BANKTHINK

morning scan

Morning Scan: New Mortgage Rules Approved; JPMorgan's China Hiring

Receiving Wide Coverage ... New Mortgage Rules: Two Republicans on the Securities and Exchange Commission objected to relaxed mortgage rules, but the SEC approved the new rules regardless on Wednesday, as did the Federal Reserve and the Department of Housing and Urban Development. "Today's rule-making takes the untenable housing policy that injected irrational exuberance into mortgage lending and, as a result, caused a catastrophic financial crisis and chisels that failed policy into the stone tablets of…

Morning Scan: Mortgage Lending Debate; London Whale Blame Game

Receiving Wide Coverage ... New QRM Rule Assessed: The reviews are coming in on the final QRM rule and reaction is mixed. The American Bankers Association indicated it could live with the new rule, which doesn't require a down payment in its criteria for being exempted from risk retention, saying it "might have been more restrictive." Former FDIC Chairman Sheila Bair, however, described the final version of the risk retention rule as "unfortunate" because "if the…

Morning Scan: Bankers Warned at New York Fed; Watt's Mortgage Plan

Receiving Wide Coverage ... Bankers Warned: Big banks, be warned (again). In closed-door meetings Monday, Federal Reserve Gov. Daniel Tarullo and New York Fed President William Dudley said big banks must clean up their acts, or face repercussions. Those consequences could include things like "performance bonds," limits on executive compensation and a central registry to track the hiring and firing of traders and other top finance officials, all of which were reported by the Wall Street…

Morning Scan: The End of QE Approaches; Apple Pay Debuts

Receiving Wide Coverage ... To QE, or Not to QE: Wild stock market swings, unexpected volatility in the 10-year Treasury note, and emerging global crises ranging from the Ebola virus to unrest in the Middle East won't sway the Fed from its plan to end its bond-buying program. Ahead of the Fed's Oct. 28-29 meeting, the Wall Street Journal, Financial Times and New York Times all take a look at whether the Fed intends to stick…

Morning Scan: Trading Makes a Comeback; Protecting Personal Data

Receiving Wide Coverage... Credit Suisse Shake-Up: Credit Suisse has switched around top management in its investment banking and Asia-Pacific divisions. The investment bank now has three leaders: Gaël de Boissard and new additions Jim Amine and Tim O'Hara. The triple-threat lineup suggests that Credit Suisse isn't looking to slim down its investment banking division anytime soon, according to the Financial Times. Credit Suisse also appointed Helman Sitohang, the head of its Asia-Pacific investment bank, as chief…

Morning Scan: Stock Swings Hit Banks Hard; "No Objective Reality" on Earnings

Receiving Wide Coverage.... Banks Take Beating in Stock Market: Wednesday's stock market swings hit banks hard as fears of a sputtering global economy took hold. "U.S. bank stocks suffered their worst one-day fall in almost two years," tumbling 3.4%, according to the Financial Times. Bank shareholders are worried that the sluggish global recovery and potential for deflation in the U.S. and Europe could keep interest rates low even longer than expected, the papers report. "People are…

Morning Scan: Citi Consumer Chief Plans to Leave As New Banamex Scandal Breaks

Receiving Wide Coverage ... Big Changes at Citi: Citigroup probably won't want to include this week in its highlights reel. Its Mexican unit, Banamex, is embroiled in another scandal; not unrelatedly, reports are circulating that Manuel Medina-Mora, the bank's head of consumer banking and chairman of Banamex, is planning to step down; and in a separate decision, the so-called "everywhere bank" is shutting down businesses in 11 countries, including El Salvador, Japan and Egypt. The Times…

Morning Scan: JPM Earnings Leak; Regulation Guru Wins Nobel

Breaking News This Morning ... Earnings: JPM, Citigroup, Wells Fargo Receiving Wide Coverage ... Early Bird Gets the Earnings Attention: JPMorgan Chase showed a $5.57 billion profit in its third quarter, but whether that's a victory or a disappointment depends on your preferred news source. The Journal's upbeat report emphasizes the bank's return to profitability after "a year-earlier period weighed down by massive legal charges." The Financial Times, on the other hand, leads by noting JPMorgan's net income…

Morning Scan: Bernanke's Testimony and Pseudonym; Here Come the AG's

Editor's note: Morning Scan will not publish on Monday, Oct. 13 in observance of the Columbus Day holiday. We'll be back on Tuesday, Oct. 14. Receiving Wide Coverage.... Bernanke, Annoyed: Unsuccessful home-refinance applicant Ben Bernanke was the final star witness on Thursday in the shareholder lawsuit challenging the federal government's bailout of American International Group. Most of his answers were terse, according to several media reports, and he was often "visibly annoyed," the Journal reported. At one…

Morning Scan: Cyberattacks Spread; Geithner and 'Loan Sharky'

Receiving Wide Coverage ... Cyberattack Targets: JPMorgan Chase was one of at least a baker's dozen of financial firms targeted by a recent cyberattack, the Journal reports, citing unnamed sources. Others in the hackers' crosshairs may have included mutual fund giant Fidelity Investments, onine brokerage E*Trade Financial, payroll giant Automatic Data Processing and banks Citigroup, Regions Financial and HSBC. However, investigators don't know yet if the attacks on some of these other firms are related to…

