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morning scan

Morning Scan: Tributes to Game Theory Pioneer John Nash; Bank Stocks to Rise?

Receiving Wide Coverage ... A Beautiful Mind: Tributes to John Nash were plentiful after the mathematician made famous by his depiction in the film "A Beautiful Mind" was killed in an taxi accident this weekend. Nash's doctoral thesis placed game theory, the study of strategic interactions, at the heart of economics, the Financial Times said. After Nash's insights, "economists stopped thinking exclusively about unrealistic models of perfectly competitive markets and began focusing on cases in which…

Morning Scan: Criminal Pleas No Longer Scary; Will Shelby Bill Beat the Odds?

Editor's note: Morning Scan will not publish on Monday, May 25 in observance of the Memorial Day holiday. We'll be back on Tuesday, May 26. Receiving Wide Coverage ... What's Next for the Shelby Bill: The Senate Banking Committee approved Sen. Richard Shelby's proposed regulatory reform bill Thursday, but Senate Republicans will need to reach across the aisle to get the legislation to pass. Their chances of gaining bipartisan support for the bill vary widely in news…

Morning Scan: Lawsky's Next Act; Will Forex Fines Deter Bad Behavior?

Receiving Wide Coverage ... Forex Fines: The unethical attitudes that gave rise to the forex scandal might be summed up by this revealing 2010 chat message from a Barclays trader: "If you aint cheating, you aint trying." This noteworthy tidbit accompanied the news that six big banks have agreed to pay more than $5.8 billion to settle allegations related to foreign-exchange rate-rigging. Four of the six—Citigroup, JPMorgan Chase, Barclays and Royal Bank of Scotland—are also pleading…

Morning Scan: UBS Fined for Rate-Rigging; Top Threats to Financial System

Receiving Wide Coverage ... UBS Pays Up: Immunity didn't quite work out for UBS. The Swiss lender has agreed to pay $545 million to settle investigations into the alleged manipulation of foreign-exchange and Libor rates. UBS had reached a nonprosecution agreement with the U.S. back in 2012 over its alleged role in the Libor scandal, but prosecutors scrapped the deal when the bank later became implicated in forex rigging. Now it will plead guilty to one…

Morning Scan: What Shelby's Bill Means for QM; Wall Street Same as It Ever Was?

Wall Street Journal Ocwen Financial has put things right with the New York Stock Exchange after filing its annual report for 2014 last week. The NYSE had previously threatened to kick the troubled mortgage-servicing firm off the exchange for failing to comply with its listing standards. Now there's a new bullet for Ocwen to dodge: the firm said Monday it is working with lenders to adjust its debt arrangements in order to avoid liquidity problems. …

Morning Scan: Big Banks Step Up Small-Business Loans; Why 'Say on Pay' Fizzles

Wall Street Journal It's hard to let go of a juicy bonus — even if your former employer famously went down in the largest bankruptcy in U.S. history. The paper reports former hotshot Lehman Brothers trader Jonathan Hoffman is demanding $83 million in unpaid bonuses from the Lehman bankruptcy trustee. The estate, on the other hand, says Hoffman already got his cash courtesy of Barclays, which bought some Lehman assets and hired him after the company's…

Morning Scan: B of A's Board Backs Moynihan; Is Nick Szabo the Real Bitcoin Creator?

Wall Street Journal Despite shareholders' complaints about its sluggish stock price and earnings growth, Bank of America's board appears to be fully supportive of Chairman and Chief Executive Brian Moynihan. As part of an update on Moynihan's tenure, the Journal interviews directors, shareholders, former colleagues and Moynihan himself about his job performance. Jack O. Bovender Jr., the former CEO of hospital chain HCA and a B of A director, applauds Moynihan's personality. "You don't have to…

Morning Scan: Credit Cards Seek Merchants for Partnerships; Starbucks Mobile Hack?

