanley would "continue to build on our leadership position in investment banking and capital markets."
ING plans to layoff 2,400 employees in its insurance and banking arm over the next two years "even as the bank completes the divestments and demergers forced on it as part of its bailout during the financial crisis." The announcement was made during third-quarter earnings, which "were far below analysts' consensus expectations."
Also relaying bad news during earnings was French bank Société Générale, which "reported an 86% fall in quarterly net profit" and Germany's Commerzbank, which saw profits rise over the third quarter of last year, but also reported it expects "rising loan-loss provisions and lower operating profits in the final three months of the year."
This op-ed suggests customers no longer feel any loyalty to the financial institutions they do business with and that it may, in fact, be impossible to get that loyalty back.
As one method of restoring trust, U.K. regulator and "The Dog and the Frisbee author" Andrew Haldane is urging banks and policymakers to "to create a common technology platform for retail banking that would function as a 'public utility' and spur greater competition in the sector."
New York Times
The French and Belgian government is electing to inject "an additional 5.5 billion euros" into troubled bank Dexia, which has continuously struggled since 2008 when Paris and Brussels initially agreed to "shore" the bank up with $6 billion euros. The latest bailout of the bank, which was nationalized in 2011 in another effort to minimize larger negative impacts, is pending approval from the European Commission.