BANKTHINK

morning scan

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…

Morning Scan: Fed Walks a Fine Line on Rates; DoJ Vows to Prosecute Bankers

Receiving Wide Coverage ... Fed Balancing Act: The Federal Reserve's policy-making Federal Open Market Committee announced Wednesday that the central bank will keep interest rates low in the near-term, though it could change course sooner than expected if data shows greater economic improvement. The Fed's statement, which was approved by an 8-2 vote, noted that unemployment levels remain subpar. "There are still too many people who want jobs but cannot find them, too many who are…

Morning Scan: CFTC Wins Overseas Swaps Suit; Credit Suisse in Trouble with Fed

Receiving Wide Coverage ... A Win for the CFTC: A federal judge has given the Commodity Futures Trading Commission a green light to regulate overseas swaps trading. Citing the CFTC's mandate under the Dodd-Frank Act, the judge "dismissed arguments by three Wall Street trade groups that the CFTC overstepped its authority in issuing new rules and guidance related to overseas swaps transactions," the Wall Street Journal reports. The New York Times suggests the ruling signals a…

Morning Scan: Banks Vie for No. 1 Slot in Apple Pay; Citi Nears IPO for One Main

Receiving Wide Coverage ... Apple Pay's Ripple Effects: Big banks are vying to have their cards at the top of iPhone users' mobile wallets when Apple Pay debuts next month. Apple has yet to release details of how its mobile payments system will work, but the Financial Times reports that everyone is betting consumers will be able to select a particular card as the default payment option. That's a scary prospect for lenders like the San…

Morning Scan: Novo Banco Turnover; U.S. Flips Bankers for Rate-Rigging Probe

Receiving Wide Coverage ... More Tumult at Portuguese Bank: The "good bank" created after the government rescue of Portuguese lender Banco Espírito Santo has a new leader after its top management team resigned Saturday. Portugal's central bank on Sunday appointed Lloyds Banking Group executive Eduardo Stock da Cunha to head Novo Banco. Stock da Cunha "will have the difficult task of retaining customers at the bank … while it prepares itself for a sale, which Bank…

Morning Scan: Banks Partner with Apple, but Retailers Resist; Dimon's Recovery

Receiving Wide Coverage ... Apple Pay Dissected: Apple Pay "respect[s] our role in the ecosystem" of payments, said James Anderson, senior vice president of product development at MasterCard. And therein lies one explanation of why banks were apparently so eager to partner with Apple on its new payments network, despite the fact they're expected to take a hit to some revenue streams (Apple must have a lot of clout, if this statement from the Times is…

Morning Scan: Reactions to Apple Pay; Santander's Succession Plan

Receiving Wide Coverage ... Paying with Apple: Banks have bought into what Apple's selling with its near-field communications-based Apple Pay system, as they like its security features, intuitive user experience and the Apple brand name, and also they harbor the hope that Apple Pay will drive additional credit card usage, as American Banker reported. Retailers, not so much. Yes, starting in October, you'll be able to wave your iPhone 6 in front of an NFC reader…

Morning Scan: Apple Jumps into Payments; Senate Talks Tough

Receiving Wide Coverage ... Paying with Apple: He may not be egotistical like Steve Jobs was, but Tim Cook at least took a stab at making a huge boastful statement. "We've created an entirely new payment process" Cook, Apple's CEO, said at the launch of the iPhone 6 on Tuesday. This statement was made notwithstanding the fact that many of the iPhone's new payments features have already been introduced by others. The new iPhone will be…

Morning Scan: Higher Capital Requirements Coming from Fed; Home Depot Breached

Receiving Wide Coverage ... More Capital Needed: Fed Chair Janet Yellen has pushed for higher capital requirements for SIFIs, and details of the Fed's plans in that area are to be released Tuesday at a Senate Banking Committee hearing, the Wall Street Journal reports. Some larger banks could face a levy as high as 4.5%, as the Fed is looking for a capital surcharge as much as two percentage points higher than the 2.5% maximum in…

Morning Scan: Big Banks' New Legal Front: Derivatives; Union Bank's Aspirations

Wall Street Journal The Fed's giant stash of assets is the equivalent of a semipermanent sovereign wealth fund, argues David Malpass, a deputy assistant Treasury secretary in the Reagan administration, in a Journal op-ed. It's one of the "world's largest and most leveraged bond portfolios, taking massive interest-rate risks." Malpass says the Fed should be coerced into establishing a "clear portfolio wind-down process" to allow it to concentrate on monetary and regulatory policy. Financial Times …

Morning Scan: MetLife Faces SIFI Tag; Apple to Boost Security

Receiving Wide Coverage ... MetLife and the Dreaded S-Word: Much to MetLife’s dismay, the Financial Stability Oversight Council voted Thursday to propose that the firm be designated as a systemically important financial institution. The life insurer’s chief executive Steven A. Kandarian indicated that MetLife may contest being lumped into the group that includes nonbanks American International Group, Prudential Financial and General Electric Capital. The company is "not ruling out any of the available remedies under Dodd-Frank…

Morning Scan: Takeaways Vary on Liquidity Rules; More Prosecutors Head Out the Door