Wall Street Journal Loyalty trumps lucrativeness, at least for the time being, in the world of credit cards. Issuers like American Express, JPMorgan Chase and Commerce Bancshares in Kansas City are all picking up the pace in securing co-branded partnerships with merchants. The reason? Some merchants' customer bases are deemed more loyal, even if they generate less fee income, and a partnership with a merchant is a considered a more efficient way to grow a customer…

Morning Scan: Shelby's Plan and Political Maneuvering; BNY Activists Profiled

Receiving Wide Coverage ... All Politics Is Local: The Wall Street Journal and Financial Times both look at the draft legislation introduced on Tuesday by Sen. Richard Shelby, R-Ala., to provide regulatory relief to financial institutions. American Banker stories provided an executive summary of Shelby's proposal and an analysis of how the political maneuvering will play out between Republicans and Democrats. The political game was the focus of one Journal story, with Democrats immediately expressing reservations…

Morning Scan: Reform Bill Targets Federal Reserve; Gruenberg Talks TBTF

Wall Street Journal The paper provides additional details on expected proposed changes to the Federal Reserve that could be included in the regulatory-reform bill forthcoming from Sen. Richard Shelby. A look at all of the various expected aspects of Shelby's bill was reported in detail in American Banker. According to the Wall Street Journal, Shelby's bill could require the Federal Reserve's Federal Open Market Committee to send to Congress "more details of the analysis and data…

Morning Scan: Big Banks Huddle in Response to Campaign Critics; Shifting to Loans

Wall Street Journal Sen. Elizabeth Warren, D-Mass., isn't running for president (as of yet) but her presence is certainly being felt in the C-suites of the largest banks. Seven executives from JPMorgan Chase, Goldman Sachs and other banks met at Bank of America Tower in New York on March 31, or dialed into a conference call, to discuss how to counter the campaign-trail argument that banks are bad, according to unnamed sources and emails obtained by…

Morning Scan: B of A, JPM to Set Right Credit Reports; How Kabbage Grows

Receiving Wide Coverage ... Not B of A's Day: Bank of America pops up in Friday's news for several reasons, none of them flattering. Over at the New York Times, columnist Gretchen Morgenson questions the distribution of Bank of America's $16.7 billion mortgage settlement. The bank is required to forgive or reduce borrowers' mortgage debt as part of the settlement and the amount of relief it provides is then deducted from the bank's total tab. There's…

Morning Scan: Sanders Goes After Big Banks; What's Jamie Dimon Worth?

Receiving Wide Coverage ... Sanders vs. the Big Banks: Presidential candidate Sen. Bernie Sanders is already stirring up trouble for big banks with legislation that aims to break up "too big to fail" institutions. As American Banker reported Wednesday, the bill's chances of passing are slim, but it's nonetheless helping to keep Wall Street reform a hot topic this election season. The New York Times points out Democratic candidate Hillary Clinton has been criticized for cozying…

Morning Scan: Ripple Labs Fined for AML Issues; HSBC Weighs Escape from London

Receiving Wide Coverage ... Ripple Hits a Bump: Digital currency startup Ripple Labs touts a focus on compliance as one of its distinguishing traits, which makes it surprising the company has just become the first virtual currency exchange to be slapped with a civil action. Ripple Labs has agreed to pay $700,000 and improve its anti-money laundering program as part of a settlement with the Financial Crimes Enforcement Network and the Department of Justice. U.S. authorities…

Morning Scan: DOJ Probes Fed Leak; B of A Gives Shareholders a Say in Chair Role

Receiving Wide Coverage ... Fed Pressed Over Leak: The Justice Department doesn't just go after big banks — it also pursues their regulators. The DOJ has joined the Federal Reserve's inspector general in investigating the Fed over a 2012 leak of its policy meeting minutes to a consulting firm. Fed chair Janet Yellen disclosed the news in a Monday letter to the House Financial Services Committee, which is conducting its own probe into the leak. Yellen…

Morning Scan: Buffett Dismisses SIFI Chatter for Berkshire; Banks Buying in to Bitcoin?

