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morning scan

Morning Scan: SEC Votes for Clawbacks; Silk Road Agent Dreamed of Silver Screen

Editor's note: Morning Scan will not publish on Friday, July 3 in observance of the Independence Day holiday. We'll be back on Monday, July 6. Receiving Wide Coverage ... Better Check the Math: Executives may soon have more skin in the game when it comes to accurate financial reporting. The Securities and Exchange Commission voted 3-2 to back a new plan that would require public companies to rescind executive officers' bonuses if accounting errors are discovered …

Morning Scan: Tsipras Softens Greek Demands; Will Fintech Kill Universal Banks?

Receiving Wide Coverage ... Ch-Ch-Changes: Fintech will be shaking up the banking industry for years to come, according to a report from the World Economic Forum and Deloitte. The wide-ranging report instructs banks to prepare themselves for a state of near-constant disruption as tech firms alter consumers' expectations by making financial services faster and cheaper. The Wall Street Journal notes the reports' authors also arranged meetings between old-school behemoths like Visa and JPMorgan Chase and upstarts…

Morning Scan: JPMorgan Upgrades Prepaid Cards; Who's Afraid of a Grexit?

Receiving Wide Coverage ... All Eyes on Greece: Now that Greece has closed its banks for at least a week in order to avoid a run as bailout negotiations with the European Union have stalled, speculation is rampant about how the emergency measure will play out. The Wall Street Journal warns Greek banks may not have enough cash on hand to get through the week if all of the country's residents withdraw the maximum amount permitted…

Morning Scan: Greece Shutters Banks as Crisis Intensifies; Fintech's Many Fans

Receiving Wide Coverage ... Greece Bank Shutdown: Greece has closed its banks for the next six days and imposed capital controls in an effort to avert financial panic as the country edges closer to a potential exit from the eurozone. Over the weekend, steady streams of depositors had already emptied many ATMs in Athens, according to the Wall Street Journal. The rapidly escalating Greek debt crisis rattled global markets Monday, with the S&P 500 on track…

Morning Scan: Disparate Impact Survives; CFPB Unleashes Complaints

Receiving Wide Coverage ... Disparate Impact Sticks Around: The Supreme Court backed the "disparate impact" legal theory yesterday in a decision that dashed the hopes of banks while buoying housing advocates and the Obama Administration. Justices came to a 5-4 decision affirming that plaintiffs can sue organizations under the Fair Housing Act of 1968 by alleging that their housing practices disproportionately impact minorities, even in the absence of proof of intentional discrimination. The New York Times…

Morning Scan: Reputational Challenges; Home Loans Get Riskier

Receiving Wide Coverage ... Regaining a Good Name ... Slowly: Americans trust banks more now than they did in 2012—but that's a pretty low bar to clear. Twenty-eight percent of people say they have a lot of confidence in banks, up from 21% the last time the survey was conducted three years ago, according to a June Gallup survey of 1,527 adults. While the American Bankers Association's blog appeared heartened by the improvement, other op-eds say…

Morning Scan: Housing's Uneven Recovery; Digital Banking on Dates

Receiving Wide Coverage ... An Uneven Recovery: Home prices are appreciating in wealthier areas, but values in poorer towns continue to lag behind, the Wall Street Journal reports. In the working-class suburb of Lithonia, Ga., for example, 54% of homeowners are underwater; the same is true of 15% of homes worth less than $200,000 nationwide, compared to just 6% of homes worth more than $200,000. One way to help struggling homeowners could be to slash the…

Morning Scan: Bernanke's a Hamilton Fan; Teaming with Marketplace Lenders

Receiving Wide Coverage ... Save Hamilton: Ben Bernanke has joined the growing chorus of those who say the Treasury should bump Andrew Jackson from his perch on the $20 to make way for the first woman on U.S. currency — and leave Alexander Hamilton be on the $10. The former Fed chief writes on his blog that he's "appalled" by the plan to push aside Hamilton (who Bernanke calls "without doubt the best and most foresighted…

Morning Scan: Dimon on Jimmy Lee; Regulators' Biggest Fear

Wall Street Journal Jimmy Lee, the JPMorgan Chase vice chairman who unexpectedly died last week, will be "irreplaceable," according to CEO Jamie Dimon. Lee was responsible for being the point man to JPMorgan's top corporate clients; his duties will be farmed out to several executives. One example of Lee's importance: when General Electric earlier this year decided to sell off its GE Capital banking unit, Dimon and Lee were both summoned to a GE conference room…

