Receiving Wide Coverage ...
Tarullo, in Private: As planned, major bank CEOs laid out their concerns about the recent stress tests, proposed counterparty exposure limits, and other regulatory issues to Federal Reserve Governor Daniel Tarullo in a closed-door meeting in New York. The FT says the meeting was "relatively calm," unlike the one last year in which JPMorgan Chase's Jamie Dimon reportedly chewed out Bank of Canada chief Mark Carney. "The banks came away hoping for some concessions from the Fed," the paper says. The Journal has a slightly different take, saying the concerns about new rules were "met with silence," though the article notes that the Fed is not allowed to comment on proposed regulations. "At least one CEO went in with low expectations and emerged from the meeting with a lukewarm view of the event," the Journal says. The Fed itself issued a statement saying Tarullo told the bankers that "their comments would be considered together with all other comments and feedback received from other interested parties," which could either be read as a polite way of blowing them off or taken at face value. Wall Street Journal, Financial Times
Tarullo in Public: The Fed governor also gave a speech earlier in the day in which he expressed concerns about the systemic risks posed by the tri-party repo market, and more broadly that regulatory reform efforts could be losing steam. Bankers may find encouragement from another part of his speech, in which he said the Basel committee should relax parts of the international liquidity rules, warning that during rough patches they could have the pro-cyclical effect of forcing banks to hoard cash. Wall Street Journal, Financial Times, Washington Post.
Wall Street Journal
The Mariana Islands, a U.S. territory in the Pacific, has the dubious distinction of the having nation’s first public pension fund to seek bankruptcy protection. Some affected retirees blame bad investment advice from Bank of America’s Merrill Lynch for the fund’s collapse.
The U.S. Treasury has indefinitely delayed a decision on whether to issue floating-rate notes. But if it ever does sell such paper, it probably won’t use LIBOR as the benchmark. That scandal-ridden index was conspicuously absent from the list of options the department asked market participants to consider.
Goldman Sachs lost a money management client that objected to the firm's support for same-sex marriage, CEO Lloyd Blankfein said at an event run by Out on the Street, a group of gay activists who work in finance. "I won't say the name [of the client] but if you heard the name it wouldn't surprise you," Blankfein said. The event was held at Bank of America's main office in New York, and B of A's CEO Brian Moynihan also appeared and told the audience his company was a tolerant workplace: "You can come in, be yourself, be successful, be all you want to be."
New York Times
The Volcker rule “is on track for completion sooner than some bankers had expected,” the Times reports. “Some officials expected to complete it by September and possibly as early as this summer,” the paper says, citing anonymous sources who throw in some weasel words for insurance (they “cautioned that regulators have not set a firm date for completing the rule”). “Summer” would mean not that far off from the statutory deadline of July 21 that regulators have publicly said they were likely to miss. (Reminder: the agencies said a few weeks ago that banks would have two years to get into full compliance with the Volcker rule.)