Receiving Wide Coverage ...
All Politics Is Local: The Wall Street Journal and Financial Times both look at the draft legislation introduced on Tuesday by Sen. Richard Shelby, R-Ala., to provide regulatory relief to financial institutions. American Banker stories provided an executive summary of Shelby's proposal and an analysis of how the political maneuvering will play out between Republicans and Democrats. The political game was the focus of one Journal story, with Democrats immediately expressing reservations with some of Shelby's proposals. Sen. Mark Warner, D-Va., said the bill appeared to be a "significant overreach." Meanwhile, Sen. Sherrod Brown, D-Ohio, the Senate Banking Committee's top Democrat, said, "This draft bill is a sprawling industry wish list of Dodd-Frank rollbacks." But in a clear example of former House Speaker Tip O'Neill's axiom that "all politics is local," the FT reported on a letter sent to Brown by Fifth Third Bank, KeyBank and Huntington National Bank, asking for his support in raising the asset threshold from $50 billion. "Extensive new regulatory compliance [would] force further consolidation in the industry, limiting the availability of traditional banking services of the scale, and at the service levels our customers and your constituents deserve," the Ohio-headquartered banks wrote to Brown. The Journal also noted Shelby's proposal did not include some of the massive changes to the Federal Reserve that many Republicans favor, such as implementing Government Accountability Office audits of monetary policy decisions.
Wall Street Journal
There is some support for Sen. Richard Shelby's proposal to give the Senate the power to approve or reject candidates for the position of New York Fed chief. But the confirmation process itself is broken, which likely would lead to delays in filling an open position.
Investment banks are rethinking strategies of how to sell securities, in the wake of the conviction of Jefferies Group banker Jesse Litvak. Litvak was convicted for lying to customers about how much he paid for securities. Being convicted for a practice that "appears to have been fairly widespread really shook the industry," said Lee Richards, a securities litigator. Some banks are restricting the information their traders can give to counterparties and other banks are keeping a closer watch on their traders. The banks making changes include JPMorgan Chase, Citigroup, Bank of America and Barclays.
Regulators must show they are willing to use the tools at their disposal to break up a big bank, "Heard on the Street" said. Higher capital requirements, stress test and living wills are among the options federal regulators have to deal with the too-big-to-fail problem. Whether regulators will make use of those tools is another question, he writes.
The paper looks at the two activist investment groups that have targeted Bank of New York Mellon. Trian is the friendlier of the two, with its chief investment officer, Ed Garden, having recently said CEO Gerald Hassell's job is safe and that he plans to work with Hassell to make improvements. The other dissident, Marcato Capital Management, is playing it belligerent, calling for the firing of thousands of employees, as well as the termination of Hassell. "We sincerely doubt that meaningful progress will be achieved without new executive talent," Marcato's Mick McGuire said. "This management team has time and again failed to reach its own, tepid goals."
Shares of regional banks have lagged the performance of big banks' stock, according to SNL Financial research. Larger banks are in a position to benefit more from short-term rate increases, as they have more business loans tied to LIBOR.
As federal officials and the banking industry struggles with the problem of soaring student-loan debt, some colleges have devised a plan that could help make college more affordable for at least a few families. San Jose State University in California and the University of Nevada-Las Vegas are two of several schools that have set up monthly installment plans for paying tuition, to allow some students to avoid loans. Schools are outsourcing the servicing of these installment plans to companies like Tuition Management Services, Nelnet and Higher One.
The Economist: The British business news magazine has a special issue on financial technology, with articles that touch on everything from high-tech startup labs to marketplace lending to blockchain technology. In the piece on the London disruptors lab called Level39, the author opines banks will likely always be around and disruptors likely won't be able to seize control of a customer's central bank account. But the fintech entrepreneurs have seized many profitable add-on financial products, and will continue to do so. In its article on blockchain, the magazine notes that large banks are already working on the blockchain concept, to at least a limited degree; some of the back-office operations of large banks "seem destined for a move to decentralised ledgers."
New York Daily News: Leave the hockey players alone. The Daily News has a story on Phil Kenner, who's accused of stealing hundreds of millions of dollars from the Northern Trust accounts of several pro hockey players. To safeguard his scheme, Kenner allegedly told Northern Trust not to bother his pro hockey clients, because "these guys didn't want to be bothered," a former bank official testified during a hearing at a federal courthouse on Long Island.
Charlotte Observer: Bank of America hired JLL to manage its office properties in the Southeast U.S., dumping the commercial real estate-services firm Lincoln Harris. JLL's contract includes the management of Bank of America's headquarters tower in downtown Charlotte, N.C.