Receiving Wide Coverage ...
U.K.'S Capital Needs: British regulators have told their biggest banks to raise a combined $20.7 billion in capital by the end of the year to cover shortfalls. The announcement builds on earlier capital directives from the Prudential Regulation Authority, which has been attempting to bolster banks' balance sheets in an effort to stem off future financial shocks. Barclays, Royal Bank of Scotland and Lloyds Banking Group, which would need to raise the bulk of the $20.7 billion, told the Journal they "would sell assets and shrink parts of their businesses to address the shortfalls, and won't need to issue new shares." In other U.K. banking news, Chancellor of the Exchequer George Osborne said he would consider a proposal to split RBS into "good" and "bad" banks in order to deal with toxic loans. He also hinted that the U.K.'s stake in Lloyds was now being prepared for a sale. New York Times, Financial Times
Mortgage Pact Blunders: Bank of America, Wells Fargo, JPMorgan Chase and Citigroup are on the receiving end of some negative press this morning after a study from court-appointed monitor Joseph Smith revealed the banks violated terms of the $25 billion national mortgage settlement. "The bank lapses show that some homeowners still face challenges despite an improving housing market and a legal settlement designed to provide more transparency and accountability from lenders," the Journal notes. The report cited that all banks are working on fixing the problems, which include failure to notify loan modification applicants of missing documents and providing inaccurate information to homeowners before beginning foreclosure. New York Attorney General Eric Schneiderman, who announced plans to sue B of A and Wells Fargo for violations of the settlement last month, told the Washington Post the report "affirms that the pattern of violations by Wells Fargo that my office documented in New York is harming homeowners nationwide." Or, loosely translated, he told you so. American Banker
Bernanke's Big Plans: The Federal Reserve could start to taper off purchases by the end of the year if the economic recovery continues, a notion proffered by Fed chairman Ben Bernanke in comments after the Federal Open Market Committee meeting statement was released. Markets were roiled despite Bernanke's best efforts to ensure the public (read: investors) that stimulus efforts weren't ending completely interest rates are expected to remain low for the next few years and that the wind down would be tied to actual improvements in the economy. For example, the Fed said it will end its bond-buying when unemployment hits 7%, which it projects will happen by the middle of 2014. But it's hard to get excited about Fed projections, the Washington Post's Dylan Matthews explains, since the central bank is wrong all the time. "I went back through every June forecast the Fed has released from 2009 to this year," Matthews writes. "Each of those forecasts included projected growth, unemployment and inflation rates for the year in question and the two years after And those forecasts just kept getting less and less optimistic as the years wore on." In other Fed news, bankers should be ready: Bernanke told reporters he expects "more rapid completion" of Dodd-Frank rules in coming months. "After 3 years, we actually might see some major rules completed," American Banker reporter Donna Borak tweeted. New York Times, Financial Times, Washington Post
Germany's Commerzbank is set to cut 5,200 jobs by 2016 "to improve its competitiveness."
New York Times
Thomas Hayes, the former UBS and Citigroup trader charged with fraud tied to the Libor scandal, had his first day in court in London on Thursday. The highlights per Dealbook: "Hayes, who wore a blue shirt, beige trousers and brown shoes, spoke only to confirm his name and give his address and date of birth. Hayes is to remain on bail, which means he is not allowed to leave or attempt to leave Britain, pending his next court hearing."
It appears former big bank executive Sallie Krawcheck is steering 85 Broads, the women's network she purchased last month, toward developing "a way to invest capital in enterprises owned or led by women."