Receiving Wide Coverage ...
Mixed Signals: The backlash to the backlash has begun. After the China-infused market meltdown, hopes were dashed for a September rate hike, with voices ranging from Larry Summers to William Dudley calling the timing into question. Now we hear voices calling out, according to reports in the Wall Street Journal, New York Times and CNBC, to quit dragging your feet and get on with it.
The roll call of rate-hike bulls includes, but is not limited to: JPMorgan Chase International Chairman Jacob Frenkel, JPMorgan Chase Chief Economist Michael Feroli, Indonesia Finance Minister Bambang Brodjonegoro, Bank of Japan Governor Haruhiko Kuroda, Institute for International Finance President Timothy Adams, Cleveland Fed President Loretta Mester and Kansas City Fed President Esther George.
Frenkel's comments, which were echoed by other observers, suggested the Fed has indicated for so long the rate hike is coming, it would have a negative effect to pull back now. "If you delay something that you were planning to do, then you leave the impression that your compass is different than what you led markets to believe," Frenkel said.
And Adams made the point that a rate hike would catch no one off guard. "I can't imagine there would be that many people who would wake up that morning and say, 'Wow I didn't see this coming,'" he said.
Wall Street Journal
Bank of New York Mellon continued to wrestle on Thursday with a computer glitch that caused the miscalculation of hundreds of mutual funds. BNY Mellon said the performance of the accounting software, which is made by SunGard Data Systems, was improving on Thursday, though there were still problems. "We at SunGard apologize to BNY Mellon for the adverse impact this unfortunate incident has had on its operations and clients," SunGard's CEO said in a statement.
A contributing factor to worries about the Chinese economy is the fact that China's banks are loaded with bad loans. Profit growth at some of China's largest banks, including Industrial & Commercial Bank of China and Agricultural Bank of China all declined sharply in the most-recent quarter.
Elsewhere ...
St. Louis Business Journal: Mobile banking is all the rage among … banking company executives? Customers aren't smitten with mobile-banking apps, according to a recent survey by a group of Federal Reserve District banks. That probably comes as an unwelcome surprise to the legions of banks that have been scrambling to add apps allowing their customers to conduct transactions over their smartphones. Or maybe it will just take some time for customers to catch on.
The Oregonian: The former CEO of Bank of Oswego in Oregon has sued his ex-employer, asking it to cover his legal fees as he fights allegations of fraud. Dan Heine is scheduled to go on trial on Sept. 18, on charges of conspiracy to commit bank fraud and making false entries, as part of a scheme to hide bad loans from regulators. Geoff Walsh, a former vice president at Bank of Oswego, earlier this year was indicted on allegations he ran a side business, not owned by the bank, as a lender that was "bewildering in its complexity."
San Francisco Business Times: Bank of America agreed to pay $36 million to settle charges that it failed to pay overtime. The lawsuit was filed by 365 current and former B of A workers, who were employed by subsidiary Landsafe Appraisal Services, many of them in California. The suit alleged that B of A incorrectly classified the workers as having "administrative" or "professional" exemptions and thus weren't earmarked to receive overtime pay.
Bloomberg: The Labor Department is considering banning three European banks — Deutsche Bank, UBS Group and Royal Bank of Scotland — from managing U.S. pension funds. The punishment stems from the banks' admissions of guilt over rigging foreign-exchange rates. Meanwhile, JPMorgan Chase, Citigroup and Barclays have requested waivers to allow their pension-management operations to continue.
