SEC Nominee Sails Through Confirmation Hearing; Cyberattack Watch

Receiving Wide Coverage ...

The Mary Jo White Hearing: "Not a single senator voiced even slight opposition to President Obama's pick to head the Securities and Exchange Commission," the Post reports, despite what the Journal described as "pointed questions from lawmakers about whether her time spent defending Wall Street banks would impinge on her ability to police Wall Street." Importantly, Mary Jo White indicated flexibility on reforming money market funds, telling the Senate Banking panel that "any new rules would not interfere with 'the value' of the funds," according to the Times, which says the remark "alarmed investor advocates." Wall Street Journal, New York Times, Washington Post

Cyberattacks: JPMorgan Chase's consumer website was hit with another denial of service attack as intelligence officials warned senators about escalating cybersecurity threats from criminals, terrorists and hostile governments. The sequestration budget cuts will undermine the nation's defenses against such threats, complained Director of National Intelligence James Clapper. On the kinda-reassuring side: Banks, along with Internet service providers, are generally "pretty good" at protecting their networks, unlike power companies, according to Army Gen. Keith Alexander, head of the U.S. Cyber Command.

Wall Street Journal

During the same Senate Banking hearing as White, "Richard Cordray answered polite questions … but there were no signs he will be confirmed for a full term as director of the Consumer Financial Protection Bureau. There was little talk of a compromise to resolve criticisms of the regulator's structure that Republicans have raised."

"Discover Bets on Housing Rebound, Expands Into Home-Equity Lending"

"Paper stock certificates, already reduced to novelty status in the financial markets, are poised to get even rarer. Depository Trust & Clearing Corp. is seeking to end the issuance of new securities certificates and speed up moves to take older ones out of circulation."

Financial Times

Mortgage bond investors are threatening to cut back purchases or demand higher yields on new private issues to "retaliate" for the OCC settlement that ended the large banks' foreclosure reviews. Since the banks can fulfill part of their obligations under the $9 billion settlement by modifying loans serviced for others, bondholders say they are once again being punished for servicers' errors. Private-label mortgage bond issuance has been sparse, and an investor boycott could keep it so, meaning the government (taxpayers) would continue to take most of the credit risk in housing.