Receiving Wide Coverage ...
JPMorgan Chase's Deal: Over the weekend the country's largest financial institution reached a tentative $13 billion settlement with the Justice Department over the bank's questionable mortgage practices. But despite the record penalty, the bank's board is standing firmly behind its chief executive Jamie Dimon, whose role in negotiating the settlement only seemed to cement the board's support. A phone call by Dimon to a top deputy of Attorney General Eric Holder ahead of a planned news conference by the Justice Department helped to spur the record deal, according to accounts by those involved with the negotiations. Despite the tentative deal, the Justice Department could continue to pursue a potential more serious criminal probe into JPMorgan, the Journal reports. The two continue to battle whether the bank must admit wrongdoing in the settlement, the paper says. The monumental fine is unlikely to faze investors though, if finalized. JPMorgan will likely make the case it had been prepared for this given the $9.5 billion charge it took in the third quarter for litigation expense. Helping matters, the banks also disclosed it had a $23 billion legal reserve on hand. The editorial board calls the Morgan settlement a "watershed moment in American capitalism." Not everyone backs the government in this fight, however, as many on Wall Street believe the government pulled off a shakedown with the implicit threat of criminal prosecution, the FT says.
UBS Tax Probe: The former No. 3 official at UBS, Raoul Weil, was arrested in Italy, according to U.S. officials. The U.S. intends to extradite him to face charges of helping Americans citizens evade taxes. The former Swiss banker was indicted in the U.S. in 2008 for allegedly helping American clients with $20 billion in assets evade U.S. taxes. Wall Street Journal, Financial Times
The Federal Housing Finance Agency wants an even bigger penalty against Bank of America, one that could exceed $6 billion, more than the $4 billion JPMorgan would pay in the tentative $13 billion settlement.
New York Times
The top trader of Norway's sovereign wealth fund, Oyvind G. Schanke, says long-term investors including his $750 billion fund and asset managers in the U.S. "representing American retirement savers" have not seen reduced trading costs from the technological advances and the costs imposed to implement the systems "are not discussed."
European banks are set to be scrutinized this week as the reins of supervision are handed over European Central Bank's financial stability unit. The success of the "financial triage" could boost confidence in Europe's banking system. Failure could "undermine Europe's fragile economic recovery and credibility of the Euopean unity project."