Receiving Wide Coverage ...
Dodd-Frank, Five Years Later: On the five-year anniversary of Dodd-Frank, Barney Frank and Christopher Dodd sat down for a Q&A session. Dodd said he thinks Too Big to Fail is dead, in part because regulators are forced to "sit down together" at least four times a year to study the landscape. (In an interview with the Financial Times, Frank is adamant TBTF is dead and he disagrees with Sen. Elizabeth Warren's plan to re-implement a version of Glass-Steagall, to separate investment banks from traditional banks.) In a separate question, Dodd said the most significant part of the law is the Financial Stability Oversight Council, while Frank's answer to the same question was "substantially diminishing the number of loans that are made for residential mortgages that should not have been made." Frank also defended the law against Republican doomsayers who predicted it would wound financial institutions and cripple the American economy. The Journal asked which part of the law would they change, if they could. Dodd didn't offer a specific suggestion, while Frank said it would be the decision by regulators not to impose risk retention on all residential mortgages; and also he would have merged the Securities and Exchange Commission with the Commodity Futures Trading Commission. On its op-ed page, the Journal gives Rep. Jeb Hensarling, R-Texas, an opportunity to comment on the five-year anniversary and his verdict, not surprisingly, is it's a failure. Hensarling said TBTF is not dead, the biggest banks have gotten bigger, community banks have dwindled in number and the financial system is less stable. And oh by the way, the economy is still "in the doldrums," Hensarling said. The Journal also offers up a bit of fun to commemorate Dodd-Frank's anniversary: an online quiz testing your knowledge of the Consumer Financial Protection Bureau. In the multiple-choice quiz, Ralph Nader is one of the possible answers to the question "Who did President Obama choose as the first director of the new agency?"
Wall Street Journal
Several metro areas have seen a return to bidding wars for home buyers, as the lack of available housing pushes up the price of homes. Cities that have seen outbreaks of bidding wars include both San Francisco-Oakland and San Jose, Calif., Seattle, Denver and Dallas, according to the National Association of Realtors' Realtor.com. Several factors have led to the dwindling home supply, including the slower-than-expected rebound in homebuilding. Many small and mid-sized homebuilders are having trouble obtaining financing. Outstanding loans by banks and thrifts for home construction is still well below its 2008 peak, even though the figure has risen from its nadir, according to the Federal Deposit Insurance Corp. Other factors include: many people who would like to sell their homes aren't listing them because they believe they wouldn't qualify for a new mortgage; and there are still many homeowners underwater on their mortgages, which prevents them from selling. Growth in housing prices in many of the markets with bidding wars (though not all) has outpaced the national growth average.
The failure of law firm Dewey & LeBoeuf, and its subsequent messy litigation, has prompted many law firms to cut back on bank loans. Akin Gump Strauss Hauer & Feld rid itself of all bank debt soon after the Dewey collapse. Debt levels have fallen at many firms nationwide, according to Citigroup and Wells Fargo. Law firms use debt primarily to pay partners ahead of the receipt of expected revenue, as well as to pay for the expansion of the firm into new cities or the opening of new offices in existing markets.
A group of 15 investment banks and money managers have banded together to back an instant-messaging service which they hope will reduce their reliance on the Bloomberg terminal service, which costs about $20,000 yearly per terminal. In addition to its terminals' high cost, Bloomberg has had some high-profile missteps recently including a global outage, and the revelation that some Bloomberg news reporters were spying on bank employees via their terminals. Banks supporting the rival messenger, which is called Symphony, include Bank of America, Bank of New York Mellon, Citigroup, HSBC, JPMorgan Chase and Wells Fargo. Executives at many of these banks believe the Bloomberg terminal has become little more than a messaging service and that's something they can easily recreate.
New York Times
Fannie Mae and Freddie Mac have recovered from the financial crisis and are back to their old ways expanding into business lines where they have no business, their executives taking outsized risks and overspending on lobbying, Bethany McLean, co-author of The Smartest Guys in the Room, writes in an op-ed column. Then there's the fact the government sweeps the profits of Fannie and Freddie into the Treasury, where they are used as a slush fund for general government spending. Fannie and Freddie shouldn't be killed off, as their essential mission, to provide liquidity for homeownership, is still needed and desired. But the government-sponsored enterprises should be reformed, McLean writes.
The Times (U.K.): Barclays plans to cut more than 30,000 jobs in the next two years, unnamed sources told The Times. The move would be the first major step by new CEO John McFarlane, after Antony Jenkins was fired earlier this month. Neither the Wall Street Journal nor the Financial Times had confirmed the story as of Monday morning.
The Coin Telegraph: The Bitcoin news site lists 10 banks that are taking close look at how to use blockchain technology in their business operations. Santander Bank has found it could cut up to $20 billion in expenses using blockchain. Banco Bilbao Vizcaya Argentaria, the holding company for BBVA Compass, was an investor in the $75 million venture-capital round for Coinbase. Barclays formed a unit to invest seed money in blockchain startups. BNY Mellon is trying to integrate Bitcoin's peer-to-peer payments model into its client-server system, and it also introduced its own virtual currency for its employees.