Receiving Wide Coverage ...
A Little Something for Dimon Withdrawal: Feeling bereft now that the shooting has died down in the tabloid war over the House of JPMorgan Chase? Jamie Dimon may not really "want any more press," but the press isn't quite cooperating. In "Current Account" in the Journal, Francesco Guerrera offered a homily about how Dimon should think about succession and board expertise after his victory in retaining the chairmanship. In "Fair Game" in the Sunday Times, Gretchen Morgenson highlighted a real estate investment trust that appointed a former trustee to fill "the vacancy created by his resignation" after the majority of shares voted against him this month. (Most of the column was about a fight over board diversity at Urban Outfitters.)
Small Step for Spain, Pretty Big Deal for Bank M&A: Bankia, the nationalized Spanish bank, has agreed to sell City National Bank of Florida to a Chilean bank for about $900 million. One of the predecessor companies that now make up Bankia paid $927 million for City National in 2008, and subsequently had to inject about $500 million into the American unit during the housing bust. American Banker, Wall Street Journal
Wall Street Journal
Neither Lloyds nor RBS will be issuing fresh capital even though the Bank of England said there was a huge hole in the country's banks just a few months ago, and the Journal ran a longish article about how this came to be. The most recent standoff marks a denouement of a feud that stretches back to 2008, according to the paper, and has pitted hardline positions adopted by Bank of England Governor Mervyn King against the banks and the U.K. Treasury, and the outrages of banker bonuses against the expansion of credit and the fragile British economy. There is also context for RBS's decision to float a minority stake in Citizens Financial in Rhode Island, which "will have a negligible impact on RBS's key capital ratios." King is retiring in a few weeks, to be succeeded by Bank of Canada Governor Mark Carney.
Meanwhile, the paper reported that European banks are beginning to draw down reserves at central banks. The move away from "crisis footing" is raising red flags for some bankers and investors who still harbor concerns about the health of Europe's banks and its financial system.
The Securities and Exchange Commission is "shuffling" enforcement resources as "the volume of crisis-related cases ebbs," and putting greater focus on accounting fraud.
Optimism over the strength of the housing recovery is prompting some investors to make bets on manufacturers of appliances and building materials, and regional bank stocks. Also, house flipping is making a comeback. "In California, the number of homes sold in recent months that had been flipped or bought and resold within six months has reached the highest levels since late 2005."
The IRS has asked for information about American clients at Swiss private bank Julius Baer.
"Heard on the Street" observed that prices for credit default swaps on B of A and Citi have fallen to the lowest levels in at least five years, and that the spread over insurance against JPMorgan Chase has almost vanished. Still, JPMorgan maintains a strong lead in its price-to-tangible-book multiple.
Competition for corporate loans is apparent in the resurgence of covenant-lite deals, which have "soared to more than 50 per cent of all leveraged loan issuance so far this year, twice the level seen during the credit boom in 2007." For more on the feeble hands of creditors in the market, check out these articles in American Banker on commercial and industrial yields at major banks and weakening protection against early refinancing.
An article warned about the ongoing threat of Libor-related litigation despite recent court successes for major banks.
"Lex" said that "US distressed debt funds are setting up shop in Europe as they seek to repeat the gains they made on US bank assets. There is plenty for them to buy."
New York Times
President Obama is gearing up to nominate three judges at the same time to fill vacancies on United States Court of Appeals for the District of Columbia Circuit. This important court, which has "a strongly conservative flavor," recently ruled against Obama's recess appointments to the National Labor Relations Board, a decision that has reverberated in the fight over confirming Richard Cordray to lead the Consumer Financial Protection Bureau.