Banco Popular de Puerto Rico

Receiving Wide Coverage ...Here Come the Regulators: A few Times articles echo a sentiment the FT's Tom Braithwaite alluded to earlier this week: A healthy earnings season may serve as the go-ahead for more big bank regulation in the U.S. "In recent weeks, the Treasury Department, senior regulators and members of Congress have stepped up efforts intended to make the largest banks safer," a Dealbook article notes. "The banks have warned that more regulation could undermine their ability to compete and curtail the amount of money they have to lend, but the strong earnings that came out over the last week could undercut their argument." Economist Simon Johnson believes that high profits signal danger for the megabanks. "In Europe, regulation remains weak, and the banks are floundering," he writes in a Times column. "In the United States, the rules are tightening, and the big banks are doing great. Once American politicians and regulators reflect further on exactly why the banks have become so profitable, this will only reinforce the latest push for more reform." Elsewhere, the Journal profiles the Federal Energy Regulatory Commission, which slapped Barclays with a big fine for alleged energy market manipulation earlier this week and is currently negotiating a settlement in a similar case against JPMorgan Chase. "Some people familiar with its enforcement operations think the commission is just getting started as it scrutinizes the once obscure world of electricity trading," the paper reports. Dealbook, meanwhile, notes that the industry-financed Financial Industry Regulatory Authority is moving to determine whether high-frequency trading firms pose a threat to the stability of financial markets. Finra "sent letters to 10 high-speed trading firms this week, asking them for more information about their trading programs and the steps they have in place to avert 'market disruptions,'" the paper reports.

Receiving Wide Coverage ...Happy Anniversary, Dodd-Frank: The Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law three years ago Sunday, and to mark the anniversary, the Washington Post reports on the progress of the financial regulation overhaul. "Federal watchdogs were tasked with writing 398 rules to flesh out the law, but they have missed 62 percent of the deadlines set by Congress," the Post says.

Receiving Wide Coverage ...Warehouse Probe: The Commodity Futures Trading Commission is examining the warehouse operations used by Goldman Sachs and others for the storage of aluminum that has inflated prices to consumers, the New York Times reports Tuesday. The operations were the subject of a Times story Sunday. The CFTC has told Goldman and other firms to hold on to internal documents and emails, hardly a good sign. The Journal weighs in, claiming banks have retreated from physical commodities markets even as Goldman, JPMorgan Chase and Morgan Stanley are cited for buying up oil pipelines, metal warehouses and power plants. A Senate committee is holding a hearing Tuesday on bank ownership of commodity assets, raising concerns that loose regulations have allowed banks to control the storage and shipment of commodities. The question is whether such activities pose a risk to the financial system. Senior officials at the Federal Reserve have discussed with bank executives whether to bar them outright from owning physical commodity assets, the Financial Times says.

Receiving Wide Coverage ...SAC Sacked: Federal prosecutors are expected to announce criminal charges this week against hedge-fund giant SAC Capital Advisors for alleged insider trading, the papers are reporting through anonymous sources. The Times says such a charge would likely be a "death blow" to the firm already saddled with government investigations, potentially causing trading partners like Goldman Sachs and Morgan Stanley to pull out. The papers also focused on the firm's founder, Steven A. Cohen, who is not expected to be charged by prosecutors in the multiyear probe. But fear not. Cohen is scheduled to face off with the Securities and Exchange Commission in August for not properly overseeing two traders charged with insider trading. Perhaps he would have known had he read his email.

Receiving Wide Coverage ...U.S. Versus SAC, Tourre: Papers remain focused on the ongoing civil trial of former Goldman Sachs trader Fabrice Tourre and the expected insider trading criminal charges against hedge-fund giant SAC Capital Advisors, which could be filed any minute now. Dealbook's latest article on the SAC charges says "the marshaled might of law enforcement," which includes representatives from the Securities and Exchange Commission, the FBI, postal inspectors and the Justice Department, "signaled that the government was no longer interested in just monetary settlements." And the Journal echoes a sentiment from an earlier Times article: the charges could mean the end of SAC. "No major financial firm has survived a criminal indictment," the paper notes. As for the Tourre trial, the sometimes "Fabulous", sometimes "Breezy" former trader took the stand for the first time Wednesday. Per Dealbook, "Tourre seemed exasperated on the stand, and at one point during the questioning, tipped over the water container on the witness stand while reaching for a document." He also admitted that an email he sent to a key player in the investment deal at the heart of the case was "not accurate," which, based on some verbal sparring that took place between him and the prosecutor, is apparently different from being "false." Legal experts tell the Washington Post that Tourre's testimony, expected to continue today, "could make or break his case."

