Receiving Wide Coverage ...
Second Takes on FSB Rules: The Financial Stability Board's newly proposed capital requirements for the world's largest banks may make banks safer, but they won't end the debate over too big to fail, according to the Wall Street Journal. Analysts estimate big U.S. banks would have to issue billions of dollars in new long-term debt in order to meet the FSB requirements and predict banks will "face a modest earnings headwind" on the road to compliance. Meanwhile, the Financial Times' Lex team ponders the FSB's proposed rules on the quality of debt that banks must have on hand in order to absorb losses. Wall Street Journal, Financial Times
Wall Street Journal
The U.S. Postal Service is the latest organization to fall prey to a data breach. More than 800,000 people may have had their names, Social Security numbers and addresses stolen in the attack. The majority of those affected are Postal Service employees and regulators. "An unknown number of customers also could have been affected, though not to the same degree," the Postal Service reports.
The prepaid debit card industry plans to give a warm welcome to forthcoming rules from the Consumer Financial Protection Bureau, according to the paper. The thinking is the CFPB's proposed rules, expected Thursday, will lend legitimacy to the industry. The CFPB is expected to push for more transparent fee disclosures and to restrict overdrafts, but the paper notes most of big prepaid card issuers don't allow overdrafts to begin with.
A rumored partnership between Apple Pay and Chinese e-commerce firm Alibaba would focus on the Chinese market, according to an Alibaba higher-up. "One possible scenario is for Alibaba's financial affiliate, which owns the Alipay electronic-payment business in China, to provide back-end services for Apple's Apple Pay payment system, allowing iPhone users to pay with Apple Pay using the money from their Alipay accounts," the paper reports.
New York Times
Everybody wants a piece of the settlements with big banks accused of manipulating the foreign exchange market, according to the paper. The Commodity Futures Trading Commission is expected to join the Financial Conduct Authority of Britain and the Office of the Comptroller of the Currency in announcing settlements Wednesday. Big banks had been crossing their fingers for a global settlement, but there's a downside to the CFTC's involvement: the agency is expected to use tougher language than British authorities, and its participation will raise the costs of the deal.
Community groups and labor unions want the Federal Reserve to give the public a say in the selection of new regional Fed presidents, according to the paper. Fed chair Janet Yellen is set to meet with representatives from the groups on Friday. "The Federal Reserve has huge influence over the number of people who have jobs, over our wages, over the number of hours that we get to work, and yet we don't have discussion and engagement over what Fed policy should be," one advocate tells the paper. "More people's voices need to be heard."
A lawsuit filed Monday in a Brooklyn federal court accuses five major European banks of facilitating terrorist financing by processing transactions on behalf of Iran. The lawsuit seeks to hold HSBC, Barclays, Standard Chartered, the Royal Bank of Scotland and Credit Suisse liable because the banks "happened to do business with Iranian financial institutions that have separately financed Hezbollah, the Shiite militant group and political party suspected of aiding attacks in Iraq, as well as Iran's Islamic Revolutionary Guard Corps-Qods Force 'and other instruments of Iranian state-sponsored terrorism,'" according to the paper.
Associated Bank in Green Bay, Wis., is the latest lender to try to set itself apart from the pack with television ads that mock banks' unhelpful customer service and byzantine processes. Banks that take this approach run the risk of further cementing the industry's reputational woes, according to one pundit. But he says Associated avoids the problem with commercials that humorously promote consumer interests rather than vilifying the competition.
More transparency about executive pay is supposed to help keep a lid on outsized compensation, but it seems to be having the opposite effect, according to a study by three University of Cambridge professors. "The study shows in devastating detail how compensation consultantswhich use the increasingly available public data on compensation to advise boards on how much to pay chief executivesare helping to ratchet up the pay for the nation's top executives," the paper reports.