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
Receiving Wide Coverage ... Global Market Crisis: The massive stock market sell-off that began on Friday (the Dow Jones Industrial Average's worst Friday in more than five years) continued Monday morning, with global markets tanking on a wide range of concerns. Time will tell whether comments made by traders are overblown, but a money manager in Germany told Bloomberg, "Everyone seems to be selling off, and there's panic. There's no rational choice anymore, no rational reaction."
Wall Street Journal JPMorgan Chase has hired a recently retired general as senior adviser. Gen. Raymond T. Odierno will offer the bank advice on cybersecurity as well as the physical risks involved in operating in a range of countries. The paper reports that Ordierno served in the Persian Gulf and Iraq wars and worked closely with Gen. David Petraeus on the 2007 military surge in Iraq.
Receiving Wide Coverage ... Fed Hesitates Over Rate Hike: Minutes from the latest Federal Reserve meeting suggest officials are torn over when to go ahead with a rate increase. Some are worried about the slow pace of inflation, which remains well below the central bank's 2% target. China's stock-market declines and the effects of a strong U.S. dollar are also of concern. On the other hand, a substantial number of Fed officials think a rate hike
Receiving Wide Coverage ... Let's Make a Deal: Promontory Financial Group won't be locking horns with New York's financial watchdog in court after all. Promontory on Tuesday agreed to a $15 million settlement with the New York Department of Financial Services and a six-month ban from taking on some new consulting engagements in New York state. The deal resolves allegations that Promontory whitewashed a report on Standard Chartered's sanctions violations and puts a concrete end to
A New Head in the Fed: The new president of the Dallas Federal Reserve is something of a mystery man. Robert Steven Kaplan's background as a former Goldman Sachs executive and management professor at Harvard Business School is well known; what's less clear are his views on monetary policy. This enigma is exciting a lot of interest among observers, since Kaplan will be highly influential as a member of the Fed's policy-setting committee when his
Receiving Wide Coverage ... India to Reform State Banks: India is betting that a private-sector mindset can help restore its public banks. The country has hired former top executives from Microsoft and Citigroup to take charge of the state banks' recapitalization efforts and reforms. Writing for Quartz, professor T.T. Ram Mohan sounds a bit skeptical about the plan: "It's hard to see why the best professionals in the private sector would want the job," he writes,
Receiving Wide Coverage ... Goldman Goes Retail: Goldman Sachs is getting a bundle of deposits from General Electric's GE Capital castoff. Goldman will acquire $8 billion of online deposit accounts and $8 billion of brokered certificates of deposit. The GE bank that Goldman is buying does not require a minimum balance for online savings accounts; and it boasts 140,000 retail customers.
Wall Street Journal Citigroup has made such good progress with Citi Holdings, its "bad bank," that the unit has reported four straight quarters of profit. That was nearly unthinkable for the unit when it was first created, as a way to separate Citi's unwanted and toxic assets from the good part of Citigroup. "We're out of the dark tunnel," says Francesco Vanni d'Archirafi, who runs the unit for Citi.
Receiving Wide Coverage ... The Incredible Shrinking GE: General Electric is shedding financing units at a rapid pace. In its latest move, the company has sold its health-care lending business to Capital One for roughly $9 billion. GE's goal is to unload $100 billion of GE Capital assets by the end of 2015 as it seeks to concentrate on its industrial business, and it's on track to do so with about $78 billion sold thus far.
Receiving Wide Coverage ... The Old College Try: Hillary Clinton unveiled her plan to deal with the problem of skyrocketing student debt. Clinton's plan would provide about $175 billion in grants and loans to states that guarantee students wouldn't have to take out loans to cover tuition. Although her plan's goal is to help families pay for college without taking out loans, it would require families to make a "realistic" contribution to tuition and students would also
Wall Street Journal Activist investors have been getting a little help from their new friends at mutual funds. There was once a time when mutual funds wouldn't even pick up the phone when activists called; they worried that even associating with activists would jeopardize their access to management at their portfolio companies.
Receiving Wide Coverage ... O Canada: Canadian banks have a money-laundering problem, the Wall Street Journal reports. The country's regulator found 72 failures of anti-money laundering controls among banks between 2009 and 2014, according to the paper's review of a "heavily redacted" document that did not include the names of the banks or specifics about the issues. The paper notes Canada "has been facing growing pressure to step up efforts to fight money laundering." In other
Receiving Wide Coverage ... The Pay Gap Debate: The Securities and Exchange Commission approved a rule Wednesday that will require publicly traded companies to disclose the pay ratio between chief executives and average workers. While the Dodd-Frank requirement was primarily aimed at helping shareholders compare the pay gap between companies, most of the papers predict the disclosures will matter more to employees and the public than to investors.
