Receiving Wide Coverage… U.K. to Sell $3B Stake in Lloyds: The British government is planning to sell its stake in Lloyds Banking Group as it prepares to exit its ownership of the lender next spring. Proceeds of the sale will be used to pay down national debt, the Treasury has said. About $3 billion of shares are being offered to the general public at a 5% discount, and there will likely be a sale to institutional
Receiving Wide Coverage... Ben's Book Tour: Ben Bernanke's memoir detailing his role in America's response to the financial crisis, titled "The Courage to Act," is set to be released Monday. While reviews have yet to come out, the book received some criticism for its debatably hyperbolic title when it was announced in April.
Receiving Wide Coverage ... Morgan Stanley Promotes Two: The investment bank has rewarded two of its star employees with big promotions, bringing them into the upper echelon of management, Financial Times reported. Edward Pick, who oversaw the resurgence of the bank’s stock trading operations, is now global head of sales and trading. And Dan Simkowitz became the head of Morgan Stanley’s investment-management division. The two men will also join the bank’s operating committee. The Simkowitz move
Wall Street Journal With the EMV liability shift to merchants going into effect Thursday, First Niagara Financial Group is bucking expectations and will roll out chip-enabled credit and debit cards that require customers to use a personal identification number rather than a signature. In the lead up to the liability shift, the card industry has chosen chip-and-signature as its standard, despite concerns that having the chip alone does little to curb card fraud. In instituting chip-and-PIN
Wall Street Journal Big banks are ramping up efforts to retain and promote women leaders, the paper reports. The article takes a look at initiatives including a Citigroup symposium that brought together 50 senior women to discuss ways to improve gender diversity and Morgan Stanley’s attempt to get more male managers involved in its development program for women at the vice president level. Whether these programs will successfully propel more women into the C-suite remains to
Receiving Wide Coverage ... The Card Fraud Blame Game: The switch to chip-enabled cards should be pretty smooth for the average consumer, according to the New York Times. While it may be jarring to dip rather than swipe cards at retailers' payment terminals, the gesture should be old hat soon enough. The paper also raises the question of whether chip cards would be more effective at preventing fraud if customers were simultaneously required to enter four-digit
Receiving Wide Coverage ... Another Day, Another Probe: Swiss regulators are investigating whether seven banks worked together to manipulate precious-metals trading prices. The banks under investigation by the Swiss regulator WEKO are UBS, Julius Baer Group, Deutsche Bank, HSBC, Barclays, Morgan Stanley and Mitsui. Similar probes have already been put underway by U.S. and European Union regulators. Wall Street Journal, Bloomberg, Financial Times. Wall Street Journal
Receiving Wide Coverage ... Concern About Redlining Settlement: Some observers expressed concern over the $33 million settlement Hudson City Savings Bank reached with federal regulators over alleged redlining. The Paramus, N.J., thrift's deal with the Department of Justice and Consumer Financial Protection Bureau sets a disturbing precedent, because more redlining settlements are probably on the horizon, said Guggenheim analyst Jaret Seiberg.
Wall Street Journal Here's another problem with America's skyrocketing student-loan debt. Bonds backed by student loans are become more risky, as investors fear new programs to lower monthly payments means they won't get paid in time, or at all. Withot the revenues generated by securitizing the debt, andbanks have less capital to make new loans.
Receiving Wide Coverage ... B of A Passes Vote Test: Brian Moynihan decisively won a shareholder vote to allow him to retain both the CEO and chairman titles at Bank of America. But shareholders who wanted to yank the chairman title from him told the Journal and FT that they still plan to hold his feet to the fire.
Wall Street Journal The shareholder vote on Tuesday whether to let Brian Moynihan retain both titles — chairman and chief executive — is about far more than just Moynihan. To get a sense of the sprawling back story, consider the first person depicted in a photo on the Journal story “5 Questions About Bank of America's Shareholder Vote.” You guessed it, Kenneth Lewis. B of A shareholders approved the binding resolution to keep the CEO and chairman roles
Receiving Wide Coverage ... B of A Board Reckoning: A special meeting of Bank of America shareholders Tuesday will determine whether chief executive Brian Moynihan is permitted to hang on to the additional title of chairman. The bank’s board made a unilateral decision to put Moynihan in the dual role last fall, disregarding a binding 2009 shareholder vote to keep the positions separate. Disgruntled investors saw the move as “a classic case of a too-big-to-fail bank
Receiving Wide Coverage ... Reactions to Fed: The Federal Reserve opted not to raise short-term interest rates at its two-day policy meeting, putting an end to weeks of speculation and setting off a rash of think pieces and retorts, naturally. The Wall Street Journal delves into banks disappointment, noting that Bank of America and U.S. Bancorp plan to look for ways to cut costs further to make up for the continued low-interest-rate environment. American Banker
Receiving Wide Coverage ... Fed Watch: The financial world is on tenterhooks over the outcome of today’s Federal Open Market Committee meeting. Some of Wall Street’s most prominent leaders are betting the Federal Reserve will opt to hold off raising short-term interest rates, according to the Wall Street Journal. “I wouldn’t do it,” Goldman Sachs chief executive Lloyd Blankfein tells the paper, citing subpar wage growth and inflation rates as factors likely to delay a rate
Receiving Wide Coverage ... United by the Blockchain: Nine of the world’s largest banks are joining forces to bring blockchain technology into the financial services fold. Banks including JPMorgan Chase, Goldman Sachs and Credit Suisse will back a start-up called R3CEV with the goal of establishing protocols and standards for blockchain use. The consortium will also work to develop “a platform that could handle the billions of dollars worth of transactions that occur in the financial
Not-So-Secret Chat: A new deal between New York's financial regulator and four big banks aims to preserve government access to the financial institutions' electronic communications. The deal comes ahead of the launch of Wall Street's long-awaited chat and messaging service Symphony, scheduled to roll out Tuesday. Deutsche Bank, Credit Suisse, Goldman Sachs and Bank of New York Mellon will all keep copies of their communications via Symphony for seven years and stash duplicates of decryption
Swaps Settlement Ahead: Twelve big banks plan to pay $1.9 billion to settle charges that they conspired to control the credit default swaps market during the run-up to the financial crisis, according to the papers. The New York Times maintains an air of mystery about the details of the pending settlement, opting not to name the banks involved. But the Los Angeles Times names names including Bank of America, JPMorgan Chase and Citigroup and the Financial
Receiving Wide Coverage ... Keep On Truckin': General Electric will earn a pretty penny from the sale of its U.S. transportation finance business. Bank of Montreal's purchase price for the Irving, Texas-based GE unit will be based on the net earning assets balance at the deal's closing, plus a premium, according to Canada's Financial Post. All told, the price will be about $13 billion. Those terms were disclosed during a Thursday afternoon conference call with analysts.
