Receiving Wide Coverage ...
Bloombergs Go Kaput: Add another name to the list of companies deemed systemically important: Bloomberg LP. The financial-data provider's terminals went down in Asia and Europe overnight, or perhaps even worldwide, leading the U.K.'s debt-management office to cancel a scheduled transaction to buy back government debt. The total system failure prompted Louis Gargour, chief investment officer at LNG Capital, to say, "a global outage like this is systemically important to markets all around the world." Other traders and fixed-income bankers who declined to be identified said they couldn't commence planned deals because of the outage. The New York Times quoted traders in Geneva and Hong Kong as saying they couldn't complete deals because of the outage. A Bloomberg company spokeswoman told the Financial Times that it was too early to comment whether the outage was caused by hackers. As of about 7:30 a.m. Eastern time, Bloomberg said in a Twitter message that it had restored service to "most customers."
Wall Street Journal
It looks increasingly likely that the Federal Reserve won't be raising interest rates in June, amid a rash of negative economic news. New housing starts rose only modestly in March. Industrial production fell at a 1% annual rate in the first quarter. U.S. hiring slowed in March. Consumer spending at retail stores is sluggish. Add it all up, and the number of disappointing economic reports compared to the number of positive surprises has been higher in recent months than at any time since June 2009, according to an analysis by Bank of America Merrill Lynch. The data "is giving rise to heightened uncertainty about the track the economy is on," Atlanta Fed President Dennis Lockhart said Thursday in Palm Beach, Fla. Bank executives have already seen the writing on the wall, as several bank CEOs have commented during discussions with analysts they don't expect to see much-needed rate hikes (needed for bank profits, at least) until later this year, certainly sometime after June.
The Federal Reserve has decided to let U.S. banks make limited use of municipal bonds to meet liquidity requirements, unnamed sources said. However, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. do not intend to follow the Fed in allowing this. Wells Fargo, JPMorgan Chase, Citigroup, State Street and Bank of America are the five largest holders, among U.S. banks, of municipal bonds. Large banks have been lobbying U.S. officials for approval to let muni bonds count toward their liquidity holdings.
A former investment adviser at JPMorgan Chase was charged with stealing at least $20 million from his clients and using the funds for his own benefit. Michael Oppenheim was accused of securities fraud and other violations for taking his clients' funds and using them to pay his mortgage and for online trading. His brokerage accounts showed minimal cash balances.
Columnist Martin Sandbu agrees with the fundamental concepts of the new proposals by Sen. Elizabeth Warren, D-Mass., to regulate banking. Warren's main points are these: Banks are still too big to fail and banks shouldn't be allowed to cheat people. Yes, Warren may be a liberal firebrand, but to oppose what she's saying is the equivalent of saying that you are for cheating and you oppose the rule of law, Sandbu said in his "Free Lunch" column.
Newark Star-Ledger: Investors Bancorp's decision to open a branch in a low-income neighborhood of Jersey City, N.J., came about through an effort by city officials, which used the city's banking business as an incentive. Jersey City tried to lure a bank to the Hub shopping center ever since Bank of America closed its office there in 2010. When its first efforts failed, the city issued a contract proposal to link the city's banking business with a promise to open a branch in the Hub neighborhood. It's a type of public-private partnership that other cities can use to bring banks to neighborhoods with large populations of unbanked and underbanked consumers, Jersey City Mayor Steven Fulop and Phyllis Salowe-Kaye, executive director of New Jersey Citizen Action, wrote in an op-ed column.