Receiving Wide Coverage ...Democrats Rally for Yellen: Roughly a third of Senate Democrats reportedly have signed a letter urging President Obama to appoint Federal Reserve Vice Chairman Janet Yellen as successor to Fed chairman Ben Bernanke. The Journal and the FT were not able to say exactly who or how many senators have signed the letter, which is being circulated by Sen. Sherrod Brown of Ohio. Sens. Dianne Feinstein and Tom Harkin say they've signed. Meanwhile, the Times and Barron's explore the gender politics between frontrunners Yellen and Lawrence Summers, Treasury Secretary during the Clinton administration. Both discuss the Obama administration's lack of women in top economic positions, while Barron's Greg Valliere calls Summers "famously prickly."

Receiving Wide Coverage ...Targeting Barclays: The U.K. Treasury is expected to give the "cash-strapped' Serious Fraud Office £2 million in special "blockbuster" funding so that it can continue a probe into Barclays' fundraising efforts five years ago, the FT reports. "The SFO's director, David Green, negotiated a similar arrangement for the agency's sprawling investigation into Libor manipulation, in which Barclays is also a target," the paper notes. Regulators have been looking into "certain commercial arrangements" the bank made with Qatar Holdings back in 2008, but the funding seems to indicate the probe is "escalating". Barclays declined to comment on the investigation. Meanwhile, the bank did say that it would "update the market" as to how it plans to fill a capital gap during its earnings call on Tuesday. Anonymice previously told the Journal and the FT that the bank was considering issuing fresh equity and selling convertible bonds, among other things, to meet its estimated £7 billion shortfall.

Receiving Wide Coverage ...JPM Energy-Market Allegations: The Federal Energy Regulatory Commission released a two-page document on Monday, detailing its (already widely reported) accusations against JPMorgan Chase for energy-market manipulation. Per the Journal, "the document describes several trading schemes, including submitting bids that 'falsely appeared' attractive to electricity-system operators and led to payments to the bank valued at 'tens of millions of dollars at rates far above market prices.'" The FT notes the allegations "echo the electricity-market manipulation schemes perpetrated by Enron, the bankrupt energy company." The allegations are expected to precede a formal settlement announcement, which could come essentially any minute now. Papers must be talking to different anonymice because estimates of the settlement's cost vary. The Journal pegs the associated fine to be "roughly $410 million." Dealbook says the settlement "could cost the bank as much as $500 million" and the FT estimates the settlement to be "about $400 million", which would be lower than the fine FERC levied against Barclays earlier this month. JPM was declining to comment on the allegations on Monday. American Banker readers will recall the bank announced plans on Friday to sell or spin off its physical commodities unit, ahead of increasing regulatory scrutiny.

Receiving Wide Coverage ...JPM, FERC Update: Very shortly after yesterday's Scan, JPMorgan Chase, as predicted, formally settled with the Federal Energy Regulatory Commission over energy market manipulation allegations. Kudos to the Journal for nailing the amount of the fine associated with the widely anticipated settlement in an earlier report on the matter: $410 million. Dealbreaker, however, gets the credit for best explanation of the settlement agreement. A choice quote from the blog post by Matt Levine: "FERC built a terrible box, and the box had some buttons that were labeled 'push here for money,' and JPMorgan pushed them and got money." JPM didn't admit or deny any violations as part of the settlement and individual traders, including commodities head Blythe Masters, were exempt from separate punishment. The bank's official statement on the matter, per the FT: "We're pleased that this matter is behind us. Due to reserves previously set aside, this settlement will have no material impact on earnings." Meanwhile, the Times' Dealbook predicts JPM will pay to settle further U.S. inquiries. "Its new and conciliatory approach — a departure for the bank and its leader, Jamie Dimon, who generally has taken a hard line with the authorities — is yielding mixed results," the article notes. "Government officials, stung by the bank's past displays of hubris, may drive up the price of settlements or resist the overtures altogether."

Receiving Wide Coverage ...Sideswiped: A federal judge has overturned the Federal Reserve's rule on debit card swipe fee caps, effectively stating that the central bank had set the caps too high. In the decision, the judge said the Fed's rule, which caps fees charged to merchants whenever a customer uses a debit card at 21-cents a transaction, "runs completely afoul of the text, design and purpose" of the Durbin amendment, the Dodd-Frank provision that called for the fee limits in the first place. "The decision likely will force the Fed to slash the fees, further crimping a once-lucrative business for banks and card giants," the Journal notes. But changes won't be immediate. The judge plans to give the Fed some time to develop new rules (the exact length to be determined at a later date, though he did say the process should take "months, not years") and the central bank may appeal the ruling. No word yet on whether or not it will. A spokeswoman for the Fed told a few news outlets that the central bank is reviewing the judge's decision. The Washington Post cites Guggenheim Partners' prediction that "the current fees will remain in place through 2014 or even longer." The decision is the latest instance in which a legal ruling has caused delays for regulators trying to enforce provisions of Dodd-Frank, but it is a bit unique. "Courts have struck down other aspects of the financial overhaul, but in ways that favor banks," the Times notes. "The fight over debit card fees pits the powerful industries of retailing and banking against each other."