Receiving Wide Coverage ... Parsing the New Liquidity Rule: The newspapers had very different takes on a new liquidity rule requiring large banks to hold enough safe assets to survive at least 30 days in the event of a crisis. The Wall Street Journal says regulators "provided some relief to large U.S. banks" by allowing those with assets between $50 billion and $250 billion to calculate compliance with the rule on a monthly rather than daily…

Morning Scan: Regulators to Vote on Liquidity Rules; Fee Revenue Takes a Dive

Receiving Wide Coverage ... Home Depot Probes Breach: Home Depot may be the latest retailer to have customer credit and debit card information fall prey to a data breach. The home-improvement store is keeping pretty mum about the details of its investigation into so-called "unusual activity." But security expert and blogger Brian Krebs, who broke the story, reported that "the breach may have extended across all of Home Depot's U.S. stores and could date back to…

Morning Scan: Barclays Bids Spain Adios; NY AG to File Buffalo Redlining Suit

Receiving Wide Coverage ... Barclays Tells Spain Adios: Barclays plans to sell its Spanish retail bank, wealth and investment management and corporate banking divisions to Caixabank for $1 billion. The move is part of Barclays' larger effort to scale back in unprofitable markets; the Wall Street Journal reports it will lose $830 million in the sale. "Heard on the Street" suggests since the "sale price valued the Spanish business at about half of book value …

Morning Scan: Cyber Attack Limited to JPMorgan?; iPhone Payments Threat

Editor's note: Morning Scan will not publish on Monday, Sept. 1 in observance of the Labor Day holiday. We'll be back on Tuesday, Sept. 2. Receiving Wide Coverage ... Was JPMorgan Chase the Only Victim? Seven large banks said Thursday that they had no indication that their systems had been breached in the latest cyber attack on financial institutions, the Wall Street Journal and Financial Times both reported. Bank of America, Wells Fargo, U.S. Bancorp, PNC Financial…

Morning Scan: 'Sophisticated' Cyber Attacks on Banks; Lending Club's IPO

Receiving Wide Coverage ... Hacked: JPMorgan Chase and at least four other banks were hacked this summer in a "sophisticated" cyber attack, the Times reports, and the hackers are said to have stolen customers' checking and savings account information. The FBI and Secret Service are investigating whether the hackers have Russian ties. JPMorgan "isn't seeing considerable fraud related to the attack," the Wall Street Journal reports, citing anonymous sources, without really explaining what that vague statement…

Morning Scan: Dodd-Frank Rules Expected; Stumpf Talks

Wall Street Journal Dodd-Frank-mandated rules on providing more information on the quality of the mortgages and other loans that back securities are expected to be finalized Wednesday. The Securities and Exchange Commission's rules on asset-backed securities will require banks to provide data to investors like borrowers' credit scores and debt levels. The idea is to help investors rely less on credit ratings. The SEC is also expected to release rules forcing Moody's, S&P and other debt-rating…

Morning Scan: Hedge Funds Sue BNY Mellon; Community Banks' Bond Sales

Receiving Wide Coverage ... Sued: Several hedge funds have sued Bank of New York Mellon over its trustee role in overseeing payments from bonds on which Argentina defaulted in 2001. The suit, filed in London, seeks access to the interest payments the funds claim they are owed, after a federal judge blocked the payments last month. Wall Street Journal …

Morning Scan: Yellen's Mixed Signals; Banks to Exit Muni Bonds?

Receiving Wide Coverage ... Mixed Signals: Fed Chair Janet Yellen went to Wyoming and all she brought back to Washington, D.C., was a lousy T-shirt, with no better sign whatsoever of when short-term interest rates will rise. At the Kansas City Fed's yearly economic symposium in Jackson Hole, Wyo., Yellen gave a slew of mixed signals on whether she thinks the U.S. job market has improved enough yet to warrant a rise in rates, the Wall…

Morning Scan: B of A's 'Mortgage Sins'; CFPB Can't Stop Revolving Door

Receiving Wide Coverage ... BofA's 'Mortgage Sins': Documents released as part of Bank of America's $17 billion settlement with the U.S. government "read like a highlight reel of the mortgage sins that fed the 2008 financial crisis," the New York Times reports. The Times and the Wall Street Journal focus on a few particularly striking passages. Former Countrywide Financial chief Angelo Mozilo warned in a 2005 email that a possible condo-market crash would be a "financial…

Morning Scan: Countrywide's Mozilo May Face U.S. Suit; BofA to Reach $17B Deal

Receiving Wide Coverage ... BofA's $16.7B Settlement: The Justice Department and Bank of America are expected to announce a $16.7 billion deal Thursday to settle charges the bank misrepresented the quality of its mortgage-backed securities. "The settlement amount is the largest ever reached between the U.S. and a single company, and is approximately equal to the bank's total profit for the past three years," the Wall Street Journal reports. Bank of America chief Brian Moynihan has…

Morning Scan: Another AML Hit for Standard Chartered; BofA's Montag Now Sole COO

Receiving Wide Coverage ... AML Déjà Vu: Standard Chartered has agreed to pay $300 million, accept temporary restrictions on its dollar-clearing activity and cut ties with some business clients in the United Arab Emirates in order to settle charges related to flaws in its system for identifying suspicious transactions. This is the second time the New York State Department of Financial Services has hit the British Bank with an anti-money laundering penalty in just two years.…

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