“Citigroup Inc. Chief Executive Michael Corbat vowed to find an “industrial-strength” solution to the regulatory problems dogging the bank. “Speaking after Citigroup reported better-than-expected first-quarter earnings Monday, Mr. Corbat faced more than a dozen questions from analysts on the bank’s recent failure to win regulatory approval to return capital to shareholders. “Is the Fed denial […]
“A bank’s financial statements don’t measure the health of its children or the joy of their play, the beauty of its poetry or the strength of its marriages, the intelligence of its boardroom debate or the integrity of its executives. Honestly, they barely even measure its assets and liabilities. But JPMorgan is breaking new ground in what measures it […]
(Reuters) – Wells Fargo & Co, the biggest U.S. mortgage lender, reported a higher-than-expected 14 percent rise in first-quarter net profit, as a series of one-time gains helped offset the continued slowdown in its home loan business. Net income applicable to common shareholders rose to $5.60 billion, or $1.05 per share, in the quarter, from $4.93 […]
“A few short years ago, “subprime” was almost an expletive. During the financial crisis, mortgages linked to subprime borrowers – or those with poor credit history – caused devastating losses; so much so that many asset managers declared they would never touch subprime again.” “But the financial world has a short memory, particularly when easy money and innovation […]
“Europe’s two top central banks will on Friday make a joint push to revive an asset class that was vilified for its role in the financial crash in an attempt to kick-start lending to the region’s credit-starved companies.” “In a draft paper seen by the Financial Times, the Bank of England and the European Central Bank call for the easing of “unduly punitive” […]
“JPMorgan Chase reported an 18.5 percent slump in first-quarter earnings on Friday, as the nation’s largest bank grappled with dual challenges: sluggish revenue from trading and lackluster mortgage lending.” “Both issues, broadly buffeting the banking industry, damped profits at JPMorgan.” “The net earnings of $5.27 billion, or $1.28 a share, came in slightly below Wall […]
“A Federal Reserve announcement on Monday that would relax Volcker Rule conformance periods still leaves banks holding collateralized loan obligation (CLO) debt in a quandary. “The Federal Reserve intends to give banks until July 2017, a two-year extension, to divest or restructure their CLO debt falling under Volcker’s “ownership interest” umbrella. Such debt typically back […]
“The U.S. Federal Reserve’s drive to wean Wall Street off risky funding sources is expected to bring more financial pain to the biggest U.S. banks in the coming months, analysts warned on Wednesday. “They said bank regulators’ release this week of tough new limits on debt funding is just a preview of other rules that […]
“In 2009, I went to Washington, D.C., to conduct some interviews about the efforts to reform the banking system that were then under way. These efforts eventually led to the Dodd-Frank bill, which President Obama signed into law in July, 2010. At the time, there was talk of cracking down on the too-big-to-fail banks—restricting some […]
“JPMorgan Chase & Co. Chairman and CEO Jamie Dimon’s total compensation fell 37 percent last year to $11.8 million as the nation’s largest investment bank grappled with billions in legal costs and fines. “Dimon’s total compensation fell from $18.7 million in 2012, according to regulatory documents filed by the bank Wednesday. “JPMorgan’s committee on executive […]
“Jamie Dimon, the chief executive of JPMorgan Chase, has reflected in his annual shareholder letter on a year that was marked by the bank pulling out its checkbook to mend frayed relationships with the federal government — a reconciliation that has already cost around $20 billion. “In his letter on Wednesday, Mr. Dimon emphasized that […]
“Deutsche Bank will ask shareholders to approve raising limits on executive bonuses for 2014 as required by new European rules, according to an agenda for the bank’s annual shareholder meeting to be held on May 22. “European Union rules say that bankers’ bonuses cannot exceed the annual fixed salary, or twice that if shareholders approve, […]
“Bank of America agreed to pay nearly $800 million in fines and restitution to settle allegations of deceptive marketing and unfair billing involving credit card products, U.S. regulators said on Wednesday. “The Consumer Financial Protection Bureau and Office of the Comptroller of the Currency said they had ordered the bank to pay $727 million in […]
