Receiving Wide Coverage ...
Fed's Mixed Message: The Federal Reserve sent a "garbled message" about the fate of its QE3 program on Wednesday. First, Chairman Ben Bernanke endorsed ongoing stimulus efforts while testifying at a congressional hearing, though he did reveal the central bank could begin to slow down bond-buying in its "next few meetings," labor market conditions permitting. Then, just hours later, April meeting minutes revealed some Fed officials were hoping to pare down the program as early as June. Markets spiked, and then tumbled as a result of the information, illustrating "the communications challenge facing the Fed as it ponders the next steps for its historic stimulus efforts," the Washington Post reports. Now that the dust has settled, some analysts are predicting the slowdown which, Bernanke noted was different than a complete wind-down of the program, since the Fed could always raise purchases if the economic outlook worsens will begin in a few months, most likely around September. Several news outlets cite this statement William C. Dudley, president of the Federal Reserve Bank of New York, made on Bloomberg TV as evidence of this scenario: "I think three or four months from now you'll have a much better sense of is the economy healthy enough to overcome the fiscal drag or not." Wall Street Journal, Bloomberg
Dimon Vote Post-Script: Now that Jamie Dimon has handily survived a shareholder vote that would have stripped him of his dual role as CEO and chairman, the JPMorgan Chase exec plans to beef up compliance controls, make nice with regulators and build business, unnamed sources tell Dealbook. The article also cites an email Dimon sent to JPM employees, following the vote: "There has been a lot of talk around this topic over the past few weeks, and in some cases, it was distracting. In spite of that, you stood tall and maintained your focus on the business and did the job we are all here to do." In other JPM news, U.K. regulators have fined the bank $4.7 million for problems in its wealth management division, including "not keeping client files up to date and failing to notify customers of the suitability of financial products," Dealbook also reports. Meanwhile, the Journal cites the Dimon vote as a sign that proxy adviser influence is waning. (Scan readers will recall two major advisory firms, Institutional Shareholder Services and Glass, Lewis & Co., recommended shareholders vote to take Dimon's chairman title away.) "Companies eager to head off 'no' votes are more aggressively dispatching top executives and board members to court investors and argue against ISS's and Glass Lewis's recommendations," the article notes, and some large investment firms have moved to analyzing their options in-house.
Departure at Morgan Stanley: Ken deRegt, Morgan Stanley's head of fixed income, will leave the firm in June. He will be succeeded by Michael Heaney and Robert Rooney, who will co-head the unit. deRegt plans to join Canarsie Capital Group as a partner. The Journal notes this is the second major executive move for Morgan Stanley in the past few months with investment banking chief Paul Taubman having resigned in November. Dealbook notes deRegt's departure "puts a spotlight back on Morgan Stanley's fixed-income division, which the Wall Street firm has been aggressively shrinking since the financial crisis."
Wall Street Journal
The Financial Industry Regulatory Authority is adding two stock exchanges that cater to high-speed traders to its oversight in an attempt to "to keep pace with rapidly changing markets and highlight its desire to take a more aggressive stance against wrongdoers."
New York Times
Economists Simon Johnson and Marc Jarsulic in an op-ed tell how the orderly liquidation powers established by Dodd-Frank aren't likely to preclude the U.S. from ultimately saving a big bank set to fail. "Federal authorities have promised not to come to the rescue of large failing financial companies, but they still have more than enough permissible lending authority to do just that," the authors write. "And if that authority proves insufficient to the task, they will have every reason to expand it."
Iowa Attorney General Tom Miller praised Bank of America "for providing $27.9 billion in consumer relief under the national mortgage settlement." The accolade comes at the same time that New York Attorney General Eric Schneiderman is taking steps to sue the bank and Wells Fargo for alleged violations of the settlement.