Breaking News This Morning ... CIT Buying OneWest for $3.4 Billion: "CIT Group Inc., the business lender led by Wall Street veteran John Thain, said Tuesday it had reached a deal to buy the parent company of OneWest Bank NA for $3.4 billion, a move Mr. Thain called 'transformational.' " Wall Street Journal, New York Times Receiving Wide Coverage ...
Wall Street Journal New York Attorney General Eric Schneiderman isn't alone in his concerns about Barclays' dark pool activities. Trading firms including RBC Capital Markets and T. Rowe Price Group worried in the months before Schneiderman sued Barclays that their orders were getting subpar treatment on the dark pool because of high-frequency traders. What's more, "a number of Barclays employees privately expressed concerns to top stock-trading executives that the firm was giving high-frequency traders too much
Receiving Wide Coverage ... Return to Stability: Gains in wealth management and investment banking helped Morgan Stanley nearly double its profit in the second quarter. The papers played up how the bank has focused on stable businesses while relying less on fixed income. The Wall Street Journal said Morgan Stanley has largely shrugged off" bond trading declines that have hurt other firms. The New York Times said the bank has proved skeptics wrong that it could
Receiving Wide Coverage ... Deal or No Deal: Bank of America and the Justice Department are at odds over how much the Charlotte, N.C., bank should pay to settle charges that it sold shoddy mortgage-backed securities in the run-up to the financial crisis. According to the Wall Street Journal, DOJ lawyers rebuffed B of A's offer to pay $13 billion in cash and consumer relief in a Tuesday meeting. The Financial Times' sources say Bank of
Breaking News This Morning ... Earnings: Bank of America, PNC, US Bancorp Receiving Wide Coverage ... Yellen Ties Labor Market, Rate Hikes: Federal Reserve Board Chair Janet Yellen told the Senate Banking Committee the improving employment picture could lead to interest rate hikes. The Washington Post led with her views on the labor market, although it also mentioned the Fed's plans to continue to cut back on its bond purchases and how that affects interest rates and the
Breaking News This Morning ... Earnings: JPMorgan Chase, Comerica, Commerce Bancshares Receiving Wide Coverage ... Citigroup Settlement, Day 2: Citigroup has agreed to pay $7 billion to settle Justice Department charges it sold mortgage-backed securities stuffed with subprime mortgages to unsuspecting investors in the years leading up to the 2008 financial crisis. About $4 billion of the penalty will go into the U.S. Treasury's general fund. The rest will be divided among other federal agencies, with about $2.5
Breaking News This Morning ... Earnings: Citigroup Receiving Wide Coverage ... Settled: It's official. Citigroup and the Department of Justice reached a $7 billion mortgage-backed securities-related settlement. Here's the breakdown: a $4 billion cash penalty paid to Justice, $2.5 billion in mortgage relief for borrowers, and $500 million to state attorneys general and the Federal Deposit Insurance Corporation, the New York Times reports. The $4 billion payment is the largest to date. Citigroup said it would take a
Breaking News This Morning ... Earnings: Wells Fargo Receiving Wide Coverage ... Alibaba IPO Looms: Chinese e-commerce firm Alibaba plans to hold its initial public offering within the next few weeks, according to the Wall Street Journal. Alibaba's hotly anticipated IPO could raise more than $20 billion. The Financial Times takes a more dramatic approach to the news: Alibaba's "self-imposed deadline is in danger of slipping as the company gets close to the moment when it will have
Receiving Wide Coverage ... The End of Bond Buying: The Federal Reserve will likely end its bond-buying program in October, according to minutes from the central bank's June policy meeting. The Fed minutes say that the decision "should not be interpreted as evidence that rate increases were likely to begin sooner," according to the New York Times. The Times focuses on Fed officials' cautious economic outlook, reporting that many remain concerned about unemployment, sluggish economic output
Receiving Wide Coverage ... Citi, DOJ Said Close to $7B Deal: Citigroup and the Justice Department are reportedly nearing a deal in which the bank would pay roughly $7 billion to end a probe of the mortgage-backed securities it sold in the years preceding the financial crisis. The expected price tag appears to be a victory for the U.S. government. The DOJ, which was seeking up to a $10 billion settlement earlier this summer, had threatened
