Receiving Wide Coverage ...
Deutsche Bank's Troubles: The news of the New York Fed's stern rebuke to Deutsche Bank over its questionable financial data has industry observers making bets on the fallout. Deutsche Bank's chief financial officer, Stefan Krause, is now in the hot seat, according to the Wall Street Journal. Krause launched an effort to whip the bank's financial data into shape in 2010, but progress has been slow. Krause is far from the bank's only executive with an uncertain future, writes Paul J. Davies in "Heard on the Street": "If missteps in the U.S. mean Deutsche Bank must come back to shareholders for more equity, that should lead to changes at the top." Deutsche may also have to put its expansion plans on the back burner in order to focus on strengthening the quality of its financial reporting and meeting the 2016 compliance deadline for new regulatory requirements, according to the Financial Times. "Analysts said efforts to improve reporting and comply with the much tougher rules was a Herculean task requiring huge investments in technology and causing a lot of senior management distraction," the FT reports. Reuters Breakingviews columnist Dominic Elliott draws a similar conclusion: "management's focus will need to be internal for years to come," he writes.
Wall Street Journal
Native American tribes that rely on online payday lending businesses as an economic engine are concerned about the effects of Operation Choke Point. Banks are cutting ties with reservations' online lending firms in the wake of the regulatory crackdown on lenders that do business with illicit companies. "As a result, tribes across Indian Country, where Internet lending has grown more popular, have been forced to scramble to find willing partners."
JPMorgan chief Jamie Dimon announced last week plans to cut back on Federal Housing Administration lending in order to reduce the risk of future litigation and hefty settlements. But while Dimon's idea may appeal to other banks, FHA lending is likely to stick around: "Analysts say banks can't afford to leave the program entirely because it is the easiest way to fulfill a federal mandate to serve poorer neighborhoods."
The banks at the center of the U.K.'s investigation into charges of foreign-exchange rate-rigging are hoping there's safety in numbers. Barclays, UBS and other lenders want regulators to announce their individual settlements all at once, so as to deflect attention onto any one bank.
A bewhiskered Barney Frank "jousted, cracked jokes and interrupted" during a House hearing on the effects of the 2010 financial reform law that bears his name. Among his one-liners: Republican protests of Dodd-Frank offer "a very Marxist analysis, but the Marx in question is Chico."
The bank bailouts of 2008 hurt the economy by slowing new investments, according to economist Vernon L. Smith. "To encourage investment, the U.S. needs to lower its corporate rates by at least 10 percentage points and reduce the incentive to escape the out-of-line and unreasonably high corporate tax rate," he writes.