Receiving Wide Coverage ... Links in the Chain: Citigroup's Citi Ventures, Capital One Financial, Visa and Fiserv are among the financial-services companies that have invested in the Bitcoin startup Chain Inc. Former American Express CEO Jim Robinson is also an investor. The Wall Street Journal said the financial-services industry doesn't want to use Bitcoin as currency. Rather, they view the blockchain technology as a possible way to replace the inefficient methods they now use to verify
Receiving Wide Coverage Support for Moynihan: Warren Buffett is standing up for Brian Moynihan. Bank of America's chairman and chief executive is facing a shareholder vote later this month that could strip him of his chairmanship. Some shareholders are angry that B of A's board reversed a corporate bylaw (which shareholders had approved), to give Moynihan the additional title. Not Buffett. In a CNBC interview on Tuesday, Buffett said the disagreement with shareholders is “no big
Wall Street Journal Bank of America is fighting back against the effort to strip CEO Brian Moynihan of his chairman title. The struggle between Moynihan and shareholder groups to keep the two roles separate isn't new; JPMorgan Chase's Jamie Dimon mounted a successful defense in 2013. What makes Moynihan's situation different is how B of A handled it. Activist investors, proxy advisory firms and institutional investors like the California Public Employees' Retirement System want to yank the
Editor's note: Morning Scan will not publish on Monday, Sept. 7 in observance of the Labor Day holiday. We'll be back on Tuesday, Sept. 8. Receiving Wide Coverage ... A Very Important Jobs Report: Bankers are among the many holding their breath for Friday's job report, which is expected to play a big role in the Federal Reserve's decision about whether to begin raising interest rates in September. The latest numbers indicate the economy added 173,000 jobs
Receiving Wide Coverage ... Moynihan Under the Microscope: The drumbeat to force Bank of America chief executive Brian Moynihan to give up his additional role as chairman keeps getting louder. The Financial Times reports proxy adviser Glass Lewis is recommending shareholders vote against the board's decision to combine the chairman and CEO role. Major B of A investors including Norges Bank Investment Management and two public pension funds have also come out against the merged roles.
Wall Street Journal Recent stock market swings provided a chance to see the Volcker rule in action. The paper reports big banks made only a small portion of trades for themselves amidst the market volatility of the last two weeks, instead focusing on making bets on behalf of their clients. This is in keeping with the design of the Volcker rule, which aims to preserve the safety and soundness of the financial system by restricting banks'
Receiving Wide Coverage ... Back in Action: Bank of New York Mellon staffers could probably use a nap right about now. The Wall Street Journal reports employees worked through the night to update pricing on mutual and exchange-traded funds, putting an end to the problems that began with a software glitch at the bank's vendor SunGard a week ago. The fund valuations at 46 companies were thrown off by a software update gone awry, according to
Receiving Wide Coverage ... Interest Rate Outlook: The Wall Street Journal suggests the Fed is likely to stick to the plan to raise rates before the end of the year, based on discussions at the Federal Reserve Bank of Kansas City's annual policy retreat in Jackson Hole, Wyo. Market volatility and economic troubles in China aside, the paper says, a majority of Fed officials think the U.S. is largely on track for a quarter-percentage point increase.
Receiving Wide Coverage ... Mixed Signals: The backlash to the backlash has begun. After the China-infused market meltdown, hopes were dashed for a September rate hike, with voices ranging from Larry Summers to William Dudley calling the timing into question. Now we hear voices calling out, according to reports in the Wall Street Journal, New York Times and CNBC, to quit dragging your feet and get on with it.
Wall Street Journal The Federal Reserve wants big banks to monitor payments in real-time and they want it done now. JPMorgan Chase will meet with Fed officials this week to discuss the bank's response to the Fed's demands; CEO Jamie Dimon has said JPMorgan has assigned 400 people to the project, known in banker parlance as "intraday liquidity." Bank of New York Mellon is also at the top of the Fed's to-do list.
Wall Street Journal The paper has a story on Fannie Mae's revamped HomeReady program, designed to give help to low-income families in qualifying for low downpayment mortgages. Details of the program were outlined in American Banker on Tuesday. Wells Fargo expects to implement the program, said executive Brad Blackwell. Wells believes the program will help minority groups, although it may take some time to start working.
Receiving Wide Coverage ... Dodd-Frank's Good and Bad Sides: Monday's stock market meltdown offered up a case study in how Dodd-Frank has helped banks and how it's hurt banks. The market madness also cast serious doubt on the Fed's plans to raise interest rates next month. On the positive side for Dodd-Frank, banks have been forced to build up their defenses because of the law and they should be much better equipped to weather the storm of
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