Morning Scan: Ancient IT Hobbles Banks; Saving Hamilton

Receiving Wide Coverage ... Brushing the Dust Off IT: Banks around the world use IT systems are basically antiques, and recent tech glitches at Royal Bank of Scotland and Commonwealth Bank of Australia are making that problem increasingly difficult to ignore. The Financial Times reports that part of the issue is that three-quarters of banks' tech spending has to go toward the cost of keeping the old, complex systems running, leaving them with just a fraction…

Morning Scan: Fed Inches Toward Rate Hike; A Woman on the Ten-Spot

Receiving Wide Coverage ... Rate-Hike Watch: The Federal Reserve still plans to raise rates later this year. But much like an overbooked friend, it prefers to keep its level of commitment to that plan soft. Both the New York Times and the Wall Street Journal emphasize that the pace of the eventual rate hike is likely to be even slower than expected. The central bank may increase rates just once in 2015, by a quarter percentage…

Morning Scan: Stress-Test Season Kicks Off; Overdrafts Slide

Receiving Wide Coverage ... No End to AIG Case: In answer to yesterday's Morning Scan question about whether former AIG chief Maurice Greenberg would be appeased by a federal court ruling that validated his case against the federal government but awarded AIG shareholders zero dollars: nope. Greenberg plans to appeal the decision by Judge Thomas Wheeler, the papers report. Wheeler found that the government had reached beyond its legal authority in the 2008 bailout of insurer…

Morning Scan: Will AIG Ruling Deter Bailouts?; Goldman's Online Lending Bet

Receiving Wide Coverage ... Analyzing the AIG Ruling: Is former AIG chief Maurice "Hank" Greenberg a happy man? A federal judge partially validated Greenberg's four-year legal battle with the government Monday by ruling that the Federal Reserve overstepped its authority in the 2008 bailout of the insurance giant. But Judge Wheeler also declined to award Greenberg and other AIG shareholders any of the $40 billion in damages they had requested, arguing that AIG would have filed…

Morning Scan: Default Dangers; Terror Victims' Claims on BNP Fine

Wall Street Journal BNP Paribas pleaded guilty in 2014 to breaking U.S. sanctions against Sudan, Iran, Cuba and other countries listed as state sponsors of terrorism. So it seems to make sense that victims of terrorist attacks should receive a share of BNP's $9 billion fine. The matter of how to determine which victims deserve a portion of the funds is proving to be a knottier question. Groups including survivors of the 1979 Iran hostage crisis…

Morning Scan: Hedge Fund Loses Big on JPMorgan Lawsuit Bet; Mortgage Refi Market Chilled?

Wall Street Journal Hedge funds have been placing bets on how judges will rule in lawsuits stemming from bankruptcies or crisis-era dealings. At least one of those hedge funds, Appaloosa Management, lost big when a judge ruled in favor of JPMorgan Chase this week. Hedge funds bet by acquiring deeply discounted securities, such as corporate bonds, that are likely to increase in value if the judge rules their way. That didn't happen in the JPMorgan case…

Morning Scan: Ukraine's Rebel Financing; Santander Shakeup

New York Times Why is this not deemed to be money laundering? Pro-Russia rebel groups in eastern Ukraine have raised money through crowdfunding sites to fund their military campaigns. Much of their funding comes via Russian state-owned banks, including Sberbank, and through a private system of payment terminals owned by the company QIWI, which is affiliated with Visa. The rebel groups have also solicited funds from outside Russia using U.S. and European banks and through PayPal…

Morning Scan: Big Business Fights for Ex-Im Bank; Anarchy in the U.K.: Virgin's Sex Pistols Cards

Wall Street Journal Big businesses in the U.S. are getting more aggressive in their attempt to keep the Export-Import Bank alive. Manufacturers including Boeing, Dow Chemical, General Electric and nuclear power-plant operator Westinghouse Electric say they may move operations overseas if the Ex-Im Bank closes, because competition for basics like water and electric is so cutthroat and Ex-Im Bank provides guarantee financing. Moreover, U.S. manufacturers' industrial contracts in developing countries will also be in jeopardy. Many…

Morning Scan: HSBC to Cut Up to 50,000 Jobs, Refocus U.S. Unit; HELOC Rate Resets

Receiving Wide Coverage ... The World's Local Bank, but Smaller: HSBC announced a plan to cut 25,000 to 50,000 jobs worldwide, in an effort to save about $5 billion yearly. How many of those job cuts will hit its U.S. operations wasn't reported. But the Wall Street Journal said HSBC plans to have its U.S. bank focus on international operations and less on domestic operations. "We will obviously need to turn the U.S. business around," CEO…

Morning Scan: New York AG Urges Banks to Limit Tellers' Data Access; GE Preps Sale

Wall Street Journal Time to crack down on the tellers. Banks were advised to limit tellers' access to customer data and also do more to detect signs of misbehavior. New York Attorney General Eric Schneiderman sent that advice to banks in a letter on Friday; the AG's office has been investigating tellers for stealing customer data and money, an unnamed source said. In one case, a group of tellers and outside accomplices stole $850,000 using customers'…

Morning Scan: Goldman May Soon Settle Mortgage Probe; Overdraft Relief?

