Receiving Wide Coverage ...
Not So Fast My Friend: Both the Wall Street Journal's "Heard on the Street" column and the Financial Times's "Lex" column caution bank investors to not get their hopes up after the boffo Republican showing in this year's elections. The costs of reeling in some of the bank-reform laws deemed most egregious by GOP leaders are likely too high. The FT notes any gifts to the financial industry will likely go to smaller banks first. "Big banks may be hoping for a shiny package in the form of a rewrite of the Dodd-Frank financial reforms," the "Lex" column says. But Sen. Richard Shelby may have his eye on the systemically important financial institution designation, which would help regionals, such as KeyCorp and Comerica.
Wall Street Journal
As if relations between the U.S. and Russia weren't already strained. Here's another way to put it: If you think U.S. banking regulators weren't already overly concerned about the Bank Secrecy Act and anti-money laundering regulations ... the Journal reports on an investigation into whether a Vladimir Putin friend and political supporter laundered money using the U.S. financial system. Russian oil billionaire Gennady Timchenko is the target of the probe by the Justice Department and federal prosecutors in Brooklyn. The article doesn't get into the details of which banks might have been used as conduits, or how the financial system was used. But the suggestion that U.S. banks were utilized should be enough to raise red flags throughout bank compliance departments.
Bank office managers better purchase larger coffee pots for their break rooms. New York state's top bank cop wants to expand his use of independent bank monitors. Benjamin Lawsky told the paper he wants more independent compliance specialists in order to prevent bad behavior. Previously, the monitors had been installed at banks already deemed to have done something wrong. If Lawsky gets his wish, the independent monitors will join the "100 or more on-site examiners from an array of regulators" that are already stationed at the largest banks. The new monitors will primarily be looking at wait for it "high-risk" international transactions that might raise questions of money laundering.
The Fed finalized its rule on concentration limits, one of Dodd-Frank's mandates. As of Dec. 31, 2013, total financial sector liabilities were estimated at $18 trillion, so the 10% concentration limit for banks would be $1.8 trillion. JP Morgan Chase is closest to the ceiling at $1.4 trillion in liabilities.
Citigroup's auction of its retail unit in Japan is drawing interest from three large Japanese banks: Shinsei Bank , Sumitomo Mitsui Banking Corp. and Sumitomo Mitsui Trust Bank. Citi hopes to wrap up the auction by the end of the year.
R.I.P. Gordon Tullock: The prominent economist, who pioneered public choice theory, died Tuesday at the age of 92. Obituaries have been sparse, probably because the media's been focused on the election, which would be ironic since Tullock believed voting doesn't matter. Washington Post, Marginal Revolution, Reason Daily Telegraph (second item in column)