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More Tumult at Portuguese Bank: The "good bank" created after the government rescue of Portuguese lender Banco Espírito Santo has a new leader after its top management team resigned Saturday. Portugal's central bank on Sunday appointed Lloyds Banking Group executive Eduardo Stock da Cunha to head Novo Banco. Stock da Cunha "will have the difficult task of retaining customers at the bank … while it prepares itself for a sale, which Bank of Portugal has said should happen as quickly as possible," the Wall Street Journal reports. Former Novo Banco chief executive Vítor Bento and two other senior executives said in a statement they were stepping down because their mandate had "significantly changed" since they assumed their roles just two months ago. They were brought on to recapitalize and right the ship of Banco Espírito Santo, but plans changed in August when regulators stepped in to bail out the bank after it reported a large first-half loss stemming from its exposure to its troubled parent company. Wall Street Journal, Financial Times, New York Times

Wall Street Journal

Federal Reserve chair Janet Yellen has proven to be more consensus-builder than easy-money bulldozer, according to the paper's interviews with 20 of her colleagues. "Many expected Ms. Yellen to steer the central bank toward extending its long period of superlow interest rates," the paper notes. "But she has shown herself willing to move toward exiting from that policy as officials found the economy to be on stronger footing." This portrait of Yellen comes as Fed officials prepare to discuss whether to alter its guidance on short-term interest rates at their policy meeting this week.

The Organization for Economic Cooperation and Development has lowered its economic growth forecasts for the U.S. and other major economies in 2014. The U.S. economy is projected to grow 2.1% this year, down from a 2.6% growth estimate in May. The eurozone is expected to be in worse shape, with projected growth of 0.8%, down from 1.2%. Turmoil in Ukraine and the Middle East contributed to the slashed forecasts, as did the referendum on Scottish independence and anticipation of tighter U.S. monetary policy.

The U.S. government is planning to bring criminal charges against individual traders allegedly involved in the interest-rate rigging scandal, according to anonymice. "Justice Department prosecutors and Federal Bureau of Investigation agents have 'flipped' a number of bank employees who remained at their jobs, secretly gathering evidence against their colleagues by engaging in exchanges with suspects about possible crimes and recording them," the paper reports. It's unclear whether prosecutors will be going after bank employees on the high end of the food chain or settle for small fry.

Investors trust the Federal Reserve and other central banks to steady financial markets and economies, according to columnist E.S. Browning. That kind of faith is worrisome to free-market advocates, who say it creates market distortion.

Former American International Group chief Maurice "Hank" Greenberg is seeking $40 billion in damages, claiming the U.S. government violated the constitution by seizing shareholder property during the insurance giant's bailout six years ago. In an unusual twist, AIG could be on the hook for the payment if Greenburg triumphs: "AIG indemnified the Federal Reserve Bank of New York for any payouts from litigation tied to the emergency loans," the paper reports.

Long-term interest rates may be set for an uptick, but it's likely to be a small one, according to Justin Lahart. One reason: "as long as inflation remains low, investors may view even low-yielding Treasurys as a better alternative than cash."

Financial Times

"Banks may be becoming uninvestable," the paper reports with dramatic flair. As financial institutions, such as Bank of America, face increasingly hefty legal fees for actions tied to the financial crisis and other bad behaviors, some investors are backing out of banks altogether. U.K. fund manager Neil Woodford says, "fines are increasingly being sized on a bank's ability to pay, rather than on the extent of the transgression," which means that even banks with healthy finances may seem like risky bets. Woodford and his like-minded colleagues appear to be in the minority, however; most investors seem willing to play the long game and wait for higher dividends.

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