Receiving Wide Coverage ...
Whale Inquest: Ina Drew, JPMorgan's former chief investment officer, and Doug Braunstein, its former chief financial officer, will testify about the London Whale trading loss before Senator Carl Levin's investigations subcommittee Friday. It will be Drew's first public appearance since the trading losses were disclosed last year. Notably absent from the witness list: Jamie Dimon. Incidentally, the CEO turned 57 on Wednesday, prompting the Times' DealBook to remind readers that five years ago Dimon's birthday celebration at a Greek restaurant was interrupted by an urgent phone call about Bear Stearns … an anecdote staler than week-old pita bread.
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Regulatory Rows: You know that plot device in TV police procedurals where detectives from neighboring precincts argue over who should get the "collar"? This story in the Journal is kind of like a trans-Atlantic, white-collar version of that — with the U.S. Department of Justice and its U.K. counterpart quarreling like rival station houses over the alleged perp, a former UBS trader viewed as "a ringleader" in the Libor-manipulation scandal.…Also in today's Journal: a fly-on-the-wall account of sparring between the Fed and Ally Financial over the regulator's math in the recent Dodd-Frank stress test. Executives at the former GMAC seethed after the Fed found that Ally (which came in at the bottom of the class of 18 banks) would suffer much steeper losses in a stressed scenario than the company's estimates.
TBTF: Here are some letters to the editor about the recent Journal op-ed coauthored by Dallas Fed President Richard Fisher proposing ways to shrink the too-big-to-fail banks. The correspondents include ICBA's Cam Fine and the ABA's Frank Keating, who, you may have guessed, take different views on the plan. Over at the Times' "Economix" blog, Simon Johnson happily reports that the political tide is turning against big banks.
Wall Street Journal
Citi, Capital One and Wells Fargo "will broaden their clawback policies to cover more executives, increase disclosures or add potential triggers" in a concession to New York Comptroller John Liu, who manages pension funds that hold big stakes in the banks. Goldman Sachs, Morgan Stanley and JPMorgan previously made similar agreements with Liu.
The return to profitability at Fannie Mae and Freddie Mac "makes it more likely that their present limbo status as effectively nationalized banks—originally intended as temporary—will be prolonged," laments op-ed writer George Melloan. The cash Fannie and Freddie now generate for the Treasury during a budget crisis weakens the impetus to resolve their conservatorship. But in the long term, having taxpayers take most of the credit risk in mortgages creates another "house of cards," Melloan warns.
Elsewhere ...
Reuters: "U.S. to let spy agencies scour Americans' finances" — Currently, intelligence agencies like the CIA and NSA have to make case-by-case requests to FinCEN for information from its database of SARs filed by banks. But a proposal under development at the Treasury would give the spies the "full access" already enjoyed by the FBI, Reuters reports. A privacy watchdog says the plan "raises concerns as to whether people could find their information in a file as a potential terrorist suspect without having the appropriate predicate for that and find themselves potentially falsely accused." Told ya.
