Receiving Wide Coverage ...
Fed Watch: The Federal Open Market Committee meets today and tomorrow, and will weigh whether to take additional steps to juice the economy, given the threat of contagion from Europe and general uncertainty about domestic growth. A lengthy front-page story in the Journal says a “credit divide” has prevented millions of Americans with blemished payment histories from taking advantage of the Fed’s low interest rate policies. Nearly 90% of new mortgages, for example, now go to households with credit scores of 700 or higher, versus a nearly 50-50 split between that group and the below-700 club in early 2007. “The problem for the Fed is that the pipes in the financial system through which its easy money travels are clogged,” the story says. And Roto-Rooting ain’t the central bank’s job. Wall Street Journal, New York Times
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Skeletons on Display: Today the Consumer Financial Protection Bureau will unveil a public, searchable database of complaints people have lodged against credit card issuers, including details such as company names. It’s certainly a refreshing contrast to the “consumer protection” efforts of the prudential banking regulators, which often seemed like they were more focused on protecting the banks (think of federal preemption, or the OCC consumer assistance help line that until 2004 was open just eight hours a day for four days a week). But we’ve read enough Yahoo message boards and similar anybody-can-allege-anything forums to wonder if the pendulum is now swinging too far in the other direction. As one Journal reader wrote in the comment thread: “Nice idea, but...it would be nicer if the cranks were left out. You know the ones who want it all their own way, and don't think that they're supposed to live up to their part of the agreement with the credit card company.” Then again, you could view this database as a leveling of the playing field. In response to the banks that oppose publicly identifying companies in the complaints on the grounds that they could be “unfounded or inaccurate,” a Post reader asks, “You mean, like, credit score reports?” Wall Street Journal, Washington Post
Another @#$%&*! JPMorgan Hearing: After last week’s Dimon overdose, some Morning Scan readers complained of JPM fatigue, and frankly we feel the same way. We get that for many people working in financial services, the issues facing a global investment/commercial banking mash-up in New York don’t have the same day-to-day resonance (as one community banker wryly commented on BankThink last year, “with Basel, we make pesto, our hedges we trim weekly and our derivatives, I’m Tom instead of Thomas”). So we’re going to try to keep this section mercifully short. Here goes … Today Jamie Dimon will appear before the House Financial Services Committee. The Times says he’s going to “stick to the script” from his appearance before the equivalent Senate panel last week. The paper also notes that this time he’ll be joined by representatives from his bank’s regulators. (You can find prepared testimony for Dimon and the other witnesses here.) The Journal suggests the questions will be tougher this time, the House being the less decorous chamber of Congress. (American Banker’s Washington bureau chief, Rob Blackwell, is among those hoping for a less sycophantic performance by lawmakers.) Another Journal story profiles Bruno Iksil, the “London Whale” whose bungled trades have kept JPMorgan in the spotlight for the last month a half, and his boss Achilles Macris. Iksil comes off as either an artful dodger or a snob: “When he wanted to avoid questions from supervisors about his trades, he sometimes would start discussing a mathematical term, equation or other technical jargon, to confuse and end the conversation,” but an anonymous colleague explains that "he wasn't trying to evade, he sometimes just didn't have patience if it was his trading idea.” And a former colleague of Macris sounds like he’s talking about some Scandinavian death-metal band when he calls the man “aggressive, fast, and a bit brutal.” Iksil and Macris are still working at JPMorgan, but “are expected to leave,” the article says, and notably the Journal’s attempts to reach the traders were relayed through their personal lawyers. Lastly, the Times’ always thoughtful Peter Eavis questions whether the new Volcker and Basel rules for banks would have prevented Iksil’s apparently speculative trading, had the regulations been in effect. OK, that was still way to too much JPMorgan for one morning. Next!
Baer in Talks with B of A: Julius Baer, the Swiss private bank, is in talks to buy the non-U.S. wealth-management business of Merrill Lynch from Bank of America, the papers report. B of A has reportedly been looking to sell this business for a couple months. According to the Journal, Washington’s crackdown on tax havens is squeezing Swiss banks’ margins, forcing them to find ways to bolster profits. So sometimes public policy can have unintended consequences that work in (U.S.) banks’ favor! Wall Street Journal, Financial Times