Receiving Wide Coverage ... U.S. Trains Sights on Commerzbank: U.S. regulators are accusing another European bank of violating U.S. economic sanctions after striking an $8.9 billion deal with French lender BNP Paribas over the same charge last week. Germany's Commerzbank is on the hot seat for allegedly doing business with companies in Iran and Sudan, according to the New York Times. Because Germany owns 17% of Commerzbank, the Times wonders whether "settlement talks could inflame diplomatic
Receiving Wide Coverage ... Debating the Export-Import Bank: Supporters of the Export-Import Bank are fighting back against the House Republicans who want to scrap it. Each member of Congress will receive in the coming weeks, "a personalized index card laying out exactly which companies in their districts benefit from the financing agency and how many people they employ" according to the Wall Street Journal. Companies including General Electric and Boeing, along with industry groups such as
Yellen Holds on Low Rates: The Federal Reserve should not raise interest rates in order to battle financial bubbles, according to a speech delivered by the central bank's chairwoman Janet Yellen Wednesday. Her remarks suggest that the Fed is "more interested in having a resilient financial system that can cope when asset bubbles burst than it is in popping them through rate rises," the Financial Times reports. While monetary policy is an efficient means of
Receiving Wide Coverage ... Dimon Diagnosed with Throat Cancer: The doctors caught it early, it's curable, and the JPMorgan CEO will undergo treatment over the next two months while continuing to work (though limiting his travel). "There isn't a specific individual who will take over Mr. Dimon's responsibilities as his schedule eases while he undergoes treatment," reports the Journal, citing a company spokesman. "The board has succession plans focusing on immediate, three-year and five-to-seven-year time frames."
Receiving Wide Coverage ... 'Tour de Fraud,' $8.9B Fine Drive BNP Share Price Up: Are multibillion dollar fines investor catnip? BNP Paribas's stock price opened 3.4% higher on Tuesday, following Monday's announcement that the bank settled with the U.S. government on an $8.9 billion fine for sanctions violations. The markets may have been soothed by the bank's statement that despite the fine it would be able to pay a cash dividend this quarter. Overall, BNP's share
Receiving Wide Coverage ... Buoyant Markets Worry BIS: The financial markets are "euphoric" despite uncertain economic and geopolitical outlooks and that worries the Bank for International Settlements, according to its annual report Sunday. The BIS finds the "buoyancy" in the markets "puzzling," according to the Wall Street Journal. And we all know what that means. Any time there are headlines or stories about things like "irrational exuberance" in the markets, it means financial officials are worried
Receiving Wide Coverage ... Barclays' Dark Pool Dries Up: New York Attorney General Eric Schneiderman's civil lawsuit against Barclays is proving bad for the British lender's business. Big banks including Credit Suisse, Deutsche Bank and Royal Bank of Canada ditched the lender's dark pool on Thursday in the wake of allegations that Barclays mislead investors about its dealings with high-frequency traders. Meanwhile, Barclay's dark pool trading venue "was overloaded by a high volume of inquiries from
Receiving Wide Coverage ... Translating Tarullo: The Federal Reserve plans to step up year-round oversight of big banks to ensure they are able to pass stress tests, Fed Governor Daniel Tarullo said in a Wednesday speech. The thrust of Tarullo's remarks suggest a push "to centralize the oversight of Wall Street in Washington," according to the Wall Street Journal. The paper focuses on how the stress-test failures of both Zions Bancorp and Citigroup may have been
Receiving Wide Coverage ... Serious Ex-Im Waves: Geez, when's the last time the Export-Import Bank of the United States was in all the morning headlines? The charter of the government provider of loan guarantees and other support to promote trade expires this fall, and some Republican lawmakers including some on the rise, like House Majority Leader-to-be Kevin McCarthy are threatening to not renew it because they see it as corporate welfare. The Wall Street
Receiving Wide Coverage ... New Obstacle for Securities-Fraud Suits: A Supreme Court ruling on Monday added a hurdle to investors' efforts to win class-action lawsuits over claims of securities fraud. Companies defending themselves against such lawsuits can now attempt to get them thrown out of court by proving at an early legal stage that misleading statements did not have an impact on stock prices. But the decision in the case of Halliburton v. Erica P. John
