Receiving Wide Coverage ...
More Big Bank Fines Looming? Wall Street banks could wind up paying a total of $50 billion to put crisis-era mortgage-related allegations behind them, says Dealbook. The figure is based off of "interviews and a confidential analysis of the industry's potential legal exposure" that used JPMorgan Chase's record $13 billion mortgage settlement as a template. Following that deal, it's been widely believed other big banks (particularly Bank of America) were on the Justice Department's radar, but these firms should be able to handle whatever resulting fines may come their way. "$50 billion is a big number," one analyst tells Dealbook. "But the 16 firms covered in the analysis should be able to handle it, and the industry wants to put this behind them." Of course, mortgage-related settlements aren't the only ones banks have to worry about. A Justice Department official tells the Journal more money-laundering enforcement actions are coming, "Prosecutors are increasingly bringing cases under the Bank Secrecy Act, which requires financial institutions to take a range of steps to ensure customers' money doesn't come from criminal activity," the article warns.
The Evolving Mortgage Market: Both the FT and the Washington Post feature stories looking at the possible changes brought on by the Consumer Financial Protection Bureau's new mortgage rules, which go into effect today. The FT leads with bankers' warnings that the rules will push more consumers to seek out shadow lenders, while the Post's headline emphasizes protections for homeowners and buyers. And, ahead of next week's earnings, the Journal analyzes another mortgage market development most bankers are already all too familiar with: the refinancing boom is over, "forcing banks to cut jobs, fight harder for a smaller pool of home-purchase loans and employ new tactics to drum up business."
Wall Street Journal
Standard Chartered is going to need more than an executive re-org to reassure its investors, says this Heard on the Street column, which cites Thursday's falling share prices as evidence. "Now, the tide of positive sentiment toward emerging markets has receded," Andrew Peaple writes. "This leaves Standard Chartered exposed as a one-trick pony with some worrying leadership issues. Nothing it revealed on Thursday has dispelled those concerns."
This earnings preview predicts big banks are set to have their best year since the financial crisis: "Estimates, provided by Thomson Reuters, show that the banking industry's recipe of cost cutting and reserve releases may be starting to work as the economy slowly picks up steam."
Financial Times
Barclays is partnering with alternative lender BlueBay Asset Management in order to lend to riskier U.K. companies, "a move that signals the increasing clout of shadow banks in Europe."
An ongoing series looks at how big bank rivalries have evolved since the financial crisis. First up, was UBS vs. Credit Suisse, then Barclays vs. Deutsche Bank and now Goldman Sachs vs. Morgan Stanley. "Goldman Sachs has defiantly hewed to the strategy that made it the most ruthlessly effective Wall Street bank, with risk-taking at the center of its business," the paper writes of its latest face-off. "Morgan Stanley, which barely emerged in one piece from the crisis, is engaged in a far more drastic transformation. It has bet hugely on wealth management."
Former Citigroup chief (and current Glass-Steagall supporter) Sandy Weill has been named chairman of the board at Hamilton Insurance Group. "Weill's appointment comes as global hedge funds are becoming increasingly powerful in the reinsurance market with several high profile money managers setting up reinsurance vehicles," the paper notes.
New York Times
Columnist Floyd Norris parses the JPM Madoff settlement: "A combination of turf wars and incompetence combined to facilitate the biggest Ponzi scheme ever."
