Banco Popular de Puerto Rico

Receiving Wide Coverage ...Bank of Japan Fights Deflation: The Bank of Japan took steps toward a "monetary regime change" this Monday, announcing plans "to enact an ambitious program of further monetary easing" and raise its inflation target to 2%. The plan is intended to end "years of corrosive deflation" and was enacted under pressure from Japan's new Prime Minister Shinzo Abe. It involves (and this will sound familiar) "open-ended" asset purchases and a near-zero interest rate policy "as long as it is deemed necessary to achieve its price target." Asset purchases, however, are not set to begin until January 2014. The delay is one reason some analysts are ambivalent about whether this move will help curb deflation and bolster the economy. And, according to the Post, "popular magazines are already forecasting an 'Abe bubble' in share and real estate prices, driven by the money being pumped into the economy through government spending and monetary easing."

Receiving Wide Coverage ...Highlights from Davos: The World Economic Forum just began in Davos, Switzerland, but has already produced plenty of interesting news for bankers. According to the FT, preliminary buzz around the event is that arriving executives "are plagued with concerns about growth, restive shareholders and declining margins." The article goes on to note that Goldman Sachs CEO Lloyd Blankfein is attending the event for the first time since 2008, though it's unclear how he specifically feels about his bank's balance sheet or the "fractious relationships with shareholders" the FT suggests is collectively percolating among top execs. JPMorgan CEO Jamie Dimon, who spoke earlier this morning, however, may have inadvertently nodded to investor concerns when he dropped this qualified apology for the London Whale: "If you're a shareholder might I apologize deeply. But we did have record results and life goes on." He also went on to criticize regulators, saying "It's five years after the crisis OK, we still have not fixed a lot of the things you are talking about. Part of the reason we are trying to do too much too fast." Meanwhile, a Dealbook article criticizes the forum itself for not devoting enough of its agenda to dissecting the financial crisis. "The World Economic Forum and its leaders appear to be moving on," the author writes. "but if the financial titans gathered there are really going to fight off the small but growing number of critics who are calling for the breakup of the big banks or even more likely a stronger Volcker Rule, they should put forth an alternative or an explanation for why these blowups keep occurring."

Receiving Wide Coverage ...Cuts, Cuts … and More Cuts: Banks continue to downsize staff. According to three separate reports from the Financial Times, Commerzbank plans to cut between 4,000 and 6,000 jobs through 2016 in order to turn around its underperforming domestic retail business; UniCredit plans to cut 1,000 jobs at its German unit HvB by 2014 for similar reasons and Lloyds Banking Group is adding another 940 positions to previously announced job cuts set to take place "across the group" as part of a cost saving program. Meanwhile, the Journal reports the Barclays investments unit job cuts, mentioned in yesterday's Scan, are taking place in Asia. Reports of layoffs at big banks, unfortunately, have become a theme of late. Earlier this month, news broke that Amex was set to eliminate 5,400 jobs, or 8.5% of its staff. Citigroup and Morgan Stanley have also made moves to reduce staff recently.

Receiving Wide Coverage ...The Enforcers: Reaction to President Obama's nomination of former prosecutor Mary Jo White as the new head of the Securities and Exchange Commission is a bit of a mixed bag. While headlines acknowledge the pick sends a message to Wall Street — as White is a former top prosecutor and defense lawyer with an impressive (and aggressive) record — their accompanying stories also point out she lacks knowledge of Wall Street arcana. "Regulatory chiefs are often market experts or academics," Dealbook notes. "The gaps in her résumé could complicate Ms. White's agenda in the face of fierce Wall Street lobbying." CNN senior editor Stephen Gandel echoes this sentiment, labeling White "the right woman at the wrong time" and pointing out that, while she might help to change the perception that the SEC was soft on Wall Street crime, she's unlikely to focus on regulating key areas of the market, like high-frequency trading. "What we need now, it seems, is someone who can lay down the rules, still not finalized from Dodd-Frank, that will not just hopefully limit Wall Street malfeasance but its propensity for stupidity as well," Gandel writes. And the Journal points out there's a potential glitch in White's resume: her prior representation of top Wall Street firms, including JPMorgan Chase and Morgan Stanley, while serving as a defense attorney with Debevoise & Plimpton LLP. "Obama administration ethics rules would bar Ms. White for two years from working on certain matters involving her former law firm or any clients handled in the prior two years," the article notes. "That might affect enforcement cases in particular."