Receiving Wide Coverage ... AmEx Deal Upset: Sometimes even "burn after reading" instructions aren't enough to cover up improper behavior. A federal judge threw out the proposed $79 million antitrust settlement between American Express and merchants Tuesday, finding that negotiations were "fatally tainted" when lawyers from opposing sides shared confidential documents. That's a big win for merchants hoping to reach an alternative deal that will give them more leeway in passing the cost of interchange fees
Receiving Wide Coverage ... Bad Day for Promontory: Get ready for a battle of the titans: New York's banking regulator versus financial consulting heavyweight Promontory Financial Group. New York's Department of Financial Services on Monday suspended Promontory from consulting with banks licensed in the state, accusing the firm of covering up the extent of Standard Chartered's sanctions violations in a 2011 report.
Receiving Wide Coverage ... 'World's Local Bank' No More: HSBC has agreed to sell its Brazilian unit to Banco Bradesco for $5.2 billion as the bank seeks to scale down and concentrate on its Asian operations. The bank pledged in June to cut 50,000 jobs and retreat from low-performing business lines, with the goal of reducing annual costs by up to $5 billion by the end of 2017. The papers note the bank's retrenchment is a
Wall Street Journal The U.S. may be second fiddle to Europe in the Ryder Cup golf competition, but that's not the case when it comes to investment banking. As Europe's large banks with big investment bank operations talk about doom and gloom, and as their shares plummet, their U.S. counterparts are moving in the opposite direction.
Hillary Clinton's connections to UBS, which has made donations to the family's charitable foundation, comes under the spotlight in a lengthy article. While secretary of state, Clinton worked out a deal between UBS and the Internal Revenue Service; the IRS was trying to obtain information on Americans suspected of trying to dodge taxes through secret Swiss bank accounts. Following Clinton's involvement in the matter, which was seen to have greatly helped UBS, the
Wall Street Journal The rate of home-price appreciation has slowed, according to the S&P/Case-Shiller Home Price Index for May, which economists say is a good sign more potential buyers will soon be able to afford to buy. After home prices increased at low double-digit percentage rates per month in 2013, price gains per month this year have hovered just above 4%. A recent report from the National Association of Realtors was somewhat misleading. NAR said median
Morning Scan: Merchants Seek Dismissal of $6B Credit Card Settlement; Faulty Credit Reports Targeted
Wall Street Journal If you can't trust your lawyer, who can you trust? Visa, MasterCard and millions of merchants may see the $6 billion settlement of a class-action lawsuit go up in smoke. The reason is what a legal ethics expert described as "gross misbehavior" by the lawyers involved. The settlement resolved a lawsuit alleging the credit-card networks engaged in price-fixing when they banned merchants from charging customers more when they used a credit card instead
Wall Street Journal Bank of America is one of more than a dozen companies expected to sign an agreement Monday at the White House to address climate change. B of A and others will invest more than $140 billion to reduce carbon emissions. B of A specifically will commit $75 billion through lending and other financing by 2025; it's on top of a previous commitment of $50 billion by B of A. None of the companies
Wall Street Journal Federal prosecutors and New York's top banking cop have contacted at least 10 banks for questioning on whether they should have alerted authorities about suspicious money transfers involving FIFA, soccer's world governing body. The U.S. Attorney's office in Brooklyn and has contacted Delta National Bank & Trust in New York, HSBC and Standard Chartered, unnamed sources said. At least three other "major" international banks have also been contacted by the U.S. Attorney but
Receiving Wide Coverage ... B of A Deck Shuffling: Brian Moynihan is playing musical chairs again. Bank of America's chief executive made a number of personnel moves late Wednesday, including the dismissal, or resignation, of Chief Financial Officer Bruce Thompson; details of all the moves are outlined in American Banker. The Wall Street Journal and the New York Times both speculate the executive shuffling was a response to regulators chastising the firm's leadership for mistakes on
Wall Street Journal The Federal Reserve Board will soon be at full-strength for the first time since August 2013, thanks to the nomination of University of Michigan economics professor Kathryn Dominguez. Not so fast my friend, said Sen. Richard Shelby, chairman of the Senate Banking Committee. Shelby said he's in no hurry to schedule confirmation hearings for Dominguez and for the other nominee, ex-Bank of Hawaii CEO Allan Landon. "We're not going to rush to judgment
Receiving Wide Coverage ... Banks' Capital Restraints: Get smaller, or else. That's the message from the Fed to big banks after the finalization of rules on Monday. The Fed approved a graduated surcharge for globally risky banks and it established capital requirements for GE Capital. Fed Chair Janet Yellen said the capital surcharge rule is designed to reduce the potential for large institutions to fail, or force them to reduce their risk profile. In effect, it
Receiving Wide Coverage ... Dodd-Frank, Five Years Later: On the five-year anniversary of Dodd-Frank, Barney Frank and Christopher Dodd sat down for a Q&A session. Dodd said he thinks Too Big to Fail is dead, in part because regulators are forced to "sit down together" at least four times a year to study the landscape. (In an interview with the Financial Times, Frank is adamant TBTF is dead and he disagrees with Sen. Elizabeth Warren's plan
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