Receiving Wide Coverage ...
Libor Shuffle: We suspected Libor was going to be big news this week. Following CFTC chairman Gary Gensler's call for radical reform of the Libor system, reports surfaced that the British Bankers' Association has voted to give control of the benchmark interest rate — which the BBA itself created back in 1986 — to someone else. The trade association's vote, which took place earlier this month, precedes the formal recommendations from U.K. Financial Services Authority managing director Martin Wheatley expected to be unveiled on Friday. The Times says the group's potential removal is "a blow to the organization," while the FT's Jonathan Guthrie calls the BBA's decision "the decent thing" to do. His op-ed, however, also points out that the trade association should have stepped down much sooner and equates the move to "an old-fashioned army suicide" preceding a dishonorable discharge at the hands of Wheatley. "The pre-emptive move amounts to banks telling customers: 'We can't be trusted,'" Guthrie writes, while adding that a switch in oversight may not preclude more scandals from popping up since "regulation and Whack a Mole have much in common."
As for who exactly will take over that oversight, the Journal cites the Bank of England, the Financial Stability Board and the Bank for International Settlements as potential Libor overseers. It also says Libor "could be run by a private company but overseen by public authorities."
Santander Sets Share Prices: Share prices have been set for the biggest public offering of a Mexican company ever. Spanish bank Santander will sell shares in its Mexican unit "near the midpoint of the 29 to 33.5 peso range," which would "value the expected sale of 24.9% of the local bank at more than $4 billon", the FT reports. According to the Journal, despite some analyst sentiment this valuation may be on the high side, Mexican investors remain enthusiastic about the offering with one trader telling the paper, "We're in diapers here; there are very few options for owning shares in the banking sector." Shares are expected to start trading in both New York and Mexico City this Wednesday.
Wall Street Journal
Bank of America Merrill Lynch will be cutting about 40 jobs in its Asia markets division. This follows an earlier announcement the bank plans to cut 16,000 jobs by year end.
You can add Wells Fargo to the list of big financial institutions to recently come under cyberattack. A spokeswoman for the bank confirmed that customers were having problems logging into the site on Tuesday. JPMorgan Chase and Bank of America experienced similar technical difficulties last week. Investigations are ongoing, but a group called Izz ad-Din al-Qassam Cyber Fighters has claimed responsibility for the attacks in online posts. U.S. Bancorp and PNC Financial are on high alert as the group has indicated in the online posting they will also be targeted.
Here's another strike against the pending Visa-MasterCard swipe fee settlement: the National Restaurant Association became the fifth plaintiff to formally oppose the settlement on Tuesday, saying the current terms and conditions don't adequately address price confusion issues that persist between merchants and networks.
Big Wall Street banks are aiming to have The Jumpstart Our Business Startups Act amended. The settlement, which aimed to "stamp out the conflicts of interest that helped inflate the dotcom bubble," restricts big Wall Street banks from publishing research while raising capital for smaller companies. These firms argue these provisions create "an uneven IPO playing field" and are no longer favored now that the political and economic environment has shifted.
New York Times
This article analyzes the legal fees associated with litigation involving executives from Fannie Mae and Freddie Mac in order to get a better sense of how much the government bailouts of these agencies actually cost taxpayers.
In other pay-my-legal-fee news, a former Goldman Sachs programmer charged in an overturned federal case and a pending state proceeding with stealing valuable computer code from the investment bank is asking that Goldman pay the "nearly $2.4 million in costs" he has incurred as a result of the litigation. Goldman declined to comment on the development.