Receiving Wide Coverage ... Buffett Pooh-Poohs SIFI Talk: Banking was one of many topics discussed at Berkshire Hathaway's annual meeting in Omaha, Neb., on Saturday. Warren Buffett said it would be a "terrible thing to weaken" Dodd-Frank, and the Federal Reserve and Treasury Department's wide-ranging powers are necessary in order to respond to another large crisis. Buffett also scoffed at the notion that Berkshire Hathaway's insurance operations—GEICO, National Indemnity, Gen Re—should be deemed systemically important, as…

Morning Scan: Restricting Credit Union Membership; New York Fed's Top Bank Regulator to Depart

Wall Street Journal Now, not everyone can join. In response to complaints credit unions have expanded beyond their original mission to serve specific population groups, the top regulator of federal credit unions approved new rules limiting CU membership qualifications. Credit unions will no longer be allowed to set up charities and other associations, under their so-called Field of Membership rules, for the sole purpose of attracting new members. The National Credit Union Administration approved the rules…

Morning Scan: Banks Fight Back in Foreign Bribery Probe; Problems at Bank of Oswego

Wall Street Journal Over the past couple of years, federal officials have extracted billions of dollars from banks for mortgage-related issues and other various misdeeds. Now it appears banks may be fighting back a little bit harder, at least in the area of probes into alleged bribing of foreign officials. Unnamed sources say JPMorgan Chase is defending itself against the U.S. government's probe into whether it bribed foreign officials in China by giving jobs to "relatives…

Morning Scan: Banks Anti-Activist Loan Provisions Challenged; Staff Needed at Ginnie Mae

Wall Street Journal Activist investors have brought about another change to how banks to business. Banks have increasingly pushed for provisions in loan agreements to require corporate borrowers to repay a loan in full if a majority of directors are ousted by activists. Banks are ultimately worried that if an activist seizes control of a board, it might force the company to pursue debt-fueled stock buybacks, which would erode the company's credit rating. However, lawsuits are…

Morning Scan: Ace Cash Express Hit by Rioters; B of A Probed for Trades

Receiving Wide Coverage ... Riots in Baltimore: Most media outlets have coverage of the rioting in Baltimore, with at least 15 police officers injured and numerous businesses destroyed or looted, including a branch of Ace Cash Express, following Monday's funeral of Freddie Gray. Officials declared a state of emergency. Protesting the police force's alleged excessive force against the city's minority community, rioters burned and looted a CVS pharmacy and other buildings in the Mondawmin neighborhood. Additionally,…

Morning Scan: Deutsche Scales Back; When Bank Taxes Backfire

Receiving Wide Coverage ... Deutsche to Slim Down: Deutsche Bank plans to get smaller and simpler. The German lender unveiled a wide-ranging strategy aimed at improving profitability and capital ratios Monday, including plans to winnow down its investment banking and retail businesses. Deutsche will also aim to shed another $3.8 billion in expenses and focus on bolstering its transaction banking, asset and wealth management operations. It also announced on Friday plans to get rid of its…

Morning Scan: Deutsche's Delay Tactics; How to Fix Student Loans

Receiving Wide Coverage ... Sarao's Side of the Story: The London trader accused of triggering the May 2010 stock market "flash crash" denies plotting to manipulate prices by placing and canceling large orders. Navinder Sarao says in past but newly released emails with the British conduct authority that he simply relied on cat-like reflexes to make his moves. He says he might cancel an order because of "a move in one of the other markets that…

Morning Scan: BofA Appeals 'Hustle' Ruling; The Hazards of Spoofing

Receiving Wide Coverage ... Deutsche Nears Libor Deal: Deutsche Bank is expected to announce a $2.15 billion settlement with U.S. and British regulators over Libor rate-rigging charges, according to the papers. That would be the highest fine faced by any bank in relation to the Libor scandal so far. What makes Deutsche so special? New York's Department of Financial Services is involved in the deal, driving up the penalty, according to the Financial Times. The Wall…

Morning Scan: FDIC Floats Bank Failure Plan; The Man Behind the Flash Crash?

