Receiving Wide Coverage ...
Foiled Comeback: Former New York Governor Eliot Spitzer's hope of staging a political comeback was halted on Tuesday when he lost the Democratic nomination for city comptroller to Scott Stringer, the Manhattan Borough president. The one-time "sheriff of Wall Street" spent more money, but Stringer, as the New York Times describes it, painted Spitzer as a rich man who saw himself as above the law.
Not surprisingly, the prostitution scandal that forced Spitzer's resignation five years ago was a big part of Stringer's campaign. As of Wednesday morning, Stringer was ahead 52.1% to Spitzer's 47.9% with 97% of the precincts reporting. Wall Street Journal, New York Times, Financial Times
Speaking of Former Governors...: Jon Corzine, former MF Global Holdings chief executive, has asked the U.S. District Court in Manhattan to dismiss the charges filed against him in June by the Commodity Futures Trading Commission. Regulators say Corzine, the former governor of New Jersey, bears responsibility for the $1 billion in customer funds that went missing as the brokerage maneuvered to avoid financial collapse. It filed for bankruptcy in 2011. Corzine's attorneys say the regulator "has clung to its baseless presumptions and manufactured charges of wrongdoing that are supposedly connected to Mr. Corzine." The New York Times points out that the CFTC charges are based on a failure to "diligently supervise." Attorneys for Corzine say the CEO of a global firm can't be described as the supervisor of every employee and transaction.Edith O'Brien, the former assistant treasurer of MF, is also asking the court to dismiss the charges brought against her by the CFTC. Wall Street Journal, New York Times
Financial Crash Retrospective: The five-year look back continues, with the Financial Times posting a slideshow filled with pictures of bank lines in the United Kingdom, shell-shocked Wall Street types, dismantled bank signs and stoic bankers. Note the photo of JPMorgan CEO Jamie Dimon, former Morgan Stanley CEO John Mack and Bank of America CEO Brian Moynihan testifying before the Financial Crisis Inquiry Commission. Only Dimon and Mack are name-checked in the caption. That's got to hurt for Moynihan. Meanwhile, the hole that Lehman Brothers' collapse left behind remains, according to the Wall Street Journal. Citing law firm Allen & Overy, the paper reports that activity in areas like capital markets, loans, M&A, project finance and foreign direct investment for the 12 months through mid-August trails the same time period of 2006 and 2007 by 30%. Wall Street Journal, Financial Times
Wall Street Journal
An article looks at the complications of getting the Volcker Rule, which prohibits banks from proprietary trading, implemented. The process has ranged from two-hour debates over the term "market making" to using fried chicken as a way to get policymakers to meetings. Paul Volcker, the former Federal Reserve chairman who initially proposed the rule, called the strung-out process ridiculous, adding there's "no reason why the Volcker rule should take three years."
Volcker's comments are similar to those in American Banker Magazine's July story on Federal Reserve Board Gov. Daniel Tarullo.
The newspaper has a pair of stories based on an interview with Ken Griffin, founder and chief executive of Citadel, a Chicago-based hedge fund. In one, Griffin blasts the megabanks, saying their "span of control is inconceivable." He also says he would have broken them up if he was the Treasury secretary in 2009.In the second story, Griffin praises derivative reforms that redirected activity through central clearing houses. He says the changes have narrowed prices and reduced risk. "This brave new world of Dodd-Frank for 'cleared' derivatives has been fantastic," Griffin says. You read that right, bankers "Dodd-Frank" and "fantastic" in the same sentence.