Receiving Wide Coverage ...
First Forex Deal Reached: Five banks have agreed to shell out a total of $3.3 billion to U.S., British and Swiss authorities to settle charges that they tried to manipulated the foreign exchange market. The banks included in the settlement were Citigroup, JPMorgan Chase, HSBC, Royal Bank of Scotland and UBS; Barclays had been in talks with regulators but got cold feet as the announcement neared, the New York Times reports. The Office of the Comptroller of the Currency is expected to announce a related settlement later Wednesday with some of the same banks, along with Bank of America, according to the papers. Meanwhile, the Justice Department, the Federal Reserve and New York's financial regulator are pursuing investigations on separate timelines.
The banks' settlements with the U.K.'s Financial Conduct Authority, the Commodity Futures Trading Commission in the U.S. and Switzerland's Finma reveal some alarming details. The FCA says traders at banks continued conspiring to rig rates all the way up to October 2013, after authorities had already launched probes into the matter and reached Libor rate-rigging settlements. Several banks are accused of actively ignoring whistleblower reports and other red flags, as the Wall Street Journal reports. Regulators also released chatroom transcripts from a swaggering group of forex traders who conspired to rig the benchmark rate and called themselves "the 3 musketeers." (Amusingly, the Times' objections to the chatroom dialogue appear to be largely grammatical; the paper introduces the transcripts by noting the traders' conversations were "filled with jargon, incorrect spelling, bad language and typos.")
The papers note that while some critics say the joint settlement model lets banks off easy, it nonetheless appeals to both regulators and lenders. A lawyer tells the Financial Times that it's "safety in numbers for the banks" and that regulators "can come up with a big headline number, bathe in the glory, free up resources and move on." The FT's Lex team anticipates and shoots down the common refrain that big regulatory settlements wind up undeservedly punishing banks' investors. "[S]hareholders also share some of the blame for not pushing harder for management to uphold higher standards," the column argues.
Wall Street Journal
Benjamin Lawsky is ramping up to leave his post as New York's top financial watchdog as soon as early next year, an anonymouse tells the paper. Lawsky has reportedly "explored options in the private sector in recent weeks," according to the source; Lawsky's office says he "hasn't decided on his plans for the future
"Online small-business lender OnDeck Capital filed for an initial public offering Tuesday, and John Carney of "Heard on the Street" thinks its prospects look pretty decent. The start-up is growing rapidly and improving operating costs, and while it's still losing money, it's bleeding less than it used to.
New York Times
French lender BNP Paribas should consider buying Italian bank Monte dei Paschi di Siena, according to Reuters Breakingviews columnist Neil Unmack. "Buying Monte dei Paschi would give BNP scale in Italy," he writes, and the Italian bank is attempting to get on more solid footing with an asset quality review and plans to raise as much as 2.5 billion in euros by selling new shares.