Receiving Wide Coverage ...
Fed Staff Violates Rules: It's not just the banks, folks, it's also the regulators. The Federal Reserve's inspector general says the Fed violated its own rules when a staff member inadvertently emailed minutes from a March policy meeting a day early. Oops. The email went to 150 people including some of the biggest banks and investment firms on Wall Street plus congressional staffers. The IG says the Fed failed to provide sufficient training to employees handling confidential information. Wall Street Journal, New York Times
Deal Reached with the Swiss: Swiss banks will pay billions in fines and disclose information about American tax cheats in a landmark settlement in which the Swiss government caved to pressure from U.S. regulators. The Times says the deal calls for "stiff measures" that will "lift the veil of Swiss secrecy." The deal does not cover the 14 Swiss banks and branches of international banks in Switzerland including Credit Suisse and Julius Baer that are already under criminal investigations by the Justice Department. The FT says these "category two" banks will have to pay fines depending on how many undeclared U.S. clients they had. New York Times, Financial Times
JPM's China Chicanery: The New York Times describes how JPMorgan's "Sons and Daughters" program became the focus of a federal bribery investigation. Readers are led to believe the hiring of children of well-connected families in China originally began as a way "to weed out nepotism and avoid bribery charges in the U.S." This follows Thursday's Journal article, reported in Scan, that cuts to the chase by identifying the son of Everbright Group's chairman, and the daughter of a railway official as the people U.S. regulators believe may have helped JPMorgan Chase win deals. Wall Street Journal, New York Times
Wall Street Journal
General Electric is getting ready to spin off its U.S. consumer finance business, which issues credit cards to 55 million Americans. An initial public offering could come early next year but regulatory hurdles likely would prevent most large banks from being buyers.
Indonesia, Brazil and Turkey are among the emerging markets that raised interest rates to stop the exodus of cash.
A new leading indicator of the resurgence of U.S. banking appears to be the dearth of bank failures. The Federal Deposit Insurance Corp. is not as engaged as it once was in the "Friday night scramble," to announce bank closings. This year, the 20th bank failure came in August whereas last year it came in February.
The banking industry notched another record for profit in the second quarter, with the FDIC saying banks netted $42.2 billion in earnings, up 23% from a year earlier, the Washington Post reported. American Banker readers are cautioned about an alarming figure in the FDIC's otherwise glowing report a $51 billion drop in unrealized gains for available-for-sale securities in the second quarter, the biggest decline on record. The concern is that banks are searching for yield, taking undue risks in the low interest-rate environment.