“The banking industry is fighting back against recent studies showing the largest companies still enjoy funding advantages because of the perception they are “too big to fail”, which assumes a government bailout in a crisis. “The Clearing House Association, a US bank trade group representing JPMorgan Chase, Citigroup, Bank of America and other institutions, on […]
“In the mid-2000s, Sheila Bair, then the chairwoman of the Federal Deposit Insurance Corporation, fought to retain a rule that would limit the amount of leverage, i.e., the amount that could be borrowed, particularly by the largest American financial companies. Among her most difficult opponents were key people at the Federal Reserve and most of […]
“After the Panic of 1907, bankers and politicians alike sought a more stable banking system, though for different reasons. Despite J. P. Morgan’s ability to harness backing from the Treasury Department when he needed it (and vice versa), he desired a more permanent solution to financial emergencies. The rest of the big bankers concurred. But […]
“Federal regulators on Tuesday approved a simple rule that could do more to rein in Wall Street than most other parts of a sweeping overhaul that has descended on the biggest banks since the financial crisis.” “The rule increases to 5 percent, from roughly 3 percent, a threshold called the leverage ratio, which measures the […]
WASHINGTON—“The eight largest U.S. banks will have to add as much as $68 billion in extra capital to comply with a new rule intended to help firms weather losses during periods of market stress, federal regulators said Tuesday.” “The so-called leverage ratio, approved by the Office of the Comptroller of the Currency, the Federal Reserve […]
“European banks are still lagging behind the U.S. banking industry, which has almost completely recovered from the global financial crisis, Jamie Dimon, chief executive of JPMorgan Chase & Co (JPM.N), told French newspaper Le Figaro.” “Profits may still vary for different kinds of reasons. But if you look at the equity, outstanding loans, debt capacity, you would see the […]
“Tuesday was a good day for capital hawks. “Regulators finalized a rule putting in place stricter funding requirements for the biggest banks and proposed changes to a part of the rule that would toughen the new requirements compared to a version released last year. “The policies advanced on Tuesday stand as clear evidence that Wall […]
Dennis Kelleher, President and CEO of Better Markets, an independent nonprofit organization that promotes the public interest in the financial markets, made the following statement about banking regulators adopting a final rule increasing capital standards for the largest U.S. banks: “Three cheers for the banking regulators who finalized a rule today to increase the capital requirements […]
“US regulators are expected to finalise a leverage ratio rule on Tuesday that is aimed at making it harder for the largest US banks to manipulate their assets to meet capital requirements. “Most bank capital rules are “risk-weighted”, requiring more loss-absorbing equity to be held against riskier loans and securities. But there has been concern […]
“Investors in Fannie Mae and Freddie Mac appear to be building a more vocal and organized support network in Washington weeks ahead of a key Senate vote to consider legislation that would overhaul the companies. “On Monday, a new tax-exempt group calling itself the Coalition for Mortgage Security said it would campaign for legislation that […]
“Politicians of all shades seem united on one thing at least: the need for banks to keep lending. Since the financial crisis, getting credit flowing has been the main goal of financial policy. “And policy makers have pursued it with energy and ingenuity. The Bank of England’s Funding for Lending programme, which gives banks incentives […]
“The Federal Reserve said Monday it will give banks two years of extra time to conform certain debt holdings with the Volcker rule, but stopped short of granting an exception the industry had been seeking. “The Fed said banks would have two additional years to make sure their collateralized loan obligations don’t fall under the […]
“The Federal Reserve is giving U.S. banks two more years to ensure their holdings of certain complex and risky securities don’t put them afoul of the new Volcker Rule. “The Fed’s move announced Monday didn’t give banks an outright exemption for the securities from the Volcker Rule’s ban on high-risk investments. Wall Street banks had […]
