Receiving Wide Coverage ...
Pushback Against ECB Rules: Last week's World Economic Forum in Davos, Switzerland, gave European bankers unhappy with stricter capital rules a chance to air their grievances. The Financial Times reports bankers in Davos argued that tough capital requirements will render the European Central Bank's quantitative easing less effective. They say the initiatives work at cross-purposes: QE is meant to encourage investors to take on riskier assets that invigorate the economy, while the capital rules incentivize banks to hold safer assets. Meanwhile, the Wall Street Journal reports the eurozone's biggest banks have received letters from their regulator in recent weeks urging them to bolster capital levels beyond the required minimum. "The tougher ECB demands have been the source of grumbling among bank executives gathered [at Davos]," the paper reports. While the ECB has said publicly the big banks under its watch are on steady ground, the letters seem to suggest regulators fear a bad turn could set them wobbling.
Ocwen vs. Investors: Ocwen Financial's faceoff against a group of investors is the latest problem for the troubled subprime mortgage servicer. Investors in mortgage-backed securities serviced by Ocwen argued in a letter Monday the company "had improperly enriched itself, made imprudent loan modifications and failed to maintain adequate records or account for all the funds it was handling for the investors," according to the Journal. Ocwen, on the other hand, says the investors are angry because they want more foreclosures and fewer principal reductions in order to boost the value of the bonds.
Wall Street Journal
The Federal Reserve Monday released its highly anticipated plan to speed up payments in the U.S., calling for a collaborative effort across the payments industry. (You know what that means: task forces aplenty.) American Banker has an in-depth look at the Fed's road map.
Citi Foundation head Pam Flaherty plans to retire this week after almost 50 years at the bank, the paper reports. The article focuses on Flaherty's rise through the glass ceiling during her time at Citi; she previously served as the bank's head of human resources and became the first woman to report directly to the (male) CEO.
Citizens Financial boosted profits 30% in the fourth quarter powered by retail and commercial lending. Zions Bancorp also had a profitable quarter, but the coverage focuses more on the bank's shedding of collateralized debt obligations and its energy lending portfolio.
Standard Chartered is shopping for a new chief executive to replace current head Peter Sands sometime this year, according to anonymice. Sands has come under fire for failing to enact sufficient changes in the aftermath of the bank's 2012 settlement for violating U.S. sanctions, among other criticisms.
New York Times
The latest chapter in the Times' series on subprime auto lending takes a look at investors' growing appetite for bonds backed by loans to riskier borrowers. "Questions are being raised about whether this hot Wall Street market is contributing to a broad loosening of credit standards across the subprime auto industry," the paper reports.
The Securities and Exchange Commission has been slow to enact a Dodd-Frank rule that requires public companies to disclose how much their chief executives earn compared to their workers' median wages. Part of the problem is a lot of variables come into play when calculating median income, writes Andrew Ross Sorkin, and another issue is the SEC's general lack of enthusiasm for the rule itself. "Thus, it appears that when the law is ultimately put into effect, it will be watered down and made so complicated as to be worthless," Sorkin concludes.
"Wall Street has pulled out all the stops in opposing a plan by its own self-regulator to require brokers to share extensive information about their clients' accounts," the paper reports. At issue is the Financial Industry Regulatory Authority's proposal to review monthly data on brokers' dealings in order to better catch bad behavior. The battle is also symptomatic of a widening gulf between Finra and the firms it regulates as Finra toughens its standards, the paper suggests.