Receiving Wide Coverage ...
Ring Fenced: Credit Suisse has begun to wall off its Swiss banking business from riskier investment banking operations in the U.S. and U.K. in order to address regulators' concerns over "too big to fail." The plan includes combining two London subsidiaries and transferring its U.S. derivatives business to its U.S. subsidiary. (The unit currently operates out of London.) UBS similarly announced plans to ring fence its banking operations last month. Wall Street Journal, New York Times, Financial Times
JPM Deal, the Morning After the Morning After: News outlets continue to debate the winners and the losers of JPMorgan Chase's $13 billion settlement with federal authorities over mortgage-backed securities allegations. Dealbook outlines where exactly the $13 billion will go, while columnist Peter J. Henning argues out that the true accountability in the settlement is "a separate provision requiring JPMorgan to help those harmed by the collapse of the mortgage market: homeowners struggling to pay mortgages that often exceed the value of their home." The Washington Post's Danielle Douglass calls the deal a "bittersweet victory" for the Federal Deposit Insurance Corp. since JPM has made clear that it will still push for the regulator to absorb Washington Mutual liabilities. Meanwhile, Heard on the Street columnist David Reilly acknowledges that JPM's acknowledgment (see what we did there?) of the statement of facts accompanying the lawsuit are simply an attempt to avoid potential investor civil suits over similar allegations. "Companies always try to minimize their liability when striking settlements," he writes. "But JPMorgan's linguistic acrobatics show the continued threat private litigation could pose."
QE Update: The Federal Reserve released its October policy meeting minutes Wednesday, meaning it's time for pundits to once again debate when/how the central bank's ongoing stimulus program will end. The Journal outlines what appears to be the Fed's preferred modus operandi "The economy will improve enough in the months ahead to justify pulling back on the program After the program ends, they will continue to hold short-term interest rates near zero as the unemployment rate which was 7.3% last month slowly declines over the next few years." - but also points out that the central bank is considering other stimulus options, in case the job market doesn't improve. "The Fed is seeking ways of emphasizing that it remains determined to keep borrowing costs for businesses and consumers as low as possible well into the future," Binyamin Appelbaum of the Times concurs. He adds, "Most officials were open to the idea of encouraging bank lending by reducing the interest rate on funds that banks keep on deposit with the central bank."
Wall Street Journal
The White House says it views a sale or recapitalization of mortgage giants Fannie Mae and Freddie Mac as "a nonstarter because it wouldn't address their central role in mortgage finance." The remarks follow Fairholme Capital Management LLC's proposal to buy parts of Fannie and Freddie from the government, though the White House did not discuss that offer specifically.
This article takes a look at some of the "Bitcoin wannabes" including Litecoin, Worldcoin and BBQcoin that have spawned from the current virtual currency craze caused by the more popular cryptocurrency. "Many of them likely won't succeed and will ultimately be worthless," one analyst tells the paper.
Commercial mortgage-backed securities issuance "has remained robust despite mortgage rates that are as much as one percentage point higher than they were in the early spring."
New York Times
How's this for a NYT headline? "In Obama's Pick to Lead a Financial Regulator, an Enigma." The paper is talking about Timothy Massad, the president's nominee to lead the Commodity Futures Trading Commission. "Perhaps most important, especially for confirmation hearings in this hyperpartisan era, he is a phantom," columnist Jesse Eisenger writes. "Even friends of his whom I spoke with don't know his views on regulation of derivatives, the signature issue facing the trading commission as it puts Dodd-Frank rules into effect." You can check out consultant Mayra Rodríguez Valladares' recent BankThink on Massad for an argument on why his derivatives views wouldn't necessarily make or break his chairmanship.
Goldman Sachs, JPMorgan Chase "and other financial services firms that tend to have high effective tax rates" would benefit from a Senate plan to overhaul the system for taxing multinational corporations.