Wall Street Journal A few details have leaked out (all from unnamed sources) concerning the upcoming settlements between the Justice Department, state attorneys general and banks over the sale of mortgage-backed securities in the run-up to the financial crisis. The Journal said up to nine banks are about to finalize the details of their settlement agreements. Goldman Sachs and Morgan Stanley could settle their cases as early as late June. Others expected to reach settlements in…

Morning Scan: JPMorgan Wins Round Versus FDIC in WaMu Battle; MasterCard Enters Somalia

Wall Street Journal JPMorgan Chase won a key legal battle in its effort to avoid paying billions of dollars stemming from Washington Mutual's alleged misdeeds. A federal judge on Wednesday ruled the Federal Deposit Insurance Corp., not JPMorgan, which acquired the thrift in 2008, is liable for legal claims related to WaMu. The agency can appeal the ruling; an FDIC spokesman declined to comment. If the ruling survives appeals, JPMorgan is likely to avoid having to…

Morning Scan: Credit Unions Probed for AML Weakness; Three Banks Reject Target Settlement

Wall Street Journal Regulators are looking at credit unions, and regional banks to a lesser extent, as the weak link in the money laundering fight. With regulatory scrutiny pushing big banks out of the business of handling transactions for money-services businesses, such as check-cashers, those businesses are now turning to credit unions. And many of those credit unions are small institutions without the sophisticated technology and processes needed to weed out money-launderers. Drug dealers and other…

Morning Scan: Supreme Court Sides with B of A; Can Bank Reports Rebuild Trust?

Receiving Wide Coverage ... Stuck with Second Mortgages: The Supreme Court sided with banks Monday by ruling homeowners cannot void second mortgages in bankruptcy even if their homes are underwater. The unanimous decision in favor of Bank of America leaves struggling homeowners with even fewer options, according to New York Times columnist Stephen Lubben. But he suggests banks may eventually have to provide relief to underwater borrowers "if they ever want to move on. After all,…

Morning Scan: British Banks Search for FIFA Fouls; Will Citi Close Banamex USA?

Receiving Wide Coverage ... Banks Hunt for FIFA Liability: As banks in the U.S. and U.K. face scrutiny over whether they should have flagged transactions tied to the FIFA bribery scandal, some of Britain's largest financial institutions are looking to get ahead of the ball. The Wall Street Journal reports Barclays and HSBC are conducting internal reviews of the payments allegedly used to transfer $150 billion in bribes and kickbacks to soccer officials. The BBC has…

Morning Scan: Visa Threatens FIFA Sponsorship Withdrawal; Fuld Bites Back

Receiving Wide Coverage ... Red Card: Visa has become a key player in the FIFA corruption scandal. The credit-card network, one of FIFA's top corporate sponsors, said it's disappointment in the FIFA scandal was "profound" and added it may end its sponsorship agreements with soccer's governing body if changes aren't made. Visa's comments were the strongest voice of concern among all of FIFA's corporate sponsors. FIFA earns a total $177 million yearly from corporate sponsors, which…

Morning Scan: JPMorgan Probe Reaches Top of Chinese Ranks; Prepaid Cards at Fault in IRS Breach?

Receiving Wide Coverage ... Chinese Connections: U.S. officials' investigation of potential violation of antibribery laws is reaching to some of the highest levels of the Chinese government. Two agencies, the Securities and Exchange Commission and the Justice Department, have subpoenaed JPMorgan Chase for information about Wang Qishan, one of seven members of the Chinese politburo that rules the country, the Wall Street Journal and Financial Times reported, citing a copy of the April 29 subpoena and…

Morning Scan: IRS Admits Crooks Steal Customer Info; Libor 'Ringmaster' Goes on Trial

Receiving Wide Coverage ... Cracking the Tax Code: The taxman is the latest victim of identity theft. The Internal Revenue Service said hackers stole tax-return information for about 100,000 U.S. households, including Social Security numbers. The thieves used the IRS's own online services to penetrate its databases, cracking the code of multistep authentication processes. Interestingly, the IRS commissioner, John Koskinen, said the incident was "not a hack or data breach. These are imposters pretending to be…

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…