Receiving Wide Coverage ...Advice for Mary Jo White: "Making Them Pay (and Confess)" is what the Times' Gretchen Morgenson would like to see from White, President Obama's nominee to head the SEC. In other words, the columnist wants White to kick the SEC's habit of allowing companies to settle charges by paying fines without admitting fault. The Post notes that the agency lacks some of the awesome powers of White's former employer, the Department of Justice. The SEC can't brandish threats of jail time, wiretaps, search warrants, undercover operations or grand jury probes. But it has other strong enforcement tools at its disposal, such as issuing damning reports on individuals and barring them from serving as corporate directors and officers. "Even if White wanted to devote all her energies to enforcement, there will be other and perhaps more pressing regulatory matters before the agency, including putting in place the sweeping regulations heaped on the agency by the Dodd-Frank Act," the article says. It also notes that unlike at the U.S. attorney's office in Manhattan, White will be overseeing unionized attorneys and answering to a five-person commission.

Receiving Wide Coverage ...Submissive on Pay: The Treasury Department failed to rein in outsize executive pay at some of the biggest bailed-out companies last year, according to a report published Monday by the special inspector general of the Troubled Asset Relief Program. Treasury officials awarded 63% of the 25 highest-paid employees at Ally Financial, AIG and General Motors total pay packages in 2012 that topped the median pay for executives at similar companies by more than $37 million. The Journal observes that Treasury previously rejected the watchdog's criticism and declined to institute policy changes on pay, "a sign the report might not crimp the future pay packages of GM and Ally Financial executives." The Treasury recently sold its remaining shares in AIG, so the company no longer has to submit its pay packages for approval. The Times echoes the point, noting that a report by the inspector general in 2012 "made similar criticisms." The Washington Post also picks up the thread, noting that Monday's report evaluates Treasury's actions since last year "with stinging allegations of lax oversight and supervision."

Receiving Wide Coverage ...Big Payday: The best-paid financial-services CEO in 2012 was not Lloyd Blankfein or Jamie Dimon but Richard Handler, of the lesser-known investment bank Jefferies Group. He took home $45 million (or $58 million if you count shares he received) after making a deal to sell Jefferies to the industrial smorgasbord Leucadia National, which he'll run. The Journal's story is meaty, highlighting the board's use of peer comparisons in determining Handler's compensation after scrapping that practice the year before. The papers note that Jefferies, bucking the industry trend, pays its bonuses all-cash, up front, rather than deferring them or paying in stock — though according to the FT, "some said the cash bonuses were paltry compared with pay at other banks. Employees must pay the cash back if they leave for one of Jefferies' competitors." Wall Street Journal, Financial Times

Receiving Wide Coverage ...Economy Contracts: Private-sector demand was strong, but businesses reined in inventories and defense spending plummeted, leading to a surprise 0.1% contraction in economic activity in the fourth quarter, according to the Commerce Department's first estimate. The Journal said analysts pinned the plunge in military spending on factors like the drawdown in Afghanistan and worries that more reductions are coming. The Post said government agencies "began adopting contingency plans, instituted hiring freezes and delayed projects in anticipation" of automatic cuts under the sequester. Markets appeared to take the outturn in stride, as the S&P 500 closed down by just 0.39%. Wall Street Journal, New York Times, Washington Post

Receiving Wide Coverage ...Executive Pay: Morgan Stanley's CEO is receiving a higher base salary and performance-related bonus but an overall pay cut. Barclays' CEO is giving up his bonus this year to avoid "unnecessary public debate." If that were the only issue, we'd take the dough, and you could debate us all you like. Then again, Barclays has other things to deal with … like allegations that during the crisis it made an undisclosed loan to Qatar to purchase the bank's own shares so it wouldn't need a bailout. Oddly, the "unnecessary debate" line disappeared from this story after we hit refresh — the updated version emphasizes more penitent remarks, e.g. it's "only right" that he turn down a bonus given the scandals that preceded his arrival. But we know we weren't hallucinating, because Britain's Sky News has the "debate" quote in their headline.

Receiving Wide Coverage ...The Electric Ring Fence: Would the threat of a break up keep big banks from violating the law? U.K. regulators appear to believe so as they are set to announce new powers today that will give them the authority to break up banks that flout ring-fencing rules in their Banking Reform Bill. "In America and elsewhere, banks found ways to undermine and get around the rules," U.K. Treasury chief George Osborne is expected to say in a speech later today. "We could see that again — so we are going to arm ourselves in advance. In the jargon, we will 'electrify the ring fence'." News of the regulators' plans has already received pushback from bankers, with one unnamed senior banker telling the FT Osborne was "playing politics with the economy."