BankThink

Receiving Wide Coverage ...Libor Update: Some big Libor news this Friday morning, courtesy of the Wall Street Journal — U.K. and U.S. authorities are preparing to file criminal charges against former Barclays employees for their alleged roles in the London interbank offered rate-rigging scandal. Sources familiar with the matter tell the paper charges are "likely to be filed this summer," but that "the plans aren't finalized and could be delayed or modified." The sources don't appear to be naming names (or specifying what the charges will be), but authorities are believed to be targeting "midlevel traders," not top-tier execs. The article notes "the planned criminal cases indicate that government investigations into Libor manipulation, which have been under way since 2008 and until now have targeted mostly institutions rather than individuals, are moving into a new phase." It also mentions that more legal settlements between regulators and other banks are expected this summer. In other Libor news, the Financial Times' banking editor Patrick Jenkins shares his thoughts on the European Union's push to move Libor out of London and under the oversight of the Paris-based European Securities and Markets Authority. "Esma … may not have the power or resources to intervene directly, according to one U.K. official," he writes. "Even if these proposals ever materialize as rule changes, it seems the consequences will be largely symbolic and political rather than material."

The Consumer Financial Protection Bureau released exam guidelines on how the bureau plans to enforce the recently released mortgage rules.

Lowering overhead (relative to assets) would be a powerful motivator for a bank to get big, fast. But the savings just aren't there.

As the government banishes home loan products deemed unsuitable for most borrowers, why does it continue to backstop one that’s pitched to aging seniors – mainly by nonbank lenders?

It's not just the anonymity. Like cash and Bitcoin transactions, Liberty Reserve transfers were non-reversible, and that's important to certain merchants.

Receiving Wide Coverage ...SEC's Money Market Plan: The Securities and Exchange Commission has (finally) proposed rules to overhaul the money market fund industry. The rules present two alternatives. One would require prime funds to abandon their $1 fixed share price and use a floating net asset value, allowing share prices to reflect changing market-based value. The other permits stable share prices, but would impose temporary suspensions (or "gates") and 2% liquidity fees on redemptions in times of crisis. The proposals will now be subject to a 90-day comment period. "A key test will be whether they survive … continued efforts by the mutual-fund industry to scale them back," says the Journal. The industry could have faced a tougher battle. "The proposal is less sweeping than the approach initiated last year by then-SEC Chairman Mary Schapiro," the Washington Post notes, and general consensus from observers seems to be that the proposed reforms don't go far enough. This Journal op-ed criticizes, among other things, the plan's failure to remove endorsements of credit-rating agencies from money-fund rules and the SEC's alternate proposal to erect gates hindering investors from selling shares during a crisis. "These [gates] look like new triggers that could inflame a panic," the op-ed notes. "Just as 'breaking the buck' added to the drama of 2008, we wonder if regulators won't be on weekend conference calls fretting over a potential 'shutting of the gate' at some large fund in the future." On the plan as a whole, one consumer advocate tells Dealbook: "It is really worse than no reform at all because it's false comfort. It's like putting in a nice shiny fire alarm system in a building that doesn't work."

Banks' defense against litigation over the sale of bad mortgage-backed securities to Fannie and Freddie hinges on the unseemly idea that it is unreasonable to assume that the world's largest banks would comply with the Securities Act of 1933.

In a final rule meant to limit the systemic effects of company failures, the Federal Deposit Insurance Corp. defined which financial firms are subject to Dodd-Frank resolutions.

American Banker's Editor-at-Large Barbara Rehm explains why the next 18 months are critical to the financial industry and why federal regulators must finish the majority of Dodd-Frank provisions by the end of 2014.

To survive, Bitcoin businesses will have to do more than "de-anonymize" their operations. They will also have to cope with the loss of the digital currency’s most fundamental characteristic: irrevocability.