Receiving Wide Coverage ...
Libor Update: Some big Libor news this Friday morning, courtesy of the Wall Street Journal U.K. and U.S. authorities are preparing to file criminal charges against former Barclays employees for their alleged roles in the London interbank offered rate-rigging scandal. Sources familiar with the matter tell the paper charges are "likely to be filed this summer," but that "the plans aren't finalized and could be delayed or modified." The sources don't appear to be naming names (or specifying what the charges will be), but authorities are believed to be targeting "midlevel traders," not top-tier execs. The article notes "the planned criminal cases indicate that government investigations into Libor manipulation, which have been under way since 2008 and until now have targeted mostly institutions rather than individuals, are moving into a new phase." It also mentions that more legal settlements between regulators and other banks are expected this summer. In other Libor news, the Financial Times' banking editor Patrick Jenkins shares his thoughts on the European Union's push to move Libor out of London and under the oversight of the Paris-based European Securities and Markets Authority. "Esma
may not have the power or resources to intervene directly, according to one U.K. official," he writes. "Even if these proposals ever materialize as rule changes, it seems the consequences will be largely symbolic and political rather than material."
A Volatile Bond Market: Here's another reason to pay close attention to the jobs report released this morning: "[It] will be a harbinger for how bonds trade during the rest of the month," one analyst tells the FT, as the Federal Reserve has tied its monetary policy of low interest rates to economic data. Scan readers will recall there's been some worry on Wall Street that the Fed may begin to taper off its bond-buying program this month since there have been mixed messages from central bankers. "A sharp fall in bond prices has sent investors scurrying to protect themselves amid fears that rising interest rates will put an end to decades of strong returns," the Journal notes in a story similar to the FT's. "A spate of coming bond deals hangs in the balance, as corporate treasurers and chief financial officers await clarity about how much they may pay to borrow."
Expanded: French prosecutors have widened their probe into whether the French unit of UBS solicited French customers to open Swiss banks accounts that would let them evade taxes. The investigation now includes the parent company UBS AG. The bank says it "will continue working with the authorities in France within the applicable legal framework to arrive at a resolution to this matter." Wall Street Journal, New York Times
Wall Street Journal
The Commodity Futures Trading Commission and Securities and Exchange Commission have filed separate lawsuits against stock-betting website Banc de Binary. The lawsuits allege the website was "illegally offering options to U.S. customers without registering with U.S. regulators" and continues "a crackdown on offshore trading platforms that operate online."
Financial Times
Testimony given during a New York State Supreme Court hearing on whether the $8.5 billion settlement Bank of America reached with investors over soured mortgage investments should be approved alleges the banks' executives and lawyers were hostile during mortgage talks.
As cybercriminals get savvier, "the question of how major banks and the U.S. government ought to be coming to grips with cybercrime together is still a work in progress."
New York Times
The British government is facing a difficult task in reducing its holdings in bailed out banks Royal Bank of Scotland and Lloyds Banking Group. "The two banks are still cleaning up their balance sheets and selling off unwanted assets that could put off new investors," the article notes. "And the timing of any share sale, which could come as early as next year, may lead to losses for British taxpayers potentially angering voters."
Economist Simon Johnson is not impressed with the Business Roundtable's efforts to get Congress to include big banks in any potential new trade agreement with Europe. "The implication
is that the U.S. should tie itself more closely to European banking practices, on capital and regulation more generally," he writes. "The idea that the U.S. should associate itself more closely with this completely failed approach to bank regulation boggles the mind."
