Wall Street Journal
BNP Paribas pleaded guilty in 2014 to breaking U.S. sanctions against Sudan, Iran, Cuba and other countries listed as state sponsors of terrorism. So it seems to make sense that victims of terrorist attacks should receive a share of BNP's $9 billion fine. The matter of how to determine which victims deserve a portion of the funds is proving to be a knottier question. Groups including survivors of the 1979 Iran hostage crisis and victims of the U.S. embassy bombings in Kenya and Tanzania in 1998 are petitioning U.S. authorities for a share of the fine. How to distribute the money is up to the discretion of the Justice Department, which said on May 1 that it plans to conduct a study into the matter. That approach has angered victims who know how long government studies can take.
Quicken Loans wants to show the government it's no pushover. The paper takes a look at the mortgage lender which this spring sought to fight off government charges that it had defrauded taxpayers by preemptively filing a lawsuit of its own against the Justice Department. Quicken is accused of submitting half of a billion dollars' worth of ineligible mortgages for government insurance between 2007 and March 2015. But the company says the government used evidence selectively in order to build its case, all with the goal of extracting a nine-figure settlement. As several commenters note, the article doesn't provide much context to help readers determine the merits of either case. But we do learn that Quicken's offices have an indoor basketball court fitting décor, given that its founder and chairman is Cleveland Cavaliers owner Dan Gilbert.
Nathaniel Popper's Bitcoin book Digital Gold gets a lukewarm review from David Kushner, who thinks the book has too wide a cast of characters and relies on a humdrum digital paper trail to drive its narrative. Kushner's most intrigued by the Silk Road saga, which may be indicative of his generally skeptical perspective on Bitcoin: he writes that "despite the best efforts of those trying to transform money, the digital cash system is beginning to resemble the old one."
Big banks may be ready dip their toes back into deal-making waters, according to John Carney of "Heard on the Street." He predicts that acquisitions of fintech companies, advisory businesses, payment processors and treasury services firms could heat up as banks look for ways to tap into more fee income. But banks will have to choose wisely in order to avoid triggering higher capital requirements and other regulatory issues.
Bank of America may be able to breathe a little easier in light of a court ruling in favor of Deutsche Bank last week. A New York court relieved Deutsche of responsibility for mortgage-bond repurchase demands, finding that investors had waited too long to file the claims. That's good news for BofA, which faces repurchase claims for $27.8 billion worth of loans.
Former Federal Reserve official Jim Kudlinski proposes that the central bank adopt a "first, do no harm" approach to setting monetary policy.
Why waste time hunting for squirrels when you can go after big game? That appears to be the guiding principle among regulators in the U.S., U.K. and Hong Kong, who brought bigger fines and fewer cases against financial firms in 2014 compared to the year before. The paper suggests this strategy may be flawed, given the evidence that fines alone are ineffective in preventing bad behavior.
Credit Suisse chief Brady Dougan may be on the way out, but he has few regrets. At his last annual meeting, Dougan defended the bank's performance throughout the financial crisis and its efforts to scale down.
The Financial Industry Regulatory Authority plans to meet with leaders from banks and asset managers to discuss possible fixes to liquidity problems in bond markets, according to anonymice. One controversial proposal "is introducing delayed reporting requirements when trading big blocks of debt, a move that would run counter to the trend towards increased transparency in financial markets." This idea was already ruffling feathers in the comment section, particularly since smaller asset managers need transparent markets in order to remain competitive with larger players.
Rejoice for the dawn of a new era in banking, declares the paper's Patrick Jenkins. He cheers recent leadership changes at Deutsche Bank and Standard Chartered that usher in "workmanlike bosses who have been drafted in to fix banks broken either by the crisis or by the new post-crisis rule books." And he's particularly upbeat about the U.K. government's plans to sell off its stake in Royal Bank of Scotland and to collaborate with the financial industry in designing the Fair and Effective Markets Review. These moves have big implications for the U.S. too, he suggests, since the U.K. is influential in shaping international regulatory approaches.
New York Times
Lee Siegel's recent op-ed urging struggling student-loan borrowers to follow his lead and default on their debt has stirred up plenty of controversy particularly his claim that defaulting really isn't so bad. It certainly seems to have turned out okay for Siegel, who has an Ivy League pedigree and a spouse who bought his home. But "Your Money" columnist Robert Neubecker suggests that most folks won't be so lucky, pointing out that borrowers in default can have their credit cards canceled and wages and Social Security checks garnished. The column appears sympathetic to Siegel's criticisms of the rising cost of college education, but argues that borrowers who emulate his tactics could find themselves in even deeper trouble. On the other hand, reader Edwin Duncan responds that "the ramifications of paying off a $1500 a month student-loan debt for years and years are also real and lasting."
More workers are reaching retirement age without paying off their mortgage, the paper reports. That's not necessarily a disaster, but it can put people in financially precarious positions.
Wall Street is shedding jobs, and the government needs to take action to bolster the financial sector's health, according to Partnership for New York City president Kathryn S. Wylde.
The paper's editorial board urges the Consumer Financial Protection Bureau to use its newly established authority over nonbank auto lenders to crack down on predatory lending.