Receiving Wide Coverage ...
Debt for Sale: Get it while it's cheap. Banks are selling bonds in the U.S. at a record pace, thanks to low rates and emerging confidence in the banking sector, the Journal said. Comerica has sold a total of $600 million in bonds this year, the Dallas bank's first bond sales in almost four years. Synchrony Financial, the credit card business spun off from General Electric, JPMorgan Chase and Bank of America are among the other U.S. banks and banking companies conducting bond sales; European and Asian banks have also gotten in on the act. An additional factor prompting the bond sales is the likelihood that regulators will require banks to boost capital ratios. Indeed China's second and third largest banks sold a total of $8 billion in bonds Friday in advance of stricter capital requirements, FT reported.
The Latest Hack: Supervalu, the seventh largest U.S. supermarket chain, reported a possible data breach at more than 1,000 stores. Hackers appear to have installed malicious software onto Supervalu's point-of-sale network in late June or early July. As of Thursday night, it wasn't known how many customers' accounts were affected or what type of customer data, such as credit card or debit card account information, was stolen. "We have had no evidence of any misuse of any customer data," Supervalu CEO Sam Duncan said in a statement.
Wall Street Journal
Car loans are rising up the pop charts, while home loans are down in the dumps, according to the New York Fed's quarterly Household Debt and Credit report (a report that also includes data on the rise of subprime auto lending, which American Banker reported on extensively Thursday). Auto lenders made $101 billion of new loans in the second quarter, the highest amount since the third quarter of 2006. Meanwhile, new mortgage loans made in the quarter fell to their lowest level since 2000. Total outstanding household debt fell between April and June, the first decline after three consecutive quarterly increases.
The deferred compensation portion of banks' expanded regulatory framework is tied up in delays, as the six separate regulatory agencies involved squabble with each other. The Securities and Exchange Commission was blamed for putting off action "partly because of concerns about a cost-benefit analysis of the rule," designed to prevent excessive risk-taking by executives. Others have blamed the Office of the Comptroller of the Currency. The head of Americans for Financial Reform told the FT, "CEOs need to know that they face consequences for their bad behaviour." It's one of several regulatory proposals that have gotten bogged down in Washington, all ahead of crucial upcoming deadlines.
Goldman Sachs is launching an instant-messaging service to compete with Bloomberg's service. The messaging product is designed for Wall Street traders. The paper reports Goldman is asking companies to "invest" $5 million to $6 million each in the system.
New York Times
Upcoming rules to require banks to report expected loan losses as soon as the loans are made could limit the availability of credit, Floyd Norris writes in a column. A possible unintended consequence of the so-called expected loss mode is that bankers may try to manipulate earnings by making fewer loans, or none at all. Norris interviewed International Accounting Standards Board Chairman Han Hoogervorst and discussed the American proposal on reporting expected loan losses versus the European model.
More retailers have begun accepting bitcoin as payment, but the virtual currency has been slow to gain popularity among consumers. Bitcoin offers one big benefit to retailers: lower processing fees. It also helps retailers seem "edgy" because they're early adopters of the new currency. Consumers, however, get few, if any benefits, by paying with bitcoin and thus online purchases with bitcoin have not grown as a category.
A former HSBC banker in Buffalo, N.Y. decides to enter the world of debt collection, but finds it's not all it's cracked up to be, according to a lengthy New York Times magazine story.