Receiving Wide Coverage ...
Another U.K. Banking Probe: Lloyd's Banking Group is at the center of the U.K. Financial Services Authority's crackdown on the mis-selling of financial products. According to the Journal, the FSA found Lloyd's to be "particularly aggressive in its sales strategies" of products, such as payment protection insurance, during its wider investigation of the practice and, as such, have launched an official probe into the commissions the bank offered branch employees on sales. Lloyd's, which has come under fire for mis-sold payment protection insurance before, says it has "made significant changes" to its "incentive schemes" since the start of the year.
As part of the general crackdown, Martin Wheatley, head of the FSA's conduct division, told the U.K. banking industry to scrap plans that emphasize sales over suitably during the next 18 months or new rules would be introduced. The FT calls this move "an early signal of the tough new approach" Wheatley is likely to take when the FSA is split up and he takes over as head of the independent Financial Conduct Authority next year. But this op-ed from the paper also suggests Wheatley may be doing a little showboating in preparation for the new position and that too many probes can be dangerous. "There is a difference between a lively but safe financial services industry and a dead one," the author writes. "Too many regulatory inquiries risk tilting the balance towards the latter."
Wall Street Journal
Following a similar move from Visa, MasterCard is pushing into Myanmar, "which has become arguably the world's sexiest new frontier market."
Prepaid cards are dipping a toe in the credit industry as some consumers have taken to loading small-dollar loans onto the product. The practice is problematic since high card fees can deplete the already expensive loan. Several consumer groups are asking the Consumer Financial Protection Bureau "to prohibit prepaid cards from offering any type of credit."
Financial Times
Citigroup is getting into the European commodity trade finance business just as many of the country's banks pull out of the industry due to difficulties meeting regulatory capital requirements. Citi plans to "start by financing energy deals before considering metals and 'soft' commodities such as wheat."
Meanwhile, Goldman Sachs is "quietly" increasing the amount of loans and credit products it sells to affluent individuals. These products include "subscription capital call loans," which help fund private equity investments, and "standby letters of credit," which act as a guarantee of payment.
New York Times
Wall Street has been given an extension. New derivatives rules, originally expected to be enforced in October, will not go into effect until January 1, the Commodity Futures Trading Commission confirmed. The announcement should help to clear up some of the confusion on the Street related to conflicting statements from the CFTC and overlapping due dates of other provisions outlined by Dodd-Frank.
The Securities and Exchange Commission has moved to lift advertising restrictions for hedge funds and other kinds of private investment offerings. Should the move go through, this DealBook article notes, "we can look forward to an ad featuring a wizened couple in matching tubs overlooking a sunset, holding hands and talking about how they just put money with the next George Soros."
A survey says JPMorgan Chase, former home to the London Whale and his growing list of possible associates, is the best investment bank to work at in North America.
