Receiving Wide Coverage ...
Germans, French to Work Together: German Chancellor Angela Merkel and French President Nicolas Sarkozy "called for closer European coordination in setting economic policy and new steps to discipline governments whose lax budget practices prompted the debt crisis," the Post reported. Shortly afterward Federal Statistical Office of Germany released a report saying the German economy has been at a standstill for the past three months. Sarkozy and Merkel agreed to work toward a greater economic integration of the euro zone, and in particular called for all euro zone nations to legally bind themselves to working toward balanced budgets, the Times said. But the two leaders decided against issuing Eurobonds, and also opposed increasing the size of the European bailout fund. The Journal noted the pair suggested tapping "European Council President Herman Van Rompuy as euro-zone chief, but gave no indication that he would wield much power." Wall Street Journal, New York Times, Washington Post
Wall Street Journal
A big gap in the cultures of Google and Motorola could be problematic and the two companies' employees "will have to get used to each other."
After nearly three years, Seacoast Banking Corp. of Florida has started paying a 5% dividend to the government on the preferred stock it gave the U.S. for a $50 million loan under TARP. One of 163 banks that deferred the dividend, Seacoast is one of six banks that missed nine payments, with only Saigon National Bank of Westminster, Calif., missing more. "Seacoast missed a total of $5.6 million in payments. On Monday, it sent the Treasury Department a check for the full amount plus the current quarterly dividend payment of $625,000," the paper reported.
Former Federal Reserve Board Vice Chairman Alan S. Blinder wrote that he's more concerned about the recent FOMC meeting than the Standard & Poor's downgrade. His interpretation of the recent FOMC statement: "Yikes! Things have sure deteriorated quickly!"
New York Times
Swiss banks are still helping wealthy Americans dodge taxes, in spite of efforts by U.S. officials to crack down on the industry. An editorial urges the U.S. to keep pushing banks in Switzerland to hand over their files and close the accounts.
Community bankers say federal regulators are nitpicking in their examinations, at a time when the industry is struggling to recover. Further, regulators misunderstand the problems behind the struggles of community banks.
A post in the "Bucks" blog looks at ways banks have ramped up charging of overdraft fees, but the real value is in the comments section: "The best solution to big bank overdraft fees: Close your account and move to a credit union." "You do know that banks have to pay their employees, for the lights, rent, insurance, computers, etc.? Where do you think they get that money? Right. From fees and interest charged on loans. If you don't want to use a bank, don't. If you do, be willing to pay for the service you receive. And stop whining!" And so on.
Banks (investment and retail) are becoming less important, and technology will allow them to slash staffing levels, law professor Frank Partnoy wrote in an Op-Ed piece that has drawn quite a bit of attention. He is not alone in that belief. He writes that banks are in the capital allocation business and compares them to other service providers, such as Google. Chris Skinner at the Finanser blog suggests that Apple may be the best model, "Apple has stores. They have cool stores. They have genius bars for advice. They have great staff and highly automated point of sale. They are engaging in store and online. Their user experience is second to none."
Citibank has had a public relations disaster in Indonesia after a businessman collapsed and died following a questioning session at offices in Jakarta last March. The bank's internal investigation found no wrong-doing, but the incident it has tarnished the bank's reputation and "cast a spotlight on a dark corner of international banking — the outsourcing of debt collection to unregulated agents in booming but unruly emerging markets. "
Will the government keep a large role in mortgages? Of the three proposals for housing finance reform that were presented last February in an administration white paper, the third one, in which the government plays a bigger role, might be under serious consideration according to this story. It said Obama has "directed a small team of advisers to develop a proposal that would keep the government playing a major role in the nation's mortgage market, extending a federal loan subsidy for most home buyers, according to people familiar with the matter." However the official White House stance quoted was: "it is premature to say that senior officials have agreed on any of the three main options." The piece said it is possible that Fannie and Freddie might have some future role, albeit in a greatly transformed manner.
In response to the above story, Treasury Deputy Secretary Neal S. Wolin wrote on the agency's website that he wanted to set the record straight: "The Obama Administration believes that the private sector — subject to strong oversight and consumer protection — should be the dominant provider of mortgage credit." He also said that the "Post article also makes a factual error in suggesting that the Administration has settled on a single proposal for the long term structure of the housing finance market."
And Lastly ...
We feel compelled to remind you that The Onion is a satirical newspaper before we direct you to an article entitled "Visa Exposed As Massive Credit Card Scam."
And we're sure the worst part of it for Visa is that the jokers refer to the company as a "lender," given the great lengths the world's largest payment network has gone to explain to the public that it merely runs the rails for transactions and does not issue credit.
But we kind of figured that was a losing battle last year when we heard this rap lyric: "Known to rock the finest [clothes] and eat the best pizza/Charge that [stuff] to MasterCard, already owe Visa" (emphasis is ours, and if you want to hear the uncensored version, plug in your headphones so as not to offend your coworkers and click here).