Receiving Wide Coverage ... Disruption and Disintermediation: In her widely discussed takedown of Clayton Christensen's theory of disruptive innovation, The New Yorker's Jill Lepore trots out TD Bank as an example of a company that succeeded by eschewing innovations. We won't second-guess Lepore's overall critique of Christensen (plenty of others have, including Christensen himself) but we're calling baloney on the bank example. Sure, CEO Ed Clark avoided convoluted financial "innovations" like asset-backed commercial paper, a decision
Receiving Wide Coverage ... Forecasting the Fed: The Federal Reserve plans to wrap up its bond-buying program this year, but it may continue reinvesting the proceeds from maturing securities to hang onto its portfolio of Treasuries and mortgage bonds, according to Binyamin Applebaum at the New York Times. Applebaum's analysis is generally supportive of the idea, noting that maintaining reinvestments "could also help keep borrowing costs low" and could also reassure a jittery market looking for
Receiving Wide Coverage ... The FOMC and Rates: The Fed offered new insight into its thinking on interest rates at the conclusion of the central bank's two-day Federal Open Market Committee meeting, the Wall Street Journal reported. The upshot: the Fed appears to be more aggressive in its outlook for raising rates in the next two years, but less aggressive in raising rates beyond 2016. Officials estimated the benchmark federal funds rate will hit 1.2% by
Receiving Wide Coverage ... Central Bank Tea Leaves: A few stray comments by Bank of England policymakers have shifted rate expectations for the U.K. and caused a swing in currency markets. The minutes of the central bank's latest policy meeting, released Wednesday, showed members of the policy committee voicing "surprise" that investors don't think a rise in interest rates is likely before next year. Investors, apparently surprised at the central bank's surprise at their expectations, proceeded
Receiving Wide Coverage ... Allergan Case Reveals Morgan Stanley M&A Switch-Up: As drug company Allergan defends itself against a $53 billion hostile takeover bid from Valeant Pharmaceuticals, it is shedding light on Morgan Stanley's mergers and acquisitions practices. Allergan, the Irvine, Calif. Maker of Botox, has published excerpts from emails written by senior Morgan Stanley investment bankers that it says show Valeant's business model is unsustainable, the New York Times reports. Morgan Stanley is now advising
Receiving Wide Coverage ... Welcome to FOMC Week: The Federal Open Market Committee meets Tuesday and Wednesday, and the Fourth Estate's Fed watchers filed several previews for Monday's papers. While there's no expectation that Janet Yellen's Fed will raise interest rates right away, especially not before the central bank's tapering of asset purchases is complete, there is increased speculation about when the first rate increase will come. That's in large part because the U.S. labor market
Wall Street Journal Lenders are making it rain for companies with junk ratings, according to the Journal. "Lending to weaker companies on easy terms is becoming more and more common as investors' appetite for higher-yielding debt grows stronger and the Federal Reserve keeps money flowing at ultralow rates," the paper reports. Banks are also forgoing loan requirements, such as periodic debt testing, which are meant to keep companies' financial health in check. What could go wrong?
Receiving Wide Coverage ... Au Revoir BNP COO: The chief operating officer of BNP Paribas, Georges Chodron de Courcel, is stepping down as the French lender negotiates with U.S. authorities over a settlement for allegedly violating sanctions. BNP made no mention of the investigation in announcing the departure of the 64-year-old Courcel. But New York Department of Financial Services head Benjamin Lawsky had called for his departure as part of the settlement along with that of
Receiving Wide Coverage ... BofA Settlement Deadlock: Negotiations between Bank of America and the Justice Department have stalled as the parties attempt to settle a lawsuit over mortgage-backed securities sold by Merrill Lynch, which B of A acquired during the financial crisis, according to the New York Times. The usual anonymice told the paper the Justice Department wants the Charlotte, N.C.-based bank to pay roughly $17 billion to resolve the lawsuit over securities that later soured.
Receiving Wide Coverage ... Metal Fraud Concerns Grow: As banks investigate the possibility that a Chinese metal producer used the same materials as collateral for metal-backed loans, China's state-owned company Citic Resources Holdings attempted to secure its warehouse stocks of aluminum and copper. A half-dozen banks are looking into the suspected fraud, including Citigroup and Standard Chartered. Some of the lenders have decided to refrain from commodity financing deals in China "until they get clarity on
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