Receiving Wide Coverage ...
The End of Bond Buying: The Federal Reserve will likely end its bond-buying program in October, according to minutes from the central bank's June policy meeting. The Fed minutes say that the decision "should not be interpreted as evidence that rate increases were likely to begin sooner," according to the New York Times. The Times focuses on Fed officials' cautious economic outlook, reporting that many remain concerned about unemployment, sluggish economic output and suboptimal inflation. The Wall Street Journal highlights the controversy surrounding the Fed's economic stimulus program, noting in the lead that its effects are "still the subject of immense debate." A separate Journal article centers on Fed officials' discussion of the mechanics of raising interest rates. "The Fed minutes show that officials are focusing on the rate they pay banks for reserves," according to the report. "By raising this rate, now at a minimal 0.25%, the Fed can increase the overall cost of borrowing in the economy as it tries to keep growth and hiring on track, and inflation stable." The Financial Times plays its account of the Fed meeting pretty straight.
Everyone's Two Cents on Citi: The papers weigh in on Citigroup as word spreads that the bank is nearing a $7 billion settlement with the Department of Justice over charges that it sold shoddy mortgage-backed securities in the run-up to the financial crisis. Citi's expected decision to pay up rather than go to trial is a "painful" though "expeditious" course, according to the Journal's "Heard on the Street." The FT's Lex team suggests Citi is right to "pay and move on," arguing that its priorities should be to "speed up the closure of the 'bad bank'; erect a solid firewall to protect the 'good bank' from future economic downturns and bolster its internal anti-fraud controls to avoid another Mexico-style scandal."
Wall Street Journal
The Securities and Exchange Commission is expected to vote this month on rules that aim to curb runs on money-market mutual funds during economic downturns. The plan would "require certain money funds catering to large, institutional investors to abandon their fixed $1 share price and float in value like other mutual funds" and "allow money funds to temporarily block investors from withdrawing their money in times of stress, or require a fee to redeem shares." Not all regulators are on board with the plan. Members of the Financial Stability Oversight Council have argued that the rules could backfire, encouraging runs rather than staunching them.
Bank of America has requested Federal Reserve approval for a plan to increase quarterly dividends to five cents a share. The Fed had previously granted permission, but the bank was forced to withdraw the request when it discovered its $4 billion accounting error this spring.
"Credit Suisse says its management of billions of dollars in assets for pension plans will be at risk unless a U.S. court pushes back sentencing of the Swiss bank for aiding tax evasion."
The Bitcoin Foundation has hired a lobbying firm, Thorsen French Advocacy, to help it win allies on Capitol Hill and influence regulation of the digital currency.
Financial Times
When it comes to payment systems, the U.S. is practically stuck in the Middle Ages, according to the FT's John Gapper. The U.K. and other European countries frolic through a high-tech world of contactless card payment methods and chip and pin cards; the U.S. still relies on paper checks and cards with magnetic stripes. While it's "strange that a country that often leads the rest of the world in consumer technology lags behind badly in the basic infrastructure of retail banking," Gapper says, Europe should seize the chance to "build a lead in financial innovation."
JPMorgan Chase has appointed David Li as the new chief of its China business. Li joins the company from UBS, where he spent nine years in a similar role.
"The influential head of the House Financial Services Committee has called on U.S. Treasury secretary Jack Lew to investigate whether sweeping financial reform has impaired the $10 [trillion] market for U.S. corporate debt and risks amplifying an interest rate shock for large companies," the FT reports. Rep. Jeb Hensarling urged Lew to acknowledge "the Volcker rule's ill effects on liquidity in the corporate bond market" in a letter sent this week.
Washington Post
The Post chats with recently retired Federal Reserve governor Jeremy Stein about the central bank's strategy for exiting its stimulus programs and the Fed's approach to communicating its policies.
Barclays has created an exchange-traded note that tracks an index of U.S. companies that have women in leadership roles. "The primary goal is to give investors who want to vote with their money and express an opinion on women in leadership the tool to do that," Sue Meirs, Barclays' chief operating officer for equity and funds structured-market sales, tells the paper.
Elsewhere ...
Houston Chronicle: Compliance officers these days are making bank, according to the Houston Chronicle. A wave of new, complex regulations has put compliance experts in high demand, boosting average salaries. At least one Texas School Sam Houston State University will begin offering an entire course on compliance and regulation in banking next spring.