Receiving Wide Coverage ... The Flash Unmasked? Are the world's financial markets so vulnerable that they can be brought down by some guy in the suburbs? That unsettling question is bound to reverberate throughout the industry in the wake of news that U.S. authorities are charging a London trader with triggering the May 2010 "flash crash" that temporarily sent stocks plummeting. Authorities say Navinder Singh Sarao frequently manipulated futures contracts prices by submitting and then canceling…

Morning Scan: Wells Fargo Eyes GE Business Loans; Chip-and-Pin Mayhem

Breaking News This Morning ... Earnings: Fifth Third, Synovus Receiving Wide Coverage ... Bank Tax Backfire? British banks HSBC and Standard Chartered are considering fleeing the land of tea and crumpets for Asia in order to avoid the U.K.'s steep bank taxes. The discussion comes at the behest of shareholders rattled by Britain's decision last month to increase the bank tax by a third. (The tax has been hiked eight times since it was implemented in 2010, according…

Morning Scan: Deutsche to Ditch Postbank; Does the DOJ Give Banks Sweetheart Deals?

Receiving Wide Coverage ... Putting Postbank to Pasture: One way or another, Deutsche Bank plans to ditch its Postbank retail unit. The German megabank is leaning toward selling a majority stake in Postbank over the next year and a half whilst unloading a fifth of its investment-banking assets. But it's also considering the more drastic measure of getting out of retail altogether. The latter move has been recommended by some analysts, who say Deutsche should attempt…

Morning Scan: Bloomberg Terminal Failure Delays Trading; Fed Rate Worries

Receiving Wide Coverage ... Bloombergs Go Kaput: Add another name to the list of companies deemed systemically important: Bloomberg LP. The financial-data provider's terminals went down in Asia and Europe overnight, or perhaps even worldwide, leading the U.K.'s debt-management office to cancel a scheduled transaction to buy back government debt. The total system failure prompted Louis Gargour, chief investment officer at LNG Capital, to say, "a global outage like this is systemically important to markets all…

Morning Scan: Bernanke to Join Hedge Fund Citadel; B of A's Weak Returns

Breaking News This Morning ... Earnings: Citigroup, Key Corp, Goldman Sachs New York Times Former Fed chairman Ben Bernanke is set to take a job as an adviser to hedge fund Citadel. Banks had recruited Bernanke, he told the paper (without naming his suitors), but he declined their offers. It's a well-worn path between the Federal Reserve and the private sector, particularly hedge funds. Former Fed chair Alan Greenspan worked as a consultant to hedge fund…

Morning Scan: BNY Mellon Fined by U.K. Regulator; Target, MasterCard Discuss Settlement

Breaking News This Morning ... Earnings: Bank of America, PNC, U.S. Bancorp Receiving Wide Coverage ... Custody Bank Fined: Bank of New York Mellon has been fined £126 million, or about $185 million, by a U.K. regulator for failing to keep client money separate from its own proprietary accounts in its London office. The rules are intended to protect client assets if the bank were to became insolvent. BNY Mellon failed to implement sufficient governance measures to prevent…

Morning Scan: Citi CEO Succession Plan Set? Pot Bank's Exit Strategy

Breaking News This Morning ... Earnings: JPMorgan, Wells Fargo Wall Street Journal Citigroup's reshuffling of executives announced on Monday included the appointment of a clear number two executive behind CEO Michael Corbat. Citi named Jamie Forese its sole president, making him the likely successor to Corbat should he step down, unnamed sources told the paper. Forese's promotion was not mentioned in a letter Corbat sent to Citi employees on Monday. Forese is currently head of Citi's investment bank…

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