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Is the Fed Getting Ready to End QE3?; U.S. Pledges Cyber-Spying Crackdown

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Whispers at the Federal Reserve: Is the Fed getting ready to end its stimulus efforts? That's what some folks are wondering after minutes from the January Federal Open Market Committee meeting indicated "widening divisions among [Fed] officials" about the central bank's current monetary policy (which, recall, involves monthly purchases of about $85 billion in long-term bonds and mortgage-backed securities for an indefinite period). The stock market posted its biggest loss of the year upon learning "many" officials had expressed concerns that the ongoing QE3 could encourage excessive risk-taking and promote inflation. These concerns could lead the Fed to "taper or end" its asset purchases before unemployment improves substantially, an FT article notes. But investors' worry over QE3's imminent end may be premature since Fed chairman Ben Bernanke remains committed to the program. "We view Mr. Bernanke as being firmly in charge of the committee, and very dovish indeed," one analyst quoted in the Times wrote in a note to clients. He went on to predict the asset purchases will continue at the current pace for the rest of the year. "The prevailing sentiment at the Fed, as conveyed by the minutes as well as recent remarks, is that the central bank's efforts to pump tens of billions of dollars into the economy every month should not end anytime soon," a Washington Post story echoes.

U.S. Pledges Cyber-Spying Crackdown: The White House said on Wednesday it plans to step up efforts to fight corporate cybercrime, following a string of cyberattacks at major U.S. companies. These efforts could include increased diplomatic action and heightened trade restrictions on products gleaned from stolen trade secrets. "The new strategy is aimed at producing a change in Beijing," the Journal notes, which is understandable given that Chinese cyberspies have, as the Post reports, hacked "almost all" Washington institutions. The Times, a recent hacking victim, says it's becoming more common for companies to publicly admit they have been "attacked by sophisticated cybercriminals."

Wall Street Journal

Serving, perhaps, as a foil to former Citigroup CEO and chairman Sandy Weill, current Citi chairman Michael E. O'Neill, who, following the financial crisis, "was among a small group of directors who …. urged the company to weigh the pros and cons of splitting up," no longer considers exploring a break-up "among his top priorities." Reports of this about-face come courtesy of people familiar with the matter.

A new report finds the five biggest U.S. banks have provided "$19 billion in mortgage debt write-downs to some 240,000 borrowers" under the terms of a foreclosure settlement reached last year.

The National Futures Association will discuss the possibility of banning Jon Corzine, former MF Global CEO, from the futures industry for life. Corzine declined to comment for the article.

Financial Times

The U.K.'s Financial Services Authority is fighting back against allegations it was slow to act on the Libor Scandal. Per the FSA: "We were aware of and engaged with the enquiries made by the U.S. regulatory authorities during 2008 and 2009 and provided assistance to the CFTC from the outset of its investigation, by obtaining documents and information from Barclays."

A "small cadre of financial firms" have been getting back into the residential mortgage bond market, "buying and securitizing mortgages that do not qualify" for certain federal support.

New York Times

Two "custom-made ferry boats" that Goldman Sachs purchased two years ago are now in service, carrying passengers, "bank employees or not," across the Hudson River.

Economist Simon Johnson supports a Federal Reserve proposal on money-market fund reform in a new op-ed. Per the post: "We need more transparency and honesty around the nature of these investment products. This is good for consumers and absolutely essential for system stability."

Correction: Yesterday's Scan misspelled the name of HSBC Panama's buyer, Bancolombia, and its country of origin, which is, in fact, Colombia, South America.

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