Receiving Wide Coverage ...
More Doubts Around Dimon's Dual Role: Another day, another round of worrisome headlines for JPMorgan Chase's Jamie Dimon. Major proxy firm Glass, Lewis and Co. has come out in favor of a shareholder's proposal that would split Dimon's dual role as CEO and chairman. Scan readers will recall that yesterday, the Journal reported three of JPM's largest shareholders BlackRock, Vanguard Group and Fidelity Investments "remain undecided" as to how they will vote and over the weekend, news broke that shareholder advisory firm Institutional Shareholder Services supported splitting up the roles. "I write a lot about how snowflakes trigger avalanches," tweeted "Currency Wars" author Jim Rickards. "The dump Jamie Dimon movement [is] starting to look like a blizzard." It remains unclear whether a majority of shareholders will actually vote to take away Dimon's chairman title. According to the Journal, Dimon told investors this week that he wants to keep both jobs, but most of the campaigning, thus far, has been left to other executives and directors. It's also unclear what will happen if the vote doesn't go Dimon's way. "The bank's board of directors does not want an independent chairman, but it seems unlikely they would ignore a majority vote to split the chairman and CEO roles during a time of heightened sensitivity of corporate governance matters and increasing criticism about America's big banks," this Forbes blog notes. There's also been speculation that Dimon might resign if the shareholders do go against him. At the very least, "while not binding, a majority vote to have a separate chairman and chief executive would be a heavy blow to the influential banker," this Dealbook article notes. The vote is set to take place May 21.
Wall Street Journal
Americans are beginning to borrow again, according to this article, which suggests everything from consumer credit to home equity loans to "subprime" car loans are showing signs of life. "The improved access to credit in recent months suggests America's economic outlook is gradually brightening, despite recent hurdles like federal budget cutbacks, increased payroll taxes and troubled overseas markets," the article notes.
Financial Times
Earnings indicate that European banks, collectively, remain works in progress. "This is still a sector being forced into cost cuts by weak revenue generation," the Lex column notes.
New York Times
SEC chairman Mary Jo White asked Congress for a bigger budget for the agency on Tuesday in order "to complete an overhaul of financial regulation and to keep a closer eye on Wall Street fraud."
A California judge has disagreed with Bank of America's argument that AIG has no right to sue the bank for losses suffered on (you guessed it) mortgage securities since the insurer sold the securities to the Federal Reserve Bank of New York in 2008. The judge's finding paved the way for a $7 billion AIG suit against B of A and "may also be bad news for other banks that sold troubled mortgage securities to the insurer."
New York regulator Benjamin Lawsky, at the urging of New York Governor Andrew Cuomo, is investigating pension-advance firms. Lawsky's Department of Financial Services will look into "whether the companies have flouted state usury laws and whether the loans violate a federal law that restricts how military pensions can be used." It will also investigate whether lenders are masking high interest rates to dupe retirees into signing up for the advances.
Washington Post
The House passed six bills yesterday that would weaken Dodd-Frank reforms in the derivatives market. The bill package is expected to die in the Senate, but "opponents have grown worried that individual measures could be tucked into broader pieces of legislation that would be difficult to defeat."
A new report argues that high levels of homeownership are tied to unemployment. "The authors find that higher levels of homeownership in a state appear to be associated with lower levels of labor mobility, higher commute times and fewer new businesses created," reporter Brad Plumer explains. "Taken together, those three factors tend to increase the unemployment rate."
