Receiving Wide Coverage ...
JPMorgasbord: Barry Zubrow, JPMorgan Chase's head of regulatory affairs, is leaving his job before the end of the year, and may or may not stay with the bank in an advisory role, the Journal reports, citing anonymous sources. The article also reveals that Jes Staley, the chairman of JPM's corporate and investment banking unit, was a candidate to run Barclays after the Libor scandal forced the British bank's CEO to step down. (Anthony Jenkins, a long-time Barclays banker, ultimately landed that gig.) Noting that Staley was kicked upstairs during a July executive reshuffling at JPM, and that several other long-time associates of CEO Jamie Dimon have left or been demoted in recent years, the Journal says, "The prospect of additional movement at the top levels of J.P. Morgan underscores how much change is occurring at a bank that has been known for unity and continuity." The new Vanity Fair profile of Dimon plumbs the implications of the turnover, among other things. "Very few of the Dimon loyalists are still at his side at JPMorgan Chase. … But with Dimon, loyalty is not a formula for job security. 'It isn't,' he admits, 'because then you're being disloyal to the company. If you aren't performing anymore, it's time to make a change.'" Magazine writers William D. Cohan and Bethany McLean paint a rich portrait of Dimon that is well worth reading. (Fun facts we either didn't previously know or must have forgotten: During his 18-month hiatus between being fired at Citigroup and taking the reins at Bank One, Dimon was a contender to lead Home Depot; after he lured several Citi executives to Bank One, his former mentor Sandy Weill threatened to sue.) And this is no puff piece. The article recounts JPMorgan's legal issues in various businesses (mortgages, securities, energy trading, credit card collections, munis) and the familiar but salient details of the London Whale debacle. The big question is whether JPMorgan is too big to manage, even for the most capable and perspicacious of managers. "How did one of the most anal, numbers-oriented C.E.O.'s on Wall Street allow a bunch of traders in London to make such a huge, concentrated—and losing—bet and not know about it until it was too late? It is a conundrum. … Because of JPMorgan's size it was able to distort the market, not just briefly but for months. And Dimon didn't notice any of it." And speaking of long-form narratives of the Whale tale: In case you missed it in yesterday's Scan, check out the New York Times Magazine's profile of Ina Drew, JPMorgan's former chief investment officer.
There's No 'I' in QE3: Federal Reserve officials were nearly unanimous at the mid-September policy meeting that the new bond-buying program was necessary, despite misgivings some had about "how it might complicate monetary policy in the future," the minutes released Thursday showed. New York Times, Washington Post
Derivative Discord: The FHFA wanted Fannie and Freddie to start issuing by now a credit derivative-ish new type of mortgage security called "risk-sharing bonds." But the plan's been held up because the synthetic-y elements of these deals would probably subject them to oversight by the CFTC under Dodd-Frank, the Journal reports. Another story in the paper says Scott O'Malia, one of five commissioners on the CFTC, is sympathetic to banks' concerns about the agency's new rule requiring that all swap trades be cleared within "a few minutes." He tells the paper he wants "a 'complete, open discussion' of the maximum time allowed" and that a CFTC staffer overstepped his authority by telling swap market participants two minutes was the outside limit.
Wall Street Journal
Citigroup is getting high marks for responding quickly to customer queries sent via Twitter, and resolving their issues without sending them to a branch or call center, the paper reports. A Journal reader is skeptical, writing in the comment thread: "Seems like this service only worked out well because not a lot of people use it relative to the amount of employees Citibank has working social media. What happens when millions of people start using twitter for customer service? Everyone will get the same 40 minute holds and bad customer service that they previously got on the phone."
The Systemic Risk Council, a private group of former senior regulators led by former FDIC chief Sheila Bair, wants active regulators to require a more stringent leverage ratio for U.S. banks than what Basel III calls for.
New York Times
A "DealBook" article questions Mitt Romney's assertion during the first presidential debate that Dodd-Frank was "the biggest kiss that's been given to New York banks I've ever seen." Although many have argued that the SIFI designation enshrines too-big-to-fail status on large banks, the classification "comes with heightened capital requirements and regulatory scrutiny."
Editor's Note: The Morning Scan will not publish on Monday, Columbus Day. We'll be back on Tuesday, Oct. 9.