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Morning Scan: Fed Gives Everyone a Reason to Revisit the Financial Crisis; HSBC Earnings

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HSBC Earnings: HSBC's profit rose 9% last year to $22.6 billion, a sum that was short of analysts' $24.5 billion expectations. Per the Journal, "shutting businesses and the continuing runoff of its U.S. consumer finance business" hurt revenue. The bank addressed investor concerns over its exposure to emerging markets, particularly Asia, saying it was "optimistic about the longer-term prospects," but that it did "anticipate greater volatility in 2014." HSBC revealed it plans to seek approval to lift the new EU bonus cap from 100% of its top executives' salary to 200%. Also disclosed as a part of earnings: CEO Stuart Gulliver made £8.03 million in 2013 "the last year before the EU bonus cap takes effect." He made £7.53 million in 2012.

Released: The media had a field day on Friday (that, presumably, extended into the weekend) after the Federal Reserve released transcripts from its 2008 Federal Open Market Committee meetings. Some takeaways culled from the some 1,500 pages: The Fed misread the financial crisis back in 2008. It fretted (or panicked) over reaction to the demise of Lehman Brothers. It was also "really, really concerned about Treasury fails" around that time. It had its Libor suspicions. Then-chairman Ben Bernanke explained the difference between quantitative easing and credit easing and now chair Janet Yellen pretty much called the recession. More on Yellen, per the Times' Nathaniel Popper: "What the transcripts show is a woman who was constantly pushing her peers — and also cleverly cajoling them — to do more to help ordinary households, not just financial institutions. At the same time, she urged her colleagues to look at the flaws in the banks that caused the crisis in the first place." For those who can't get enough of crisis stuff, the Times put together an interactive piece (so many charts!) on the transcripts and the Journal curated the "gallows humor" that took place at the meetings. (A sample tagged "TMI, Chairman Bernanke, TMI: "I play Jekyll and Hyde quite a bit and argue with myself in the shower and other places.") The Times has the full transcripts available on its website, though you can also find them here.

Reduced: Deutsche Bank plans to cut its U.S.-based assets "by around a quarter to $300 billion" to comply with the Federal Reserve's new foreign bank rules. The bank plans to reassign these assets to Europe or Asia. Wall Street Journal, Financial Times

Wall Street Journal

The U.S. Justice Department and the Internal Revenue Service are examining "Americans' use of Swiss insurance products to determine if they have been used to hide assets."

Big banks, particularly Citigroup and Morgan Stanley, are positioned to profit from fees from financing bankrupt firm Energy Future Holdings. "In this case, it looks like these banks are taking a piece of flesh at every turn," a source tells the paper.

An anonymouse tells the paper that Mark Karpelès, chief executive officer of Mt. Gox, has resigned from the board of the Bitcoin Foundation. The resignation follows a spate of technical issues that ultimately led the bitcoin exchange in February to halt withdrawals indefinitely.

Financial Times

More fodder for the debate over whether the U.S. Postal Service should offer financial services: RBS plans on "piggybacking on the UK’s vast network of Post Office branches." Per the paper, "later this year, personal and business customers of RBS and its NatWest brand will be able to pay-in cash and cheques at one of the Post Office's 11,500 locations." The move could herald a number of RBS branch closures.

New York Times

Credit Suisse paid $196 million to settle accusations it advised clients in the U.S. without first registering with the Securities and Exchange Commission. It also admitted wrongdoing as part of the SEC settlement.

Columnist Fiona Maharg-Bravo on BBVA's acquisition of Simple: "Pouncing on Simple, though, increases the possibility that banks can find a way to mastermind their own technological disruption. And BBVA is well placed to lead the charge, having opened a Silicon Valley-based venture capital firm to keep tabs on start-ups — and buy promising ones like Simple."

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(Image: Bloomberg News)

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