Receiving Wide Coverage ...
AIG Stock for Sale: The Treasury Department announced on Sunday that it is getting ready to sell $18 billion of the stock it purchased in American International Group during the controversial 2008 bailout of the insurance firm. The sale is expected to reduce the federal government — or, as the FT notes, "the U.S. taxpayer" — to a minority shareholder in the company for the first time since the financial crisis. According to the Times, the Treasury could reduce its holdings from 53% to as little as 15%, a move that marks "the realization of a long-held goal by both the Obama administration and the company." The Journal was quick to note this sale "could raise questions about timing, coming less than two months before a closely contested presidential election," though the Treasury was just as quick to tell the paper the unwinding of AIG has nothing to do with the political season.
All news outlets are reporting the government will profit from the investment, though just how much money it will make remains unclear. The Times and the Journal also point out there are plenty of big crisis-related investments remaining in the government's portfolio that it's not likely to recover fully on. These investments include the bailouts of the still-alive General Motors, Ally Financial and mortgage giants Fannie Mae and Freddie Mac.
As for AIG, the sale will come with certain challenges as it is expected to be regulated by the Federal Reserve — which sold off its remaining toxic assets from the company over the summer — once the Treasury Department officially becomes a minority shareholder. This switch could subject the company to, among other things, rules on leverage and risk-based capital, the Journal reports.
Wall Street Journal
JPMorgan Chase and Citigroup are considering "new approaches to executive compensation," following the missteps each bank has experienced this year. Both financial institutions are concerned primarily with executive bonus pay. JPMorgan is considering "lower 2012 bonuses for Chief Executive James Dimon and other top executives," following the London Whale debacle, while Citibank is looking to introduce "more quantitative measures" to its senior management bonus programs in an effort to restore profitability.
A plan that would make it easier for homeowners to refinance their mortgages is gaining new support in Congress, thanks, in part, to endorsements from the Mortgage Bankers Association and the National Association of Realtors. The proposal, backed by the White House and up for a vote in the Senate, would allow homeowners with loans backed by Fannie and Freddie to refinance their mortgage with any lender, meaning they could shop around for the best rates in an effort to save money. It also eliminates certain Fannie and Freddie fees. The Journal, which is clearly very aware there's a presidential election this November, says the plan represents "a chance for the White House to shore up a vulnerable housing record heading into the final stretch of the election campaign."
Deutsche Bank CEOs Anshu Jain and Jürgen Fitschen are set to debut their big plan to revamp the ailing German bank on Tuesday. Analysts expect the co-chiefs "will detail the business areas the bank will shut down or expand, compensation and cost-cutting strategies and a strategy for the newly combined asset management and private-wealth business division." They are also expected to outline plans to raise capital.
"Shares of three banks serving Los Angeles's Koreatown neighborhood have been among the banking sector's top performers this year."
U.K. auditors of financial companies are slated to get a new code of conduct. The Chartered Institute of Internal Auditors is expected to announce later today that it is working with observers from the Financial Services Authority and the Bank of England to debut a draft version of this new code in December. The code is expected to focus more on risk management and less on fraud prevention in light of this summer's Libor-rigging scandal.
New York Times
Lawmakers are set to push a bill that curbs the powe of financial regulators, including the Securities and Exchange Commission, the Commodity Futures Trading Commission and the Federal Deposit Insurance Corporation, by giving more power to the president. Under the bill, which is up for debate in a Senate committee this month, the White House would be able "to second-guess major rules and mandate that agencies carefully study the economic effects of new regulation." The bill, if enatced, could effectively delay a number of rules meant to police the financial industry, but the bill's authors say they are not out to kill financial reform. Instead, they believe their legislation "will promote a more stable regulatory environment for economic growth and job creation."