Receiving Wide Coverage ...
Too Big to Tolerate: This morning’s Journal includes an op-ed by Warren A. Stephens, the head of the investment bank Stephens Inc. For decades his firm and family long supported the establishment of interstate and national banks (and invested in merger-bait institutions), but now he appears to regret having helped created a monster. Despite what Stephens and others once thought, “banks that are national in scope are no more immune to financial and capital problems than regional banks,” he writes. And unlike regionals, national banks that get into trouble can threaten the whole U.S. economy. Stephens calls for the maximum share of nationwide deposits any one bank can hold to be lowered to 5% from the current 10%, with no grandfathering; any bank above that cap would have to be broken up. He also wants commercial banks out of his business, complaining that “the large integrated banks have exercised undue influence over corporate executives by pressing them to use their investment banking services to retain access to the bank's commercial lending services.” Meanwhile, in her Sunday Times column Gretchen Morgenson interviews former Fed Governor Kevin Warsh, another big-bank critic. He stops short of advocating break-ups, but calls for stronger disclosure requirements for the megabanks. Most interestingly, Warsh questions whether the U.S. ought to be working on capital standards with all of the Basel committee countries, since a number of them explicitly stand behind their largest banks and thus have less motivation to demand thick capital buffers. Rather, maybe we should work exclusively with countries that don’t (at least officially) consider financial institutions too important to be allowed to fail, and thus a greater impetus to insist on “market discipline and real capital levels.”
Wall Street Journal
“Heard on the Street” looks at mortgage subsidiaries’ performance in big banks’ first-quarter results and finds the sector is now
Another “Heard” item says activist shareholders making a stink about executive pay on both sides of Atlantic are
Corporate America is
Financial Times
Speaking of undulating playing fields, the FT reports that big investment banks want to prevent smaller rivals from exercising their newfound powers under the JOBS Act to publish research about clients ahead of stock offerings. The Wall Street giants aren’t sure
But big institutions sometimes help out their smaller brethren, too — at least when there are investment banking fees to be had. Another FT story says large banks are planning to structure “
New York Times
The “Room for Debate” section features a discussion of