Receiving Wide Coverage ...
Failed-Bank Fallout: D&O insurance premiums are way up for small banks as the FDIC goes after former executives of failed institutions, the Journal reports. Meanwhile, the FDIC has kept quiet about "scores" of settlements in failed-bank cases the last few years, thanks to "no press release" clauses, a Los Angeles Times investigative piece revealed. Though these clauses can seal a deal with a defendant who wants to avoid embarrassment, they represent "a major policy shift from previous crises, when the FDIC trumpeted punitive actions against banks as a deterrent to others." Wall Street Journal, Los Angeles Times
Mary Jo White: The SEC nominee's confirmation hearing is today. Lawmakers "will have to weigh two seemingly contradictory versions of the attorney. In one version, Ms. White is a no-holds-barred crime fighter known for stretching the law to jail mob bosses and international terrorists. In another, Ms. White is a friend of Wall Street," says the Journal. While Democrats on the Senate Banking Committee will likely focus on the "friend of Wall Street" part, Republicans may express qualms about the "stretching the law" stuff, the article says. Wall Street Journal, New York Times, Washington Post
The Revolving Door: Speaking of "friends of Wall Street" (broadly defined) … Former SEC chairman Mary Schapiro has been nominated to the board of General Electric; former Massachusetts Senator Scott Brown has joined the law firm of Nixon Peabody, "where he will focus on matters relating to the financial services industry" and "will be leaning heavily on his Washington contacts to drum up business for the firm." Though not lobbying, the firm says. New York Times, Boston Globe
Too Big to Fail? Moi? Trade groups for large banks disputed the idea that their members enjoy an implied subsidy to funding costs from the perception that they would be bailed out in a crisis. If anything, the lobbyists argue, big banks are now disadvantaged under Dodd-Frank. Wall Street Journal, Financial Times
Wall Street Journal
An editorial suggests that the administration "cut off all banks doing business with ...North [Korea] from U.S. clearing systems" to toughen sanctions against the Kim regime.
New York Times
"Realities Behind Prosecuting Big Banks" — "There is a powerful argument to be made that prosecutors should focus on the individuals responsible for the misconduct," rather than the bank as a whole, writes columnist Andrew Ross Sorkin. He quotes from a famous law article about the Arthur Andersen case: "There is something fundamentally wrong about condemnation of one person for the actions of another, and if this is true for individuals, it is at least somewhat true when corporations, consisting of many component parts, are blamed for the actions of one component part." For more on the collateral damage issue, see this BankThink post, which generated a lively discussion.
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