Receiving Wide Coverage ...
Lawsky Strikes Again: Benjamin Lawsky has certainly had a busy week. The New York state regulator followed up his $10 million Deloitte settlement with a $250 million settlement with Bank of Tokyo-Mitsubishi UFJ over money-laundering allegations on Thursday. True to form, the settlement upstages an $8.5 million fine the Japanese bank paid to federal regulators last December. (Scan readers will recall that last year, Lawsky reached a $340 million money-laundering settlement with the U.K.'s Standard Chartered last August. The move preceded a $330 million settlement with federal agencies in December.) In the Bank of Tokyo settlement, "the disparity stemmed partly from the wider latitude that Mr. Lawsky has to dole out punishments on the banking industry," Dealbook explains. "The Treasury Department is somewhat hamstrung by a quirk in federal law that permitted certain transactions with Iran until 2008." Law quirks aside, Lawsky's latest action, which could unsettle regulators globally, has drawn ire from those on Wall Street and in Washington. "The contrast reinforces the perception that the feds are going light on large financial institutions, and that Lawsky is out to fill the vacuum where he can using New York state laws," argues Bloomberg columnist Jonathan Weil, following up an earlier op-ed entitled "World Needs More Hardheads Like Benjamin Lawsky." And New York magazine's Kevin Roose offered this more diplomatic assessment of New York's rebel regulator, prior to the Bank of Tokyo settlement: "There's a bit of populist grandstanding in Lawsky's approach, of course But for years, many of the regulators who are supposed to be enforcing the law on Wall Street have been lulled into inaction by their fear of doing the wrong thing. And, in that context, Lawsky's hard-headed crusade for justice makes him one of the most fascinating people around." Financial Times, Wall Street Journal
Housing Market Watch: Existing home sales and prices "continue to surge," the Washington Post reports, "the latest reflection of renewed strength in the housing market." But the Times posits that "the great American mortgage sale" may be coming to an end as rates on home loans start to slowly inch up. "The recent move upward in mortgage rates signals the beginning of a longer-term trend of higher borrowing costs for homebuyers, which had reached lows not seen in decades," the article notes.
Wall Street Journal
Charges read in a London court yesterday accused former UBS and Citigroup trader Thomas Hayes of conspiring with employees at eight financial firms, "a sign authorities have their sights on an array of banks and brokerages." Among those on the list: JPMorgan Chase, Deutsche Bank, HSBC, Royal Bank of Scotland and Dutch lender Rabobank.
The FT's Lex column offers this advice to those keeping an eye on U.S. bank stocks: "It is wrong to fixate on rate movements Banks also hedge and they can reposition themselves, too the Fed's future tapering has been well telegraphed. And many other factors affect bank earnings and share price performance."
New York Times
Benjamin Lawsky's not the only one with his eye on bank consultants. Sen. Sherrod Brown, D-Ohio, (of Brown-Vitter TBTF bill fame) is urging regulators to adopt guidelines "this afternoon" in order to better control the multibillion industry. "Without written guidelines and transparent processes, it is impossible to ensure the integrity of a system that relies upon consultants paid by banks to report on their regulatory compliance," Brown writes in a letter to the Federal Reserve and the Office of the Comptroller of the Currency, a draft of which Dealbook received. A spokeswoman for the Fed tells the publication it plans to respond, while a spokesman for the OCC says the agency is working on a set of guidelines.
Young people are forgoing credit cards, a new FICO analysis shows. "In some metropolitan markets, there have been reports of young consumers forgoing driving altogether, and their use of debt to buy automobiles is lower, too," the Times' Bucks Blog notes.
The Supreme Court sided with American Express on Thursday when it ruled that retailers were "bound by an agreement to handle disputes through individual arbitration, even if banding together in class action was the only way to make such a challenge economically feasible."