BANKTHINK

morning scan

Morning Scan: Citi Adds $600M for Legal Costs; BofA Faces Shareholder Wrath

Receiving Wide Coverage ... Coming Down the Pike: Citigroup's move to increase its third-quarter legal provisions by an additional $600 million suggests the bank may soon reach a settlement over charges that it manipulated foreign-exchange rates, the papers report. The adjustment, made in response to "very recent communications with certain regulatory agencies" according to the bank's regulatory filing, lowered Citigroup's quarterly earnings by nearly 18%, to $2.84 billion. The Wall Street Journal's anonymice say Citi and…

Morning Scan: What the End of QE Means for Banks; CurrentC Hacked

Receiving Wide Coverage ... Que Sera, QE: The Federal Reserve's bond-purchasing program is officially over, but that's no reason to stop the fun of debating the legacy of quantitative easing. The major papers all give the program mixed reviews. "While it clearly didn't cause the inflation outbreak some predicted, it also didn't clearly lead to a surge of economic output or hiring," the Wall Street Journal reports. The New York Times says QE definitely helped the…

Morning Scan: Deutsche Names New CFO; Report Links Russian Government to Hacks

Receiving Wide Coverage ... New CFO in the Haus: Deutsche Bank has tapped Goldman Sachs partner Marcus Schenck as its future chief financial officer, with plans for current CFO Stefan Krause to take on a newly created position at the company. The change comes as investors pressure the German lender to improve its financial strength, according to the Wall Street Journal. The papers all note Krause has made slow progress in strengthening the bank's regulatory reporting;…

Morning Scan: SEC Stalemate on BofA Waivers; Should the Fed Tackle Inequality?

Receiving Wide Coverage ... Making the Grade: If European regulators were being graded on their newly released banking stress tests, what kind of marks would they receive? The European Central Bank would probably have a few points shaved off for the errors and inconsistencies reported by the Wall Street Journal: it misstated the capital ratio of a "large Italian bank" and failed to report on a review of Polish banks' balance sheets because the data was…

Morning Scan: Banks Beef Up Cybersecurity; Can We Trust Europe's Stress Tests?

Receiving Wide Coverage ... The Results Are In: Most of the eurozone's big banks have enough capital to survive an economic upset, according to the results of regulators' long-awaited stress tests. Of the 130 banks under review, 13 were identified as needing to shore up $12 billion in additional capital. Italy had the largest share of financial flunkies, with Greece and Cyprus next in line. The Wall Street Journal applauds the European Central Bank for including…

Morning Scan: Stress Tests to Get Tough on Leveraged Loans; QRM Rule Bashed

Receiving Wide Coverage ... Prepping for Stress Tests: The Financial Times and Wall Street Journal each serves up a curtain raiser on next year's Fed-conducted stress tests, playing off the instructions the Fed released on Thursday, as well as the European Central Bank's stress test results that are due to be released on Sunday. Among the stressful scenarios to which U.S. banks will be theoretically tested are oil prices rising to $110 per barrel, and increased…

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…

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