Receiving Wide Coverage ...
Banks Hunt for FIFA Liability: As banks in the U.S. and U.K. face scrutiny over whether they should have flagged transactions tied to the FIFA bribery scandal, some of Britain's largest financial institutions are looking to get ahead of the ball. The Wall Street Journal reports Barclays and HSBC are conducting internal reviews of the payments allegedly used to transfer $150 billion in bribes and kickbacks to soccer officials. The BBC has the same report, but got Standard Chartered and Barclays to confirm internal compliance reviews. While U.S. authorities have yet to accuse any banks of wrongdoing, the Department of Justice said last week it is investigating whether the firms were aware there was something fishy about the payments. The BBC notes HSBC and Standard Chartered are likely to be particularly jumpy about such probes, since they're already in the doghouse with U.S. regulators. (They've paid a collective $3 billion in fines over money-laundering and sanctions violations in the past three years.)
Wall Street Journal
It's looking increasingly likely that Citigroup will deal with its Banamex USA problems by shutting down the California-based unit entirely, anonymice tell the paper. The business, which specializes in facilitating cross-border transactions into Mexico, is the subject of multiple regulatory probes into possible violations of anti-money-laundering rules. Citigroup has reportedly indicated during settlement talks that it's willing to wind down the business. This would be bad news for the innocent customers who face dwindling options to move cross-border payments, as the paper notes. It points out some banks "are retreating from emerging markets in an attempt to dial back their exposure to potential money laundering and other riskseven though that can mean giving up legitimate business and leaving customers frustrated."
Two former Washington Mutual executives are still waiting for their "golden parachutes" to release. The failed bank's former chief operating officer Stephen Rotella and former home-loans unit head David Schneider are asking for $15.7 million and $7.4 million in payments, respectively, as part of a case involving roughly 70 former WaMu employees. The bank trust created to dispense WaMu's remaining assets says the golden parachute agreements are invalid, since they weren't intended to pad the landings of employees who allegedly helped bring about the company's collapse. A court is expected to decide on the matter as early as this week. Both Rotella and Schneider were part of a 2011 settlement with the Federal Deposit Insurance Corp. in which they agreed to hand over the bulk of their windfall payments should they ever receive them; the ex-execs would be left with a mere $4.3 million and $1.6 million. Their plight fails to wring sympathetic tears from Journal readers. "This is the American financial system of heads I win and tails you lose," writes Ed Barry in one representative comment.
Who wants a $40 billion piece of General Electric's commercial-lending business? Anonymice say potential bidders include Toronto-Dominion Bank, CIT Group, Ally Financial and Wells Fargo. The sale is part of GE's larger move to shed the bulk of its financial-services arm in an attempt to scale down and avoid the heightened regulatory scrutiny reserved for the country's largest financial institutions.
JPMorgan Chase head Jamie Dimon is lashing out against shareholders who base their votes on the recommendations of proxy advisors, and the FT says the man has a point. The paper's Jonathan Ford identifies two potential problems that arise when shareholders rely too much on proxy advisors like ISS and Glass Lewis: first, the advisors will fall prey to lobbying efforts by big banks, and second the advisors' opinions on governance at major institutions may be influenced by the fact that some of these same institutions are their clients. This reporter highly doubts Dimon's recent criticisms of proxy advisors stem from these particular concerns. But Ford's larger point is investors would be wise to scrutinize governance issues for themselves rather than blindly following the firms' recommendations.
Nonbank home lenders have edged out banks in their share of the government-backed mortgage market. The paper reports companies like Quicken Loans and loanDepot.com made 53% of government-backed home loans in April, almost double their share from two years ago.
Asset managers Fidelity and BlackRock are taking on the Financial Stability Board. The global regulatory watchdog group is considering making the asset-management industry subject to designation as systemically important institutions and tougher rules. Unsurprisingly, the fund managers say this is a terrible idea.
New York Times
Dodd-Frank's Achilles heel is the sweeping scope and complexity of its reforms, Adam Davidson writes in the magazine section. He says Wall Street banks are attempting to dismantle the law little by little by haggling over the details. A simple, straightforward regulatory regime would be much harder to weaken, he says, although he acknowledges there would be tradeoffs: "The financial system might not perform as efficiently, and the economy might not grow as quickly during boom times." Exactly what these straightforward rules might look like goes unaddressed in the piece.
CBS: Remember when banks were beautiful? CBS News sure does. The outlet takes a look back at the lost era in which banks' classical pillars and coffered ceilings were meant to suggest depositors' money was safe as gold in a castle even when bank failures proved this to be an illusion.