Receiving Wide Coverage ...
A Patient Fed: When analyzing the Federal Reserve's statements about its timeline for raising short-term interest rates, it helps to have practiced close reading in college. The Fed said Wednesday it plans to be "patient" in adjusting monetary policy, which "means the central bank isn't likely to raise rates at its next two policy meetings," the Wall Street Journal reports. In other words, a rate hike wouldn't come until June at the earliest. The papers are fairly united in their discussion of how decelerating inflation is influencing the Fed's timing. Market reaction to the Fed statement suggests investors think low inflation will put a rate hike on the back burner until at least the fall, a "Heard on the Street" column notes. The New York Times places a greater emphasis on wage growth as a factor in the Fed's thinking than the other outlets. The Financial Times offers a handy explainer.
All Things Basel: The Basel Committee's newly issued risk disclosure standards "will force banks to use new, more consistent and detailed models in their financial reporting" starting at the end of 2016, the FT reports. BankThink contributor Mayra Rodriguez Valladares tells the paper that increased transparency, "like the sun, is the best disinfectant." Both the Basel Committee and Valladares make a separate appearance in the Times, as the financial regulations expert analyzes the committee's regulation agenda for 2015. The news looks good, according to Valladares: the committee appears ready to crack down on banks for treating sovereign bonds as risk-free assets and to encourage financial institutions to invest more in their technology systems and employees.
Silk Road Update: The trial of Ross Ulbricht, the man accused of being the mastermind behind the online black market bazaar Silk Road, continues to generate noteworthy moments. The Times describes how emoticons have emerged as an unusual source of evidence in the trial. Because smiley faces and other symbols can add inflection to chats and text messages, the judge has instructed prosecutors to note emoticons as they read such messages aloud. The FT offers a more general overview of developments in the trial, including testimony that Ulbricht used multiple aliases and had nine fake driver's licenses. For those who need a refresher on the relationship between Silk Road and financial news, Bitcoin was the currency of choice on the site.
Wall Street Journal
Standard Chartered chief Peter Sands is losing support from key shareholders as well as some senior executives within the bank, the paper reports. Outside experts are also calling for a change at the top: "You need a fresh set of eyes to deal with a different world," an analyst tells the paper.
A federal judge gave Fannie Mae and Freddie Mac investors the green light on Wednesday to proceed with a lawsuit against the government. The plaintiffs, including Fairholme Funds, dispute the legality of the government "sweep" of nearly all of Fannie and Freddie's profits.
Financial Times
"A bundle of peer-to-peer consumer loans has been given a credit rating by Moody's, the first time a major rating agency has evaluated a securitization deal created by the fast-growing 'P2P' lending industry," the paper reports. The credit rating will likely pave the way for bankers to invest in such securitizations, the paper suggests. The loans in question were originated through Prosper.
In related news, Goldman Sachs and Société Générale may get in on the peer-to-peer action by backing Aztec Money, according to anonymice. Aztec Money allows commercial finance companies to gain financing by auctioning their invoices to investors.
New York Times
Dealbook's Jesse Eisinger takes aim at the rent-to-own industry, arguing "the product exploits consumers' lack of financial savvy." His larger argument is private housing finance options may be less efficient and affordable than responsible government products. Federal Housing Finance Agency Director Mel Watt also seems to be taking this position, he suggests.
Bitcoin exchange Coinbase "appears to be operating without the proper licenses" in New York and California, the paper reports. New York's top financial watchdog Benjamin Lawsky is working with Coinbase on licensing, according to his office. The paper suggests "any tension between Coinbase and regulators could set back carefully orchestrated efforts in the industry to improve Bitcoin's reputation with the authorities after earlier thefts and scandals."
Elsewhere ...
Los Angeles Times: OneWest Bank chief Joseph Otting came up with an unusual response to protests against the lender's planned merger with CIT Group. In an effort to prove the merger has broad community support and speed up regulatory approval, Otting used an email campaign to solicit 1,900 letters supporting the deal. "The tactic bewildered analysts, who thought that a [public-benefit] hearing wasn't a big deal and wouldn't delay the approval process much," the Los Angeles Times reports.
