Receiving Wide Coverage ...

Unveiled: The Office of the Comptroller of the Currency issued detailed guidelines for bank consultants, or "Wall Street's shadow regulators" (hmmm, where have we heard that term before?) on Tuesday. The guidelines require, among other things, that banks "disclose all work a consultant performed for the institution over the past three years" and "document disciplinary actions taken against the consultant and the resources the firm has to complete an assignment" in an attempt to prevent conflict of interests. Bank consultants have come under scrutiny over the past year, thanks largely to a botched foreclosure review (which saw them paid $4 for every $1 to homeowners) and a one-year ban from consulting for New York banks on Deloitte, courtesy of Benjamin Lawsky, who alleged the firm violated banking law when it reviewed Standard Chartered's anti-money laundering practices. Lawsky has also subpoenaed Promontory Financial and PricewaterhouseCoopers in connection with their work on money-laundering cases. "The scrutiny, while it might not erode the consulting industry's profits, could cost consultants individual assignments and undermine their credibility in Washington and on Wall Street," the Times notes.

Yellen Confirmation Curtain Raisers: Federal Reserve chairman nominee Janet Yellen is set to sit before the Senate Banking Committee on Thursday. She's likely to emphasize the central bank's "dual mandate of maximum employment and stable prices," the Journal explains. Yellen should also address "whether the Fed under her leadership can communicate more clearly than it has managed to do in recent months — and whether that is the best the Fed can do to lift the economy from its enduring malaise," the Times' Binyamin Appelbaum suggests. And American Banker Editor at Large Barb Rehm thinks Yellen "would be wise to talk about the elephant in the room" and declare the Fed's independence from the administration, particularly the Treasury Department. "They can and should be equal partners in the quest for financial stability," Rehm writes. "But as things stand now, Treasury dominates the Fed."

Bankers About Town: Goldman Sachs' Lloyd Blankfein, Bank of America's Brian Moynihan and BlackRock's Laurence Fink, all gave speeches in New York City Tuesday, that suggested "prospects for their financial institutions will brighten with an improving economy." Blankfein also said Goldman "remains committed to all of its fixed-income, currencies and commodities, or FICC, trading businesses despite a slowdown that crimped revenue last quarter." (And that his firm can boost return on equity without major changes. And that the ice has thawed between big banks and the government. And … basically, Lloyd Blankfein said a lot of things.) Meanwhile, U.S. Bancorp CEO Richard Davis, speaking at a Merrill Lynch conference, said he believes regulatory risks are making financial firms wary of acquisitions. And some highlights from DealBook's Opportunities for Tomorrow conference include Citadel CEO Kenneth Griffith advocating the breakup of big banks and a candid panel discussion of Dodd-Frank in which 85 Broads' Sallie Krawcheck said, "You haven't really lived until you've got different regulators telling you to do different things."

Wall Street Journal

Freddie Mac has tapped the reinsurance industry to offset potential losses on the loans it guarantees, "expanding an effort to share its risks with private investors."

Anonymice say U.S. prosecutors recently probed the personal financial holdings of some SEC employees in New York. "There is no indication SEC employees are suspected of flouting trading rules on a widespread basis," the paper reports.

Financial Times

The paper takes a deeper dive into the widening Forex probe (aka the new Libor) with atimeline of the currency investigations and this analysis: "Bankers, lawyers and investors fear the benchmark probes might become one of the sector's most damaging legal entanglements."

U.S. Judge Jed Rakoff has publicly criticized the Justice Department's use of deferred prosecution agreements to resolve criminal investigations without holding individuals accountable as "technically and morally suspect."

New York Times

This infographic maps the evolution of credit markets, or, in other words, how a simple loan sparked many innovations … and costly crises.

Washington Post

Tech reporter Timothy Lee talks to prominent Bitcoin developer Mike Hearn about how to scale the Bitcoin network, which is currently only capable of processing around 7 transactions per second, so it can compete with Visa. "There are two different kinds of Bitcoin client," Hearn explains. "Light nodes don't care how big the blocks are. And full nodes have a hard physical limit [of one megabyte per block.] … We just need to take away the limit and get people to upgrade their nodes. The reason it hasn't been done yet is that we're still trying to figure out whether there should be a new limit or no limit at all."

Elsewhere ...

How did JPMorgan Chase CEO Jamie Dimon get the DOJ's Eric Holder to consider the (now possibly defunct) billion-dollar settlement over mortgage-backed securities allegations? The New Yorker's John Kenney has some (farcical) ideas.

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