B of A Settles with Fannie: B of A has agreed to pay $10.3 billion to settle claims that it sold bad loans to Fannie Mae. Under the terms of the settlement, the bank will pay Fannie $3.6 billion, and will also spend $6.75 billion buying back mortgages from the housing giant at a discount to their original value. The settlement is likely to wipe out B of A's earnings for the quarter, the FT reports. New York Times, Wall Street Journal
Basel Eased: Some good news for bankers this Monday morning: global regulators have decided to implement more flexible Basel III liquidity requirements. Specifically, they have relaxed the "liquidity coverage ratio" requiring banks to have enough capital on hand to survive a 30-day market crisis. Changes to the rule will now allow banks to use less-traditional assets, including equities and high-quality (ahem) mortgage-backed securities, to satisfy up to 15% of their requirements. According to the FT, "calculation methods have also been changed in ways that will significantly reduce the total size of the liquidity buffers" many banks will have to "hold against outflows from possible depositor runs and corporate and interbank credit lines." Regulators have also elected to give banks more time to meet the rule's requirements. Now, it will not take full effect on Jan. 1, 2015, as originally planned, but will be phased in gradually until Jan. 1, 2019. European bank stocks surged, following the announcement, the FT reports.