Receiving Wide Coverage ...
Basel: Following U.S. regulators' delay in implementating Basel III, the Journal presents two different views on the international capital standards' applicability in this country. In the "Heard on the Street"
Exonerated: A federal jury rejected SEC fraud charges against Bruce Bent and his son, the former managers of the Reserve money market fund, which "broke the buck" during the 2008 panic.
Jefferies Sells: The investment bank Jefferies Group agreed to sell itself to the conglomerate Leucadia for $2.5 billion. The FT frames the story as one of capitulation (headline: "Jefferies loses autonomy in $3.6bn deal"). The deal "is likely to set off a wave of speculation about the prospects of other independent investment banks that fund themselves in the capital markets," the paper says, noting that it follows KBW's agreement to sell itself to Stifel. "The experience of these independent investment banks – so-called because they are not part of bank holding companies – confounds predictions they would benefit from the tighter regulation of larger competitors that followed the Dodd-Frank regulatory reforms of 2010." But Times columnist Peter Eavis notes that at 1.2 times tangible book value, Leucadia's offer is well above the market's valuation for Goldman Sachs or Morgan Stanley. This, he writes, "suggests that the government's soft-handed approach to the 'too big to fail' problem may be working. Instead of forcing size explicit limitations on large banks, the overhaul focused on rules that effectively gave financial firms incentives to opt for simpler businesses and avoid excessive growth. A simple, small balance sheet meant Jefferies could sell itself for a premium price." The Journal says joining the Leucadia family – a smorgasbord of businesses involved in real-economy activities like meatpacking, plastics and timber – will give Jefferies "access to a steady river of cash that could ease concerns about the company's access to volatile funding markets" after a scare last year over the brokerage's European sovereign debt exposure.
Financial Times
"Inside Business" columnist Patrick Jenkins notices a
New York Times
"White Collar Watch" columnist Peter J. Henning takes stock of