Receiving Wide Coverage ...
Interest Rate Outlook: The Wall Street Journal suggests the Fed is likely to stick to the plan to raise rates before the end of the year, based on discussions at the Federal Reserve Bank of Kansas City's annual policy retreat in Jackson Hole, Wyo. Market volatility and economic troubles in China aside, the paper says, a majority of Fed officials think the U.S. is largely on track for a quarter-percentage point increase.
A speech by Fed Vice Chairman Stanley Fischer at the symposium reinforces that interpretation, according to both the Journal and the New York Times. Fischer predicted inflation will close in on the Fed's annual target of 2% as oil prices and import prices recover, paving the way for a rate hike.
However, a separate Times article declines to draw conclusions about when the Fed will raise rates. Instead, the paper focuses on the heated battle between liberal and conservative activists on the sidelines of the retreat. Economist and former Fed official Alan Blinder points out it's unusual for people to be so invested in the exact timing of a quarter-point increase, but "the Fed remains the center of the financial universe. People stare at it like they stare at the North Star."
Mellon Woes: Bank of New York Mellon was still working last night to correct a computer glitch that left it unable to provide investors with accurate pricing information on nearly 50 fund companies last week. The bank's chief executive said it planned to have corrected prices available on exchange-traded funds before the market opened Monday morning, with updated pricing data on mutual funds to follow later that morning. The Wall Street Journal notes the glitch has caused reputational problems for BNY Mellon. Perhaps that's why the bank sought a public apology from its software vendor SunGard, which said last week it was sorry for "the adverse impact this unfortunate incident has had on its operations and clients," according to the Financial Times.
Wall Street Journal
Regulatory settlements frequently require financial companies to hire outside monitors who will make sure the firms follow the straight and narrow. But how effective is such oversight if firms can just fire a monitor deemed overly harsh and get themselves a nicer one? That's one of the questions raised by the paper's report on the "lucrative cottage industry made up of former prosecutors and small consulting firms" that serve as watchdogs for hire. The paper also questions the secrecy of the process by which law-enforcement officials select monitors. One law professor suggests judges should choose monitors "to avoid cronyism concerns."
What New York bank can claim both former Congressman Barney Frank and a famous hip-hop producer among its clientele? That would be Signature Bank, a fast-growing $30 billion institution profiled in the paper. Intriguingly, Signature won the devotion of producer Irv "Gotti" Lorenzo by keeping him as a client when he came up against federal money-laundering charges in 2005. (The bank said it would have dumped Lorenzo if he had been found guilty.) Meanwhile, Frank recently joined Signature's board. He tells the paper he was attracted to Signature's focus on traditional banking rather than "exotic derivatives and credit-default swaps."
The paper reports on high-profile antitrust lawyer Keila Ravelo's fall from grace. Ravelo is accused of bilking MasterCard and law firms out of $5 million and of engaging in illicit communications with a lawyer for the opposing side in antitrust lawsuits brought by merchants against credit-card companies.
The vast majority of California homeowners don't have earthquake insurance. State officials and insurance companies are trying to convince them to change their ways.
Financial Times
Bank of America shareholders are still riled up over the board's decision to give chief executive Brian Moynihan the dual role of chairman last fall. The paper reports several big investors, including Norges Bank Investment Management and CtW Investment Group, appear likely to vote against the combined role at the bank's special meeting on September 22.
Banks are giving the EU's proposed data privacy laws the thumbs down. Banks say the law will make it harder for them to "detect fraud, automatically grant loans, and hurt online services." But consumer-rights groups say banks are exaggerating the consequences. In case you missed it, BankThink contributor Michelle Frasher last week wrote about the difficulty multinational banks will face in complying with both the privacy law and anti-money laundering rules.
New York Times
Partisan politics divide the 2016 presidential candidates on the best way forward for Wall Street regulation, the paper reports. Republican candidates mostly want to roll back the Dodd-Frank Act, while Democrats Bernie Sanders and Martin O'Malley want to bring back Glass-Steagall. Hillary Clinton has more modest ambitions when it comes to reform, which the paper says gives them a better chance of becoming law should she win the presidency.
Speaking of the presidential race, vice president Joe Biden's past connections with the financial industry may hurt his chances with the Democratic party's liberal base, the paper reports.
Gretchen Morgenson has some harsh words for regulators that fail to hold misbehaving bankers accountable for their actions, provoked by the Securities and Exchange Commission's recent municipal bond settlement with Citigroup.
Have you heard that banks are getting interested in Bitcoin technology? (Hazarding a guess that most American Banker readers are aware this development.)
Outgoing Barclays compliance officer Peter Sivere is leveling accusations at his soon-to-be former employer. He tells columnist William D. Cohan he believes Barclays may have leaked information it gained as a financial advisor on Hewlett-Packard's acquisition of a British software company to its trading side. Sivere was demoted after filing an internal report on his suspicions. Barclays says it investigated the report and found "no evidence of wrongdoing or misconduct."
The hit musical "Hamilton" is luring past and present Treasury secretaries to Broadway, including Timothy Geithner, Robert Rubin and Jacob Lew. The paper notes Lew's campaign to bump Alexander Hamilton to a less prominent place on the $10 bill in order to instate a woman from American history has raised the hackles of the "Hamilton" crowd, but they still gave him a warm reception.
Elsewhere ...
Boston Globe: Is Boston showing signs of a commercial real estate bubble?
