Receiving Wide Coverage ...
HSBC Discloses Probe During Earnings: HBSC reported a 28% rise in third quarter net profit on Monday largely related to falling loan charges. The bank also became "the latest to admit that it was the subject of an investigation by several authorities into its conduct in the foreign exchange market," Dealbook notes. Per the Journal, "HSBC had not suspended anyone in connection with the probe and ... none of the traders named by regulators still work at the bank." Financial Times
Broadened: A regulatory filing has revealed the government investigation into JPMorgan Chase's hiring practices has "expanded beyond the borders of China." It also revealed the bank is "being questioned about its currency trading by various authorities," which seems to be all the rage these days (see above). Finally, the filing reminded everyone that JPM is still being probed about, among other things, its relationship with Bernie Madoff, its activities in the California and Midwest power markets and mortgage-backed securities claims. Bloomberg
Restructured: Co-operative Bank averted a potential failure on Monday with its $2.39 billion restructuring plan, which cedes control of the beleaguered British bank to institutional investors, including several U.S. hedge funds. (The FT has put together a detailed explainer on how the radical restructuring will affect retail investors: "Thousands will be offered new bonds with a choice of two options: a lower annual payment with a future capital sum, or the continuation of their existing annual payment for 12 years without future capital sum.") Co-op "doesn't expect to make a profit this year or next, 'and can give no assurance that the bank will generate a profit for some years thereafter,'" reports the Journal. Meanwhile, this FT Lombard column concludes: "Students of bailouts will scrutinize the deal for insights on how they may be executed without state intervention. But the clearest lesson is this: the private sector can only be relied on to reboot a failing bank when the government sees it as small enough to fail."
Wall Street Journal
Sen. Lindsay Graham, R-S.C., plans to try to block final votes on several major White House nominees, including Federal Reserve chairman nominee Janet Yellen, "until he is provided access to survivors of the 2012 attacks on U.S. diplomats in Benghazi, Libya."
Data released by the Federal Reserve reveals U.S. big banks "have seen billions of dollars of losses on their vast portfolios of securities reversed following the recent rally in the price of Treasuries and other assets."
Here's a story that will sound familiar to American Banker readers: community banks are getting into the wealth management services business. "Some institutions have ramped up their wealth management divisions in recent months, while others have teamed with existing firms to help clients make sense of their portfolios," the paper reports.