Morning Scan: Geithner Takes the Stand in AIG Case; The Odd Rules for Puerto Rico Notes

Receiving Wide Coverage ... Geithner's Turn: Most papers weighed in with coverage of Timothy Geithner's testimony on Tuesday, from Maurice "Hank" Greenberg's lawsuit challenging the federal bailout of AIG. Geithner spent six hours in a federal court witness box, so there was plenty of material to choose from. In one exchange, Greenberg's lawyer, David Boies, asked Geithner why he hung up before the end of a conference call on Sept. 16, 2008, during the Fed board…

Morning Scan: Other Banks Targeted by JPMorgan Hackers; Holder's Last Hurrah?

Receiving Wide Coverage ... Hacked Off: More details about the JPMorgan Chase cyberattack were leaked, although it's somewhat alarming how many unanswered questions remain. Anonymice told the Journal hackers tried to breach the data systems of other banks or financial institutions but were unsuccessful. It's unclear what, exactly, the hackers were trying to do. Bill Nelson of the Financial Services Information Sharing and Analysis Center, said, "It is like the equivalent of a robber walking around…

Morning Scan: 'Hours' of Questioning on AIG Bailout; New Bond Market

Wall Street Journal If Ben Bernanke was miffed at his home refinance application being denied, he should be in a really bad mood after what's coming next. Bernanke, former Treasury Secretary Henry Paulson and former New York Fed President Tim Geithner "each will field hours of questions" in the lawsuit filed by former AIG CEO Maurice "Hank" Greenberg challenging the terms of the 2008 bailout of AIG. Greenberg's lawsuit alleges the government cheated shareholders out of…

Morning Scan: JPMorgan Joins the Mega Breach Club; Bernanke's Refi Denied

Receiving Wide Coverage ... Hack Attack at JPMorgan: JPMorgan Chase is the newest member of the mega breach club. The bank disclosed in a Thursday regulatory filing that hackers stole the names, email addresses, phone numbers and mailing addresses of 76 million households and seven million small business customers this summer. JPMorgan is assuring customers that it has seen "no unusual fraud activity related to this incident" and says "there is no evidence" that hackers were…

Morning Scan: B of A CEO Moynihan Named Chair; Dark Days for GSE Shareholders

Receiving Wide Coverage ... Moynihan's Next Move: Bank of America chief executive Brian Moynihan received a vote of confidence from the bank's board of directors Wednesday as he was appointed to the additional role of chairman. The roles had been split at Bank of America since 2009, when then-head Ken Lewis was stripped of his chairman title. Chad Holliday, who Moynihan succeeds as chairman, will remain on the board. The Financial Times focuses the potential downside…

Morning Scan: eBay Loves PayPal, Sets It Free; Wall Street's Gender Gap

Receiving Wide Coverage ... If You Love PayPal, Set It Free: The split between eBay and PayPal appears to be the celebrity breakup of the business world, prompting excited speculation and in-depth analysis. eBay says the payments landscape has changed significantly in recent months and that the companies' parting of ways will "free PayPal to more easily reach agreements with companies that compete with eBay's online marketplace," thereby eliminating potential conflicts of interest, the Wall Street…

Morning Scan: eBay and PayPal to Split; Assessing Holder's Legacy

Breaking News This Morning ... eBay and PayPal to Split: The online marketplace said this morning it would spin off its payments unit, a move activist investor Carl Icahn had been pushing. Wall Street Journal, New York Times Receiving Wide Coverage ... AIG and the Meaning of 'Many': A lawsuit that accuses the U.S. government of unfairly penalizing AIG shareholders in the terms of its 2008 bailout of the insurer got underway Monday. David Boies, a lawyer for…

Morning Scan: AIG Bailout on Trial; Goldman's New Conflict of Interest Rules

Receiving Wide Coverage ... See You in Court: A lawsuit alleging that shareholders got a raw deal in the $184 billion government bailout of AIG goes to trial today, and pundits are abuzz with expectation — but not because they think the central claim holds particular merit. In two separate columns in the New York Times, Gretchen Morgenson and Noam Scheiber shed no tears for AIG shareholders, including the insurer's former chief executive Maurice "Hank" Greenberg.…

Morning Scan: Secret New York Fed Recordings Released; U.S. Bank Fined

Receiving Wide Coverage.... Secret Fed Tapes: Here's all you need to pique your interest: It's the "Ray Rice video for the financial sector," according to none other than Michael Lewis, columnist and author of "The Big Short." A former New York Fed bank examiner secretly took a key-chain voice recorder into 47 hours of Fed meetings, recorded what she heard and gave the recordings to a reporter at ProPublica, which later distributed the recordings to National…

Morning Scan: Home Depot Lawsuits Roll In; RBS IPO Rebounds

Receiving Wide Coverage... Here Come the Lawyers: What did you expect, Home Depot would get a free pass from lawyers on its massive data breach? The floodgates have opened as the first of what could be many lawsuits filed against Home Depot after 56 million credit and debit cards were compromised. In federal court in Atlanta, two credit unions — Southern Chautauqua Federal Credit Union in New York and First Choice Federal Credit Union in Pennsylvania…

