Friday, September 30

Receiving Wide Coverage ...

Eurozone Crisis, Chapter 42: German Chancellor Angela Merkel mustered a political victory by winning approval of the expansion of the European bailout mechanism in a parliamentary vote that would have passed on the stregth of her coalition's support alone. The Times said Slovakia "is the only remaining wild card" in a process that requires the assent of all 17 European Union countries. But even though the paper predicted that opponents in Slovakia would cave under pressure from the rest of the bloc, a fraught road lies ahead to secure the further amplification of the European Financial Stablitity Facility that many analysts believe is necessary to resolve the crisis. The Journal said, "As deputies emerged from the assembly in the Reichstag in central Berlin, a number of lawmakers predicted Ms. Merkel would have to ask parliament for more money soon." Wall Street Journal, New York Times, Washington Post

In the Journal, an article noted that a sale of Deutsche Bank bonds broke "a nearly three-month drought in the European market for unsecured bank debt. … Yet the premium Deutsche Bank paid for the loans — twice the rate it offered in February — suggests that market anxiety remains high." Another article covered "a fairly upbeat" view Santander's chief executive offered about the company's prospects. "Brazil last year became the biggest contributor to its bottom line." Channelling Liaquat Ahamed in "Brussels Beat," Stephen Findler wondered whether a solution is institutionally and politically feasible despite warnings over the consequences of a breakup of the Eurozone that "suggest it is an outcome that rational policy makers would seek to avoid." "Heard on the Street" said Greece should push forward with the deal it reached over bondholder haircuts in July, even though it "will almost certainly need further debt relief."

An analysis piece in the Times recapped the challenges to finding a decisive fix for the crisis.

The Automatic Debit Card: Bank of America Corp. plans to debit the accounts of standard checking customers $5 for each month they use their debit cards to make purchases, a salient shift among a wave of fee and rewards program changes set off by new consumer regulations. The industry said that one can only expect this sort of thing when "Congress got involved in price fixing." Senator Richard Durbin, whose ancestors presciently named themselves for the provision of the Dodd-Frank Act that limits the amount merchants can be charged to accept debit card payments, said B of A "is trying to find new ways to pad their profits by sticking it to its customers." Wall Street Journal, New York Times, Washington Post

Wall Street Journal

"In a major shift from the agency's traditional enforcement strategy, the SEC could file more civil cases in which defendants are accused of negligence only, rather than harder-to-prove charges of intentional wrongdoing or recklessness, according to SEC officials."

The paper surveyed analyses that "Operation Twist could in some ways do as much — or more — for the bond market than its predecessor, known as QE2."

An update on the search by UBS for a new chief executive said an unnamed source told the paper that the Swiss banking company has contacted former JPMorgan Chase executive Bill Winters.

Rick Perry is apparently getting treated pretty ugly up on Wall Street. The paper reported, "Some bankers say they would prefer a more moderate candidate, and worry the Texas governor's style and stances on social issues could sink him in the general election."

Lehman and B of A reached an agreement over derivatives claims in a key step toward the approval of Lehman's "creditor-payback plan."

Talks are underway over the creation of a joint venture that would "combine stock-market icons such as the Dow Jones Industrial Average and S&P 500."

New York Times

Indian lenders are giving new meaning to the term "mobile banking" with cadres of roving tellers who use laptops and wireless modems to pay housecalls to customers in rural areas.

In "High & Low Finance," Floyd Norris weighed a Hungarian law that allows borrowers to repay mortgages denominated in foreign currencies at a discounted exchange rate. "The move has outraged the financial establishment of Europe. It represents a serious breach to the patterns followed in much of the world since the financial crisis burst open three years ago. Banks have lost a lot of money, and been bailed out, but bank executives have done quite well. Those who lent money to banks have generally gotten all their money back. Customers by and large have been forced to bear the brunt of their behavior, whether or not there was evidence the banks had misled them."

Is Basel III "anti-American" or, rather, should we just rename them the "freedom" capital and liquidity rules, and just call it a day? The paper convened a panel of experts to discuss the issue in a "Room for Debate" segment.

Feel what it's like to sit in Jamie Dimon's throne. A Danish art group collaborating with the nonprofit Creative Time has installed a replica of the executive bathroom at JPMorgan Chase headquarters in a Greek diner on the Lower East Side.

We missed an item from Wednesday's paper that covered transparency in banking from an architectural perspective. Preservationists are fighting the renovation of a Modernist landmark that was completed in 1954 to serve as a Manny Hanny branch. Instead of a traditional granite temple, the building was a "luminous box with an unbroken glass façade." The owner, Vornado (rhymes with "tomato") Realty Trust, is making changes to iconic features including a pair of escalators and the vault. One architect said that "the building is one of the most transparent in New York," but it should be noted that it is no longer a bank office.