Receiving Wide Coverage ...
Et tu, UniCredit?: You can add UniCredit to the growing list of banks under scrutiny for possible sanctions violations. The Journal reports the Italian bank is being investigated by the New York County District Attorney's Office, the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) and the U.S. Department of Justice concerning dealings its German unit HypoVereinsbank had with heavily sanctioned Iran. Few details regarding the probe have yet to become available, but the probe is apparently not the result of the high-profile money-laundering activities have received following the investigation of Standard Chartered by New York regulator Benjamin Lawsky, which ended in a $340 million settlement. According to the FT, UniCredit disclosed it was being investigating by U.S. authorities at least seven months ago, though "it appears never to have been reported in the media." Over the weekend, the bank said its German unit was in the process of conducting an internal review regarding the possible violations and that "it would be inappropriate to comment further at this time."
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Romney's Banking Views Get (a Bit) Clearer: Republican presidential candidate Mitt Romney, who has previously provided few details about how he views banking issues, may have an issue with the current size of big banks. The FT reports, during a campaign rally in Ohio on Saturday, Romney said re-electing President Barack Obama would open the door to "big banks getting bigger" and "small banks getting smaller." The statement builds on remarks Romney made in an interview published by Time magazine last week, in which he said Dodd-Frank reforms led a large amount of assets to be concentrated in a very small number of financial institutions. "By designating certain banks as being too big to fail — strategically important banks — it makes it more difficult for the banks not so designated to attract customers and to expand their business," the Republican candidate told the magazine. "What you've seen as a result is a concentration in the hands of a handful of banks that now has greater systemic threat than what even existed before."
The remarks are a little surprising, given, as the FT notes, some big banks represent the largest direct contributors to his campaign. Still, the Republican candidate stopped short of pulling a Sandy Weill and advocating a return to Glass-Steagall. "That was not a cause of the last crisis," Romney told Time. "Trying to solve problems that did not exist may be counterproductive."
Romney's feelings about Dodd-Frank, while vague, haven't exactly been a secret. As previously reported by American Banker, the Republican candidate's economic plan contains two proposals that could effectively undo the regulatory act without actually repealing it.
Wall Street Journal
Lawsuits related to several banks' manipulation of interest rates are piling up. According to a review of federal and state court filings, a number of cities, insurers, investors and lenders are suing some of the financial institutions being probed in the Libor investigation. But winning these cases won't be easy. Plaintiffs will have to prove that the bank in question successfully manipulated interest-rate benchmarks and that they suffered losses as a result.
Chinese banks may not be as "unsinkable" as they appear. An interim report of earnings from Bank of China implies, among other things, banks are rolling their nonperforming loans into claims on China's shadow financial system.
Financial Times
Deutsche Bank has tightened its bonus rules by adding one that allows the German bank to strip staff of bonuses they earned at previous employers. Industry experts called the rule "unique," but said it "might well turn into a blueprint for rivals." Many global banks have increased their use of existing "clawback rules" recently in an attempt to hold employees accountable for loss-creating behavior.
New York Times
Troubles within Vietnam's banking sector continue as former general director of Asia Commercial Bank Ly Xuan Hai was arrested over the weekend for "for allegedly violating state regulations on economic management leading to serious consequences." The bank's new head Do Minh Toan reported that customers withdrew around 5 trillion Vietnamese dong, or $240 million, worth of deposits last Wednesday, following the arrest of ACB's co-founder Nguyen Duc Kien for unspecified economic crimes.
The paper reaffirms its stance that federal regulators looking to reform the money market fund industry, following the Securities and Exchange Commission's dropped proposal will have to "go down untrodden paths" to do so.