Morning Scan: RBS Citizens IPO Sputters; Wal-Mart Checking Accounts

Receiving Wide Coverage ... You're No Alibaba: Royal Bank of Scotland cut the price on the IPO of its U.S. banking unit, Citizens Financial, amid tepid demand. The FT said investors are worried that RBS won't be able to deliver on its financial promises for Citizens. Even so, the Citizens IPO was much larger than other recent bank IPOs, including Talmer Bancorp, the Journal noted. Overall the market for bank IPOs has been lackluster this year,…

Morning Scan: Terrorism Finance Verdict Puts Banks on Notice; Wells Fargo Fined

Receiving Wide Coverage ... Guilty: A word of warning to banks (as if they didn't already know this): Be careful who you do business with. A federal jury in New York found Jordan's Arab Bank liable for providing financial services to Hamas that helped them conduct terrorist activities, and plantiffs now plan to seek an unspecific amount in damages. For its part, Arab Bank has said it followed compliance procedures, according to the Financial Times. But…

Morning Scan: Mortgage Lending Standards Questioned; Citi's Japanese Sale

Wall Street Journal Federal officials are considering how to instruct lenders to ease up on tight lending standards for mortgages. On the one hand, they don't want to create another housing bubble. But on the other hand, mortgage lending is so slow because lenders have adopted standards that are even tighter than what Fannie Mae and Freddie Mac demand. Underlying all of this are paltry-to-nonexistent wage growth, high levels of student debt and little savings for…

Morning Scan: Home Depot Breach Affects 56M; Santander's Punishment

Receiving Wide Coverage ... Reach of Home Depot Breach: Home Depot confirmed that its data breach affected about 56 million customers, making it larger than the Target breach during the last holiday season. The home-improvement retailer also said the "unique, custom-built malware" used in the breach has been eliminated from its networks. The malware used in the Home Depot breach wasn't present in attacks on other retailers. Home Depot did not disclose the attackers' point of…

Morning Scan: Fed Walks a Fine Line on Rates; DoJ Vows to Prosecute Bankers

Receiving Wide Coverage ... Fed Balancing Act: The Federal Reserve's policy-making Federal Open Market Committee announced Wednesday that the central bank will keep interest rates low in the near-term, though it could change course sooner than expected if data shows greater economic improvement. The Fed's statement, which was approved by an 8-2 vote, noted that unemployment levels remain subpar. "There are still too many people who want jobs but cannot find them, too many who are…

Morning Scan: CFTC Wins Overseas Swaps Suit; Credit Suisse in Trouble with Fed

Receiving Wide Coverage ... A Win for the CFTC: A federal judge has given the Commodity Futures Trading Commission a green light to regulate overseas swaps trading. Citing the CFTC's mandate under the Dodd-Frank Act, the judge "dismissed arguments by three Wall Street trade groups that the CFTC overstepped its authority in issuing new rules and guidance related to overseas swaps transactions," the Wall Street Journal reports. The New York Times suggests the ruling signals a…

Morning Scan: Banks Vie for No. 1 Slot in Apple Pay; Citi Nears IPO for One Main

Receiving Wide Coverage ... Apple Pay's Ripple Effects: Big banks are vying to have their cards at the top of iPhone users' mobile wallets when Apple Pay debuts next month. Apple has yet to release details of how its mobile payments system will work, but the Financial Times reports that everyone is betting consumers will be able to select a particular card as the default payment option. That's a scary prospect for lenders like the San…

Morning Scan: Novo Banco Turnover; U.S. Flips Bankers for Rate-Rigging Probe

Receiving Wide Coverage ... More Tumult at Portuguese Bank: The "good bank" created after the government rescue of Portuguese lender Banco Espírito Santo has a new leader after its top management team resigned Saturday. Portugal's central bank on Sunday appointed Lloyds Banking Group executive Eduardo Stock da Cunha to head Novo Banco. Stock da Cunha "will have the difficult task of retaining customers at the bank … while it prepares itself for a sale, which Bank…

Morning Scan: Banks Partner with Apple, but Retailers Resist; Dimon's Recovery

Receiving Wide Coverage ... Apple Pay Dissected: Apple Pay "respect[s] our role in the ecosystem" of payments, said James Anderson, senior vice president of product development at MasterCard. And therein lies one explanation of why banks were apparently so eager to partner with Apple on its new payments network, despite the fact they're expected to take a hit to some revenue streams (Apple must have a lot of clout, if this statement from the Times is…

Morning Scan: Reactions to Apple Pay; Santander's Succession Plan

Receiving Wide Coverage ... Paying with Apple: Banks have bought into what Apple's selling with its near-field communications-based Apple Pay system, as they like its security features, intuitive user experience and the Apple brand name, and also they harbor the hope that Apple Pay will drive additional credit card usage, as American Banker reported. Retailers, not so much. Yes, starting in October, you'll be able to wave your iPhone 6 in front of an NFC reader…

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