Banco Popular de Puerto Rico

Receiving Wide Coverage ...More Libor: …And our favorite Libor-related read today comes from Boris Johnson, the delightfully disheveled mayor of London. Writing in the Daily Telegraph, Johnson warns, in his inimitable voice, against overreacting to the Barclays scandal, arguing that other industries, such as London’s budding technology firms, need a healthy financial sector to raise capital for them. The Morning Scan cannot resist quoting him at length: “It is time for British politicians to say it loud and clear and in unison: we need bankers, my friends! We need bankers who are not just cautious, owlish Polonius figures. We need bankers who are willing to take punts and put their necks on the line. Yes, by all means arrest anyone who has been involved in a criminal conspiracy to fix Libor. Bang ’em up. Slam ’em away. But we need the political establishment in this country to stop slagging off a sector that is utterly crucial. … We need to maintain or lengthen London’s lead as the best place to raise and allocate that capital, and we won’t succeed in that objective if we keep on bullying, berating and generally beating up anyone who has anything to do with a bank.” If only Johnson’s New York counterpart (and fellow bank defender) Michael Bloomberg were this charming. Johnson also has a funny line in there about corporate sponsorships, which we won’t spoil for you. The comment thread is largely hostile to the mayor’s message, and one of the few Telegraph readers who side with Johnson laments, “Judging from the comments here, the banker bashing politicians have the public mood better than Boris.”

Receiving Wide Coverage ...Peregrine, Shook: This seems to be the week for disturbing, noir-ish financial stories. First there was that director of the failed Georgia bank believed to be on the lam after being charged with fraud and sending colleagues what read like a suicide note. Now Peregrine Financial, a Chicago futures brokerage, has filed for Chapter 7 liquidation, $215 million of customer funds are missing, and its founder, accused by authorities of fraud, has been hospitalized after an apparent suicide attempt. Wall Street Journal, Financial Times, New York Times, Washington Post

Receiving Wide Coverage ...The Fed’s Reserve: In the minutes from the last policy meeting, “Federal Reserve officials sent new signals they are seriously considering more actions to bolster the economic recovery but disappointed many investors by not indicating they are committed to taking action,” the Journal says. The Times and the Post play up the divisions among Fed officials on whether, how and when to act. Wall Street Journal, New York Times, Washington Post.

Breaking News This Morning ...JPMorgan Restates 1Q Profits Lower: The bank "cut its previously reported first-quarter earnings by $459 million, or 8.5%, after revising valuations of some positions in the Chief Investment Office's synthetic credit portfolio." Wall Street Journal

Receiving Wide Coverage ...Assessing the Visa/MasterCard Settlement: Everyone digested news of the Visa/MasterCard settlement over the weekend, weighing who won and lost in the $7.2 billion pact. That $1.2 billion of the deal is attributed to a 10-basis point cut in fees that will expire after eight months shows how much the card companies managed to protect.

Receiving Wide Coverage ...Goldman Sachs: The Journal's lead story says the Wall Street firm is expanding its private bank, with a goal of building up its portfolio of loans to wealthy clients and corporations to $100 billion from $12 billion in March. The subsidiary bank's deposits, also sourced from well-heeled individuals, have grown to nearly $50 billion from a hair over $30 billion in 2009. Chief Executive Lloyd Blankfein tells the Journal that the firm, which converted to a bank holding company to shore up funding during the crisis, is now "looking at the revenue versus the incremental costs, not the sunk costs" of owning a regulated depository and it likes what it sees. Underscoring Goldman's need to find different ways to make money, the firm reported this morning that second-quarter profits slipped 11% as trading volumes and certain assets' values declined. Wall Street Journal, Financial Times, New York Times

Breaking News This Morning ...Bank of America Swings to Profit: And beats analysts' second-quarter estimates. Wall Street Journal, New York Times, Press Release

Receiving Wide Coverage ...(Systemic) Risk Management: In its first annual report to Congress, the Financial Stability Oversight Council branded a handful of industry clearinghouses and utilities — such as CHIPS and the Depository Trust Co. — “systemically important.” Just as a reminder: “important” is not meant as a compliment here. It’s a euphemism for “too big to fail” (which in turn is really a misnomer for “too big to be allowed to fail”). As systemically important financial institutions, these organizations will now be subject to tighter regulation by the SEC and the CFTC, the Journal notes. (Allan Grody writes on BankThink this morning that the scarlet SIFI undermines the case for making the DTC the storehouse for Legal Entity Identifiers, a system of bar code-like numbers that will help global regulators monitor exposures throughout the financial system.) Also in its annual report, the FSOC identified the top threats to American financial stability, including the European crisis, the precarious U.S. fiscal situation, the continued housing slump, and cyber-attacks. Wall Street Journal, New York Times

When we were kids, the bedside poster beckoned with Browning: "Ah, but a man's reach should exceed his grasp, or what's a heaven for?"

Receiving Wide Coverage ...Europe (Again): It might be taking on the sound of a broken record at this point, but the banking-sovereign-cultural crisis that has been wracking the continent for months has reached yet another “first-ever” crescendo. “Spain’s borrowing costs reached a new euro-era high on Monday as fears about the country’s wilting economy and government finances outweighed the eurozone’s approval of loans to help Madrid recapitalise its banks,” reports the Financial Times. Catalonia’s addition to a list of the Spanish regions that may tap aid from the central government in Madrid, spurred Spanish 10-year yields to surge above 7.5% for the first time from a previous peak of 7.285%, according to Bloomberg. “The problem in the region is profound, but the pace that it has been dealt with was slow,” John Stopford, head of fixed income at Investec Asset Management, told Bloomberg. “The bank bailout for Spain is far from sufficient to deal with the country’s problems.” Over in Greece, another showdown is looming with the planned arrival in Athens Tuesday of Greece’s troika of international creditors—the European Commission, the European Central Bank and the International Monetary Fund. “They will face down doubts that the country can meet its bailout commitments and reluctance among euro states to put up more funds should it fail,” Bloomberg reports. German coalition politicians over the weekend torpedoed the possibility of renegotiating the terms of Greece’s agreement. The problems in both countries raise anew questions of whether Europe can shrink its bloated economies back to prosperity—or whether the medicine is making the patients sicker still. “Austerity measures imposed on a frail economy are too pro-cyclical, and the EU’s relaxation of Spain’s deficit target to 6.3% of output this year brings little relief,” writes the FT’s Lex column. “Yet, seemingly the stronger Madrid’s policy responses to Brussels’ commands, the greater the disconnect with investors.” Financial Times, Bloomberg