Receiving Wide Coverage ...
Serious Ex-Im Waves: Geez, when's the last time the Export-Import Bank of the United States was in all the morning headlines? The charter of the government provider of loan guarantees and other support to promote trade expires this fall, and some Republican lawmakers including some on the rise, like House Majority Leader-to-be Kevin McCarthy are threatening to not renew it because they see it as corporate welfare. The Wall Street Journal story says the threat is "stirring alarm among business groups," such as the U.S. Chamber of Commerce and the National Association of Manufacturers. "Shutting down the U.S. Ex-Im Bank is good for business and creates thousands of jobs in China, Russia and France," reads one ad from a pro-bank aerospace group. The Washington Post focuses on how House Speaker John Boehner hedged when asked about the issue. He said he would consult with Republican colleagues on the "controversial subject" and decide his position later; that's "a notable departure from his previous support for reauthorizing the bank," the Post says. As if on cue, a U.S. Ex-Im Bank report to Congress warns that the agency is losing competitiveness against other countries, such as China, that heavily subsidize trade, according to the Financial Times. An editorial in the New York Times defended the bank, calling some of the attacks on it "Tea Party mischief" and arguing that "a truly serious crackdown on corporate welfare would involve eliminating corporate tax breaks and wasteful subsidies." Meanwhile, an American Banker story points out how much banks of all sizes rely on the Ex-Im Bank and looks ahead to a House Financial Services Committee hearing Wednesday.
Different Takes on Housing Numbers: New home sales soared nearly 19% in May from the previous month, but that "simply put the market back on track to match last year's overall pace," a Journal story says. Yet it was the strongest reading since 2008 and the biggest one-month gain in more than two decades, the Post points out in more upbeat fashion. Which only leads to a conversation on where prices are ... Another Journal item noted that the nervous among us shouldn't be worrying about a new bubble in home values yet, except maybe in California, the home of eight of 10 of the most overvalued U.S. housing markets. The "Upshot" column in the Times generally agreed about the overall trend, saying it's a "good thing" that the rise in home prices is slowing and that is "what makes this housing recovery seem healthier and more sustainable than the bubble of the early 2000s."
Capital Grace Period: Several of the papers reported matter-of-factly on the Federal Reserve's decision to give Citigroup, HSBC, Royal Bank of Scotland and Banco Santander till Jan. 5 to resubmit their capital plans; the deadline had been tomorrow. Citigroup did not answer the Journal's question whether it will resubmit its 2014 plan, or just skip it and file a 2015 request as it had once suggested. The FT focused on the fact that the news means no increase in dividend payments for the parent companies of the three European banks until 2015.
HSBC Portfolio Sale: HSBC's sale of more than $10 billion of private-banking assets in Switzerland to LGT Group is its latest "retreat from some of its extensive banking empire," an FT story says. It has sold more than 60 businesses since Stuart Gulliver took the helm in 2011, according to the article. The U.S. Justice Department is investigating about a dozen Swiss lenders, including HSBC's Swiss unit, for possibly helping Americans hide money to avoid taxes, but an HSBC spokesman said the sale was part of its effort to narrow the focus of its private-banking operations and not because of the probe, the Journal says. LGT is one of the largest privately held private banking and asset management groups in Europe and is run by the royal family of Liechtenstein, the Timesnotes.
Wall Street Journal
Talk about overseas tension ... Executives at European banks such as Deutsche Bank, UniCredit and Credit Agricole are braced for big penalties tied to U.S. sanctions probes given the drumbeat of reports that BNP Paribas is about to pay the U.S. as much as $9 billion and plead guilty to criminal charges. BNP allegedly tried to hide transactions with countries on the U.S. no-no list such as Sudan.
The Journal has two interesting articles involving the Securities and Exchange Commission. One says Thomas J. Butler, a former Citigroup executive who now heads the agency's Office of Credit Ratings, could be poised to take action against ratings firms after a relatively quiet first two years on the job. The other is an opinion piece by Nelson Obus, a founding partner of Wynnefield Capital, about how he and some colleagues beat SEC charges of insider trading, which he called "unbridled regulatory overreach" that took him 12 years and $12 million to overcome.
Some mortgage investors, who are worried they could get end up paying part of the settlements that Citigroup and Bank of America are negotiating with the Justice Department, urged Attorney General Eric Holder to distinguish between modifications of loans the banks own and those owned by investors.
New York Times
The average financial advisor is older than 50, and an effort is underway to build a new talent pool given the importance that banks and brokerages are putting on wealth management. How the new generation of advisors gets paid will be crucial.
Here's a story that goes against the grain: student debt is not crushing most college grads, and it's not a big drag on the economy, according to a Brookings analysis.
The European Central Bank has a plan to stimulate lending to businesses in struggling economies like Italy and Portugal, but European banks fear it could be a risky flashback to precrisis practices.
Check out this wonky Q&A with Cornelia Woll, a French academic whose new book, "The Power of Inaction," compares the costs and approaches in various countries' bank bailouts. Scan liked this quote: "If the government wants the financial industry to contribute [to stability], it needs to get the industry to think systematically about its collective interests, way ahead of an actual crisis."