Breaking News This Morning ...
Bank of America agreed to sell its $8.6 billion Canadian credit card portfolio to Toronto-Dominion Bank. Terms were not disclosed. This was the third sale of international credit-card portfolios by the bank this year. It still plans to sell its U.K. and Ireland credit card operations.
Wall Street Journal
Harvard's Jeremy Stein and Columbia University's Richard Clarida, an executive vice president at Pimco, appear to be the White House's leading candidates for the two open seats on the Federal Reserve Board.
While few banks currently offer direct-deposit advance loans, several have signaled interest in starting to make them, squeezing the payday loan industry, which has fallen on hard times due to federal regulation.
Credit Suisse will pay about $1 million for auction-rate securities violations in Massachusetts. As part of the agreement with the state, the bank will buy back auction-rate securities from Massachusetts investors, while neither admitting nor denying any wrongdoing.
First National Bank of Olathe failed last week, and Enterprise Bank & Trust will take over the bank. It was the 64th bank failure this year, and the first of the year in Kansas.
The Fed's release of its senior loan officer survey this week will give an indication of loan demand, according to the "ahead of the Tape" column. The paper suggests that lending remained easy in the quarter and demand picked up.
New York Times
The Fed's decision to keep rates at near-zero for two years may not do much to spur consumer borrowing, Moody's Analytics economist Mark Zandi said. "I don't think lenders are going to be interested in extending a lot of debt in this environment. Nor do I think households are going to be interested in taking on a lot of debt," he said. Consumers remain very worried about their current debt loads — consider that applications for new mortgages this year hit a 10-year low, according to the Mortgage Bankers Association.
Outgoing Kansas City Fed President Thomas Hoenig said large banks should be broken up. "Extremely powerful institutions, both financially and politically, undermine the long-term strength of our system and make us look like a financial oligarchy," Hoenig said. Gretchen Morgensen opines that Hoenig was unpopular on multiple occasions with dire predictions about the banking industry during his tenure, but he's repeatedly been proven right.
As President Obama considers his next move in attacking the economic crisis, congressional Democrats are pushing the White House to help homeowners who are facing foreclosure.
A story painted Geithner and Bernanke as "crisis fighters" and put forth the thesis that the two "battle-hardened and more experienced, now have little more than the power of persuasion." Geithner is constrained by Congress, Bernanke has "exhausted the Fed's usual tools …and is facing new opposition from members of the Fed's policymaking committee." Both have lost important senior staff members. And the European leaders aren't really listening to them.