Receiving Wide Coverage ...

Up in Arms: French leaders are incensed over demands by U.S. authorities that BNP Paribas pay $10 billion to end a criminal probe of its alleged evading of sanctions by doing business with Sudan and other U.S.-blacklisted nations, the Wall Street Journal, New York Times and Financial Times all reported. "The penalty must be proportional and reasonable," French Foreign Minister Laurent Fabius was quoted as saying on Tuesday. "These figures are not reasonable." BNP Paribas has recruited France's president, François Hollande, to help its cause, the Times reported. French officials are arguing that the fine could hurt Europe's banking sector and the French economy, FT says.

Wall Street Journal

Wells Fargo is cutting back on its offerings of interest-only home equity lines of credit, and more banks may follow suit, including Bank of America and JPMorgan Chase, both of whom told the paper they are considering it. An EVP at Wells Fargo Home Mortgage said, "we'd like to lead the industry to a more responsible product," meaning a product in which borrowers aren't hit with huge spikes in their monthly payments.

Conventional wisdom holds that rising interest rates will eventually help banks by boosting net interest income. A recent Federal Reserve Bank of Chicago study suggests banks shouldn't get too excited, the paper's "Heard on the Street" column says. A 1 percentage point rise in short-term rates generates only 0.003 percentage points in the average net interest margin of banks holdings at least $10 billion in assets.

Financial Times

The FT sheds a tear for the low pay levels of European bank chiefs compared to their U.S. counterparts. Royal Bank of Scotland's chief, Ross McEwan, was paid about only about a fifth of the $20 million paid to Goldman Sachs CEO Lloyd Blankfein. Overall, the pay gap between U.S. and European bank leaders has widened (in favor of the Americans) "despite a positive year for the sector on both sides of the Atlantic," FT says.

Elsewhere ...

Minneapolis Star-Tribune: A slowdown in banking industry revenue has forced U.S. Bancorp to hold off on full-time hiring and to freeze nonessential travel, the Minneapolis Star-Tribune reports. The Minneapolis bank has also cut salaries in one employee group. The paper quotes industry analyst Richard X. Bove as saying all banks are in cutting mode, though he described U.S. Bank's moves as "a little bit shocking. … I don't ever recall any asking employees to take a week of unpaid leave," Bove says.

And, Finally ...

It's almost time for BankThink's annual summer reading list for bankers. If you have a suggestion, please email the title of the book and a few sentences about why you're nominating it to sarah.todd@sourcemedia.com. The deadline for suggestions is today, June 3, at 6 p.m., EST.

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