Receiving Wide Coverage ...
More Morgan: Elephants indeed. Republicans on Capitol Hill have never forgotten that JPMorgan funneled the majority of its political donations to the Democrats in the 2008 campaign season, and though the firm has since stepped up its Republican giving, GOP lawmakers' patience with Dimon & Co. is wearing thin, the Wall Street Journal reports. Aside from the sour grapes, some Republicans worry that their efforts to roll back new financial regulations were made moot by JPMorgan's massive trading loss. "The argument that Volcker was absurd was building—greatly—and then this happened," says as unnamed Republican on the House Financial Services panel. … The Financial Times suggests that the JPM fallout will direct regulators' attention to the whole concept of portfolio hedging by banks (just in case the regulators needed a little extra nudging here). … The FT also has anointed the next likely successor to Dimon: he's 41-year-old Matt Zames, Ina Drew's replacement as head of the bank's chief investment office, and Dimon says he's the kind of fellow you'd want to share a foxhole with. … Also in the FT, JPM has retained the services of WilmerHale attorney William McLucas, a former director of enforcement at the Securities and Exchange Commission. … Over at the New York Times, the continued fallout over the JPM loss made for a good occasion to reconsider the raison d'être for big banks. The analysis piece argues that the financial industry's direct contribution to the broader economy is overstated, because the primary output measurement is based on the interest they charge for credit — something that has a habit of increasing when appetite for yield leads to increased risk-taking. … And Washington Post opinion writer Dana Milbank, reporting on Tuesday's appearance by Commodity Futures Trading Commission head Gary Gensler and other regulators before the Senate Banking Committee, says that JPM earned a "healthy dividend" on the $20 million it has spent on lobbying and campaign contributions in the past three years. He argues it's the regulators, not JPM executives, who are taking the heat from politicians over the firm's big trading loss.
Regulating Prepaid: The Consumer Financial Protection Bureau on Wednesday will announce that it plans to issue the first federal regulations governing the business of reloadable prepaid cards, with plans to develop standards for fee disclosures and fraud protection. The Wall Street Journal reports that the agency also may force issuers to alert consumers as to whether funds loaded on the card are insured by the FDIC or not. According to the New York Times, the CFPB also will hold a hearing Wednesday, in Durham, N.C., inviting testimony from big players in the card industry, as well as consumer advocates.
With Friends Like These: Morgan Stanley and other handlers on Facebook's initial public offering continued to catch flak as the press continued to pick apart the share sale. The Wall Street Journal suggests it was the last-minute decision to increase the share offering that doomed the deal. The FT, reporting on the subpoena Morgan Stanley received from the top securities regulator in Massachusetts, officially designates Facebook a "botched IPO," owing not just to the sinking share price, the questions about Morgan Stanley's communications to clients regarding its Facebook revenue forecasts in advance of the share sale, but also software problems at Nasdaq that caused a technical glitch in Facebook's market debut. A similar breakdown can be found in Dealbook, which reports that regulators "are concerned that banks may have shared information with certain clients, rather than broadly with investors."
Wall Street Journal
Over at the American Securitization Forum conference in Washington, Martin Gruenberg, acting director of the Federal Deposit Insurance Corp., was pulled aside by the press and asked whether the new rules around too-big-to-fail would really allow the agency to wind down a firm like … oh, let's just say JPMorgan, if the bank were to grow weak enough to pose a systemic risk. "Yes, I think we have the authority to manage that," he told the Journal.
Commerzbank AG is still 25 percent-owned by the German government, but CEO Martin Blessing said Wednesday at the firm's annual meeting that the Frankfurt-based bank hopes to resume paying a dividend for the 2013 business year. It hasn't distributed a shareholder payout since 2008.
Barclays has put its Italian branches on the block, and has thus far attracted three letters of interest in a deal, which, according to an unnamed source, would involve the equivalent of $5.13 billion in loans and another $5.13 billion in deposits.
Credit Agricole, still deeply regretting its 2006 purchase of Emporiki Bank of Greece, is looking for emergency loans again from—wait for it—the Greek central bank.