Hedge Funds Sue BNY Mellon; Community Banks' Bond Sales

Receiving Wide Coverage ...

Sued: Several hedge funds have sued Bank of New York Mellon over its trustee role in overseeing payments from bonds on which Argentina defaulted in 2001. The suit, filed in London, seeks access to the interest payments the funds claim they are owed, after a federal judge blocked the payments last month.

Wall Street Journal

Community banks were once thought too small to attract attention from bond investors. But nine gained access to the market thanks to help from Kroll Bond Rating Agency. (Christopher Whalen, the senior managing director leading the effort for Kroll, is a frequent contributor to American Banker's BankThink.) Six of the banks Kroll rated have sold bonds and the rest are considering it. The market for community banks' bonds virtually didn't exist six months ago. The Journal names two of the banks to have issued debt thanks to Kroll's ratings: Cadence Bancorp in Houston and Eagle Bancorp in Bethesda, Md.

Tight mortgage lending is here to stay, the paper's "Heard on the Street" column opines. The federal government may want banks to free up credit to make home loans more widely available. But it's the federal government's own fault, thanks to the multibillion-dollar settlements forced on the largest banks, the article claims. Banks are not going to loosen standards now, only to be hauled in front of a Senate committee later.

The financial system is so flush with liquidity, that the federal funds market may not be an adequate tool to drain the system of all the excess liquidity, writes George Melloan in an op-ed column. The problem is the other tools available to the Fed to drain the liquidity have a greater risk of starting a new financial disaster.

Financial Times

Cyber attacks on financial institutions skyrocketed last year, according to a PricewaterhouseCoopers study, the FT's "Lex" column said. To fight the hackers, regulators will require banks to spend more to protect customers' data, which banks don't want to do. But the investments will pay off in the long run, as "customers love nothing more than a safe home for their money."

New York Times

Ladies and gentlemen, meet NYC's first bitcoin ATM. Located inside Flat 128, a British jewelry boutique in Manhattan's West Village. Users scan a smartphone app on the machine, insert cash, and walk away with the knowledge (fingers crossed) that their bitcoin accounts have been updated. The bitcoin ATM is manufactured by a New Hampshire company called Lamassu, and is operated by a company called PYC (which also operates the Flat 128 store). The U.S. is late to the bitcoin ATM game, as there are about 200 such machines worldwide, according to the website Coin ATM Radar.