Receiving Wide Coverage ...
No Love for Fed: The Federal Reserve's decision to require foreign banks in the U.S. to hold more capital could pose a conflict for foreign policymakers in their efforts to end too-big-to-fail scenarios, the Journal reports. But that's not the only international conflict expected. The Journal says Federal Reserve Chairwoman Janet Yellen could get "an earful" from foreign nations during the G-20 meeting this weekend about its tapering of asset purchases. Back in the United States, a large group of investors and big banks continue to criticize the Fed's policy decisions, the Times reports, charging the Fed's policies have caused "the big booms and busts that have hurt the economy in recent decades." At least some answers about the Fed's handling of the financial crisis will be revealed with release of the full transcripts from its 2008 policy meetings, which may come any day. Meanwhile, the Journal says investors are already raising bets against shorter-term Treasury notes "because they fear a potential rise in interest rates will drive prices lower."
Dimon Safe Again: JPMorgan shareholder The Needmor Fund has backed down and will not propose a split of the chairman and chief executive positions at the banking giant, the papers report. JPMorgan Chase skirted "a third successive showdown with shareholders . . . by convincing activists to forgo a vote" on splitting the roles, the FT says.
Wall Street Journal
Citigroup and Deutsche Bank have taken big losses in recent months for betting on Mexico's state oil monopoly, says the Journal, citing people familiar with the contracts. "The developments underscore how pitfalls lurk in banks' core business of helping customers manage their risks, and beyond the so-called proprietary trading businesses that regulators have restricted in the wake of the 2008 financial crisis," the paper says.
Former Citigroup chief executive, Vikram Pandit, is launching a consulting firm less than two years after being ousted from the financial giant. The Journal reports that Pandit is teaming up with the co-author of the "Freakonomics" book series to create a firm aimed at helping companies improve their technology and culture.
Mortgage delinquencies and the number of homes in foreclosure in the fourth quarter are finally nearing prerecession levels based on data from the Mortgage Bankers Association.
New York Times
Student loans seem to be the only type of credit where underwriting standards continue to loosen and defaults are on the rise, the Times cautions. "But increasingly it is becoming obvious that student loans are creating large problems that may persist for decades to come," the paper says. "They will impoverish some borrowers and serve as a drain on economic activity."
The Post has an interview with executives of MasterCard and Visa, who make a strong case for banks and merchants in the U.S. to join the rest of the world in using smart chip cards instead of magnetic strips in order to prevent fraud. "Target was a wake-up call, a bucket of cold water on the system that said you can't relegate this to a spreadsheet exercise," Chris McWilton, MasterCard president of North America. "If you lose the public trust whether you're a bank or a merchant, you don't have a business."