Receiving Wide Coverage ...
Goldman Off the Hook: The Justice Department has decided it will not charge Goldman Sachs (or any of its employees) with financial crimes related to the mortgage crisis. Neither, apparently, will the Securities and Exchange Commission, as Goldman Sachs announced separately the SEC had informed it an investigation into a $1.3 billion subprime mortgage deal had come to an action-less end. The Justice Department said there was not enough evidence to file charges. According to the Journal, the department also said "protecting the integrity of our banking system" remains a "top priority."
The Times called these disclosures "the latest indication" federal investigations related to the 2008 financial crisis were "petering out as the deadline to file cases approached." Goldman says it is happy with the decisions. The public may not be. Government regulators have come under fire lately for failing to file charges against financial firms that may have played a role in the 2008 crisis.
Barclays' New Boss: The beleaguered British bank has named David Walker, a well-known London executive and corporate governance expert, as its next chairman. The 72-year-old Walker, who has served as assistant secretary at the U.K. Treasury and executive director at the Bank of England, will join Barclays' board in September and officially take over for outgoing chairman Marcus Agius in November. Early reactions to the personnel change have been positive. According to the Journal, Walker's "government and regulatory background" make him well-suited to the laborious (not Libor-ous) task of revamping the bank's image. Walker is known for conducting government-mandated reviews of the U.K's financial services industry following the financial crisis as well as for his dislike of fat executive pay packages.
The Times says his "first major task" as chairman will be recruiting a successor for ousted chief executive Robert Diamond. The FT says Walker's prior investment bank experience makes it less crucial for prospective CEOs to come with that particular background. We're fairly certain "the manipulation of benchmark interest rates" will also be missing from the chosen candidate's skill set.
Libor Overhaul: The Financial Services Authority, a U.K. watchdog tasked with looking into how the country can rebound from the London interbank offered rate scandal, believes a dramatic overhaul to the existing system is in order. According to the FT, Martin Wheatley, head of conduct regulation for the FSA, will be unveiling a discussion paper today that recommends Libor be scrapped altogether and replaced with a borrowing rate based on actual trades. This rate would be governed by an independent body, not the British Bankers' Association. The paper also suggests introducing criminal sanctions regarding Libor manipulations.
Wall Street Journal
Knight Capital wants everyone to know it's doing just fine, following its near-demise at the hands of a rogue computer program. Chief Executive Thomas Joyce says the brokerage firm, which lost a good deal of business after the glitch, will be "close to 100% within a week" as it works hard to recoup $440 million in trading losses.
New York Times
The Square-Starbucks deal, while intriguing, isn't exactly an indicator that mobile payments are set to replace existing payment methods. Companies offering mobile payments still need to convince people that paying with a phone is just as secure as paying with cash or a card. There are also some facets of the Square-Starbucks partnership that may make future Square-merchant alliances difficult to forge. For instance, other retailers may be turned off by Starbucks CEO Howard Schultz's presence on Square's board, since he will have direct influence over the developing payment system.
The email version of Thursday's Scan drew an incorrect inference about Starbucks' partnership with Square. The coffee chain will be lowering its payment processing costs, according to the Journal's All Things D blog. But Square's main selling point for most merchants is simplicity, for which Square charges a premium.