Wall Street Journal
An unsigned Journal editorial makes the argument that the feds are scared out of their wits by the potential of going to a jury trial in a case involving mortgage-backed securities. Japanese bank Nomura one of the 18 banks named in the Federal Housing Finance Agency 's 2011 lawsuit is willing to fight the government's lawsuit claiming Fannie Mae and Freddie Mac were victimized by the banks, which didn't inform the GSEs about the risks involved in mortgage-backed securities. Nomura has shown that it's willing to go to a jury trial. But the possibility of facing a jury has the government skittish about potentially losing the case, so it's abandoned damage claims and is staking its claims on a bench trial with Judge Denise Cote, "who is well known for tilting toward the government against business and has been siding with the feds in pre-trial rulings."
Groups that advocate for affordable housing have criticized New York Gov. Andrew Cuomo for not using any of the $492 million in settlement funds the state received from the mortgage crisis for housing programs. The settlement documents give the state discretion to use the funds as it sees fit, so it's not required to direct the money to housing programs. A Cuomo spokeswoman said the governor has made "a record commitment of over $1 billion to affordable housing during his administration."
Financial Times
The paper has mini-profiles of four executives in their 40s who are deemed the next generation of leaders at JPMorgan Chase.
New York Times
The quest to kill the Export-Import Bank is causing fissures within the ranks of the Tea Party. On one side, some businessmen who self-identify as Tea Party Republicans want to keep the Ex-Im Bank open, as it helps their export-driven companies. On the other side are elected officials like Sen. Ted Cruz, R-Texas, who want to dismantle the Ex-Im because they're frustrated by their inability (as of yet) to overturn Obamacare or stop Obama's immigration policies. Former Florida Gov. Jeb Bush, for example, once supported the Ex-Im Bank, but has now joined Sens. Cruz, Rand Paul of Kentucky and Marco Rubio of Florida in "embracing its demise."
Elsewhere ...
The Economist: Time to abandon ship. The concept of global megabanks isn't working, so it's high time to break up the likes of JPMorgan, Citigroup and HSBC, says an editorial in the Economist. The high cost of compliance, plus the poor performance for shareholders, equals a big, fat, unappetizing mess. "If the likes of Citi and HSBC don't buck up soon, they will be dismemberednot by regulators, but by their shareholders.
It is hard to avoid the conclusion that global banks are, by the standards of normal firms, dysfunctional conglomerates that struggle to allocate their resources well." More on megabanks from the British magazine here and a deep dive on Citi here.
