Banco Popular de Puerto Rico

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."

Receiving Wide Coverage ...Charges Filed: The Justice Department is suing credit rating agency Standard & Poor's for allegedly ignoring their own standards and rating mortgage investments much higher than they should have been in years leading up to the financial crisis. Per the suit, filed by U.S. Attorney General Eric Holder: S&P "falsely represented that its credit ratings of RMBS and CDO tranches were objective, independent, uninfluenced by any conflicts of interest that might compromise S&P's analytical judgment, and represented S&P's true current opinion regarding the credit risks." According to Dealbook, prosecutors "have uncovered troves of e-mails written by S.& P. employees" that indicate concern over how mortgage investments were being rated. The complaint reproduces an internal instant message written by an S&P employee in April 2007 that reads "We rate every deal. It could be structured by cows and we would rate it."

Receiving Wide Coverage ...And RBS Makes Three: Royal Bank of Scotland has reached a settlement with U.S. and U.K. regulators over its involvement in the Libor rate-rigging scandal. The settlement includes a combined $612 million fine. As previously speculated, RBS' Japanese unit pled guilty to criminal wrongdoing. Per Dealbook, this involves "a single count of felony wire fraud to settle the case." John Hourican, the head of RBS's investment bank, resigned as part of the settlement and his and other investment bankers' bonuses will be clawed back. Tangentially, an FT article, written prior to the formal settlement announcement, reports that U.K. Business secretary Vince Cable plans to "revive a radical plan to return Royal Bank of Scotland to the private sector by distributing free shares to the public," though it's unclear how likely this plan is to be implemented. The settlement makes RBS the third "giant global bank" to settle with regulators over the rate-rigging scandal.