JPM Trying to Settle; Alibaba Fee Bonanza; LIBOR Drama

Receiving Wide Coverage ...

JPMorgan's Settlement Tab Keeps Rising: As more leaks drip out from the JPMorgan Chase settlement talks rumor mill, JPM's price tag keeps rising. JPM had been thought to be readying to pay $1 billion, but the Wall Street Journal reports JPM has offered "about $3 billion" though DOJ officials deem that figure as "billions of dollars too low" and that the final amount "could be larger." The New York Times says JPM will pay between $3 billion and $7 billion; the Washington Post says JPM could pay "in excess of $3 billion"; and the Financial Times hedges, saying in its lead paragraph JPM will pay "over $4 billion," but later in the story reporting that authorities are demanding at least $10 billion just for JPM's mortgage sins. The reports don't clarify which of the litany of JPM probes would be put to bed and whether some civil or criminal cases may remain pending after the settlement. The reports identify multiple federal and state agencies as being involved, including New York State Attorney General Eric Schneiderman and the Federal Housing Finance Agency. The talks may settle the probes into energy markets manipulation and the sale of faulty mortgage-backed securities. In a blatant example of stating the obvious, the Post reports that JPM is "eager to put the investigations to rest," citing an unnamed source. California investigators had planned to announce on Tuesday new civil charges against JPM, but the DOJ told Golden State officials to hold tight, the FT and Post reported. Wall Street Journal, New York Times, Financial Times, Washington Post

Alibaba Loves New York: Morgan Stanley and Credit Suisse are expected to get the nod as lead banks on Alibaba's IPO in New York, now that the Chinese e-commerce company has decided against a listing in Hong Kong, the FT reports. Whichever banks ultimately win the job should receive a boatload of fees, as Alibaba is projected to have a $70 billion market value, the Times says. Financial Times, New York Times

Wall Street Journal

Meanwhile, prosecutors are compiling evidence to support criminal charges against current and ex-employees of the British firm ICAP for alleged manipulation of LIBOR rates, the WSJ reports. The criminal charges come as the firm itself is preparing to settle civil charges by paying "slightly less than $100 million in penalties," the paper said. ICAP, the firm, is not expected to face criminal charges. Also on the LIBOR front, the president of Bank of America Merrill Lynch for Europe, the Middle East and Africa, Alex Wilmot-Sitwell, is said to have received emails from an alleged mastermind of the LIBOR rigging scandal when he worked at UBS.

A federal prosecutor described the quality of loans in the Hustle program at Bank of America's Countrywide unit as "largely a joke" during the civil fraud case, which kicked off on Tuesday. B of A's attorney said no fraud was committed and that Hustle was established only to siphon prime loans to the bank's best customers.

Community banks are seeing an improved market for the foreclosed properties that they still hold on their books after the financial crisis. The CEO of Western Alliance Bancorp in Phoenix cites the rise in commercial real estate values as the prime mover of the positive development. The WSJ also cites the willingness (or stubbornness) of bankers to hang on to distressed properties in the hopes the values would rise. Bankers have refused to sell the properties off cheap and rid themselves of the problem assets.

Financial Times

The European Banking Authority, in a report issued Wednesday, said Europe's 42 largest banks are on track to meet Basel III capital requirements five years ahead of schedule. The EBA, which is Europe's new sole banking regulator, also said average liquidity levels have risen over the past six months, although that's a double-edged sword that the Bank of England has warned could lead to a shutting off of credit.