Receiving Wide Coverage ...
Her Own Woman: Banco Santander executive chairman Ana Botín is building a reputation as a woman of action. The Spanish bank has raised $8.8 billion in capital and plans to cut dividends. Analysts say these are practical moves that will make the bank safer in the long run; they also note that the decisions underscore Botín's willingness to upend family tradition. Under the leadership of her late father Emilio Botín, Santander had defended its below-average capital ratio and rebuffed the idea of slashing shareholders' cut. ("It was like a dogma, a principle that had nothing to do with economic or financial theory," a banking professor tells the Financial Times of the bank's former philosophy.) While media coverage of Santander's decision was largely positive, observers raised a few caveats. Both the Wall Street Journal's "Heard on the Street" and the Financial Times' Lex team say it would be a bad idea for the historically deal-hungry Santander to take on an acquisition at the moment. Santander has indicated it might be interested in Portugal's Novo Banco, the "good bank" spun off from the failed Banco Espírito Santo. Meanwhile, Reuters Breakingviews columnist Fiona Maharg-Bravo applauds Santander's capital raise but notes smaller shareholders may bristle at the bank's decision to do so via a quick share sale. "A rights issue would have been democratic, by giving existing shareholdersincluding many a legion of investorspriority participation," she writes. Wall Street Journal, Financial Times, New York Times
Wall Street Journal
An uptick in missed car payments suggests fears of a new subprime crisis in the auto industry may be warranted, according to the paper. "More than 8.4% of borrowers with weak credit scores who took out loans in the first quarter of 2014 had missed payments by November," according to analysis by Moody's analytics. "That was the highest level since 2008, when early delinquencies for subprime borrowers rose above 9%."
How do you miss a problem the size of a whale? Maybe you're too busy squabbling with a fellow lookout to notice. That's one conclusion from a new report from the Federal Reserve's Office of Inspector General, which tackles the question of how the New York Fed failed to examine JPMorgan Chase's investment office ahead of the 2012 London whale trading scandal. "Turf battles with other regulators, overreliance on J.P. Morgan's solid reputation and financial-crisis-related distractions" hobbled the New York Fed's oversight, according to the paper. The turf battle in question appears to have been with the Office of the Comptroller of the Currency; some Fed staffers claim the other regulator was "territorial."
Standard Chartered was right to get out of the equities business, but it's got much bigger issues to worry about, according to "Heard on the Street." The column suggests that the U.K. lender focus on boosting capital and addressing credit risks.
"Anita Fung, head of HSBC's Hong Kong operation, is stepping down as the bank creates a role to oversee all of Greater China amid efforts to expand and broaden its business in the region," the paper reports. The bank has appointed Helen Wong, the head of its Chinese unit, to spearhead the Greater China division; Wong will also take over Fung's responsibilities in Hong Kong until the bank appoints a replacement.
The lessons of the Great Depression allowed policymakers to soften the blow of the most recent financial crisis, but avoiding total disaster may have also curtailed the possibility for deeper reforms, according to the new book Hall of Mirrors. The book by University of California, Berkeley professor Barry Eichengreen receives a glowing review from the FT's Ferdinando Giugliano.
New York Times
Robo-signing is alive and well in the debt collection industry, according to the paper. The report is tied to New York attorney general Eric Schneiderman's expected $675,000 settlement with debt buyer Encore Capital Group, which allegedly "filed thousands of flawed debt collection lawsuits against state residents." The settlement will also vacate court judgments against 4,500 borrowers, anonymice tell the Times.