“The Federal Reserve on Monday announced a second course correction for last year’s Volcker rule in a move that gives banks more time to divest certain loan-backed securities that are restricted under the proprietary trading ban, but that stops short of providing the changes sought by the industry. “The announcement of a two-year extension, through […]
“Goldman Sachs Group Inc. GS -1.45% delivered its top executive his biggest paycheck in six years. “Lloyd Blankfein, Goldman’s chairman and CEO, received $23 million in salary and bonus for his 2013 performance. He is also eligible to earn another $6 million if the firm hits certain targets over several years, according to a securities […]
“Senior European policy makers and business people have expressed concern that the debate over quantitative easing by the European Central Bank risks taking the pressure off politicians to pursue structural reforms. “Monetary policy cannot do everything,” said a senior ECB official at the Ambrosetti Forum in Cernobbio, on Lake Como, this weekend. “People expect too […]
“Shareholders in Bank of New York Mellon, the world’s largest custody bank, are voicing concern about expenses and executive pay ahead of its annual meeting on Tuesday. “Two top-30 shareholders said they were disillusioned by a failure to keep expenses under control and meet targets on profitability since the company was formed in 2007 from […]
“After years of false starts and stops, the Justice Department is nearing the end of an investigation into the role Credit Suisse played in hiding American wealth offshore. But at the same time, a new investigation is beginning, threatening to entangle the giant Swiss bank for even longer. “The biggest danger to Credit Suisse, suspected […]
“In the coming months, President Barack Obama will have the opportunity to make over the Federal Reserve Board of Governors and put his stamp on the U.S. central bank for years to come.” “Along with naming a new chairman, he will be able to fill as many as four seats on the seven-member board.” “The […]
WASHINGTON — “Jeremy C. Stein, a member of the Federal Reserve’s board who has raised concerns about its stimulus campaign, will resign at the end of May and return to his previous role at Harvard.” “Mr. Stein, who joined the Fed in 2012, needed to return within two years to preserve his tenured professorship.” “During […]
“The Federal Reserve announced Thursday that economist Jeremy Stein is resigning from the central bank’s board of governors after a two-year stint that established him as a leading voice on the unintended consequences of the Fed’s easy-money policies.” “Stein will step down May 28 to return to teaching at Harvard University. He has been on leave from […]
“Bank of America Corp. BAC -0.23% is in discussions to pay more than $800 million to settle allegations it pushed customers into signing up for extra credit-card products, according to people familiar with the talks.” “The agreement with the Consumer Financial Protection Bureau, which could be announced in coming days, would mark the largest federal settlement with a credit-card […]
“Federal Reserve Governor Jeremy Stein, a thought leader on the linkage between monetary policy and financial stability, resigned from his post to return to teaching economics at Harvard University.” “Stein, 53, will leave May 28 after two years as a governor, according to a statement by the Fed today in Washington. His return to Harvard, which doesn’t extend leaves […]
“The European Central Bank has given the strongest signal yet that it is prepared to embrace quantitative easing to prevent the eurozone from sliding into deflation or even a prolonged period of low inflation.” “The ECB ignored calls from Christine Lagarde, managing director of the International Monetary Fund, to immediately deploy exceptional monetary policy measures, such as bond […]
LONDON – “The legal costs keep piling up for Credit Suisse.” “On Thursday, the Swiss bank revised its results again to reflect an additional charge of 468 million Swiss francs, or about $528 million, in increased legal provisions primarily related to a continuing investigation into Americans who secretly held assets in Swiss accounts.” “As a result, […]
“Just as Citigroup was putting a troubled past of taxpayer bailouts and risky investments behind it, the bank now finds itself in the government’s cross hairs again.” “Federal authorities have opened a criminal investigation into a recent $400 million fraud involving Citigroup’s Mexican unit, according to people briefed on the matter, one of a handful of government […]
“More than two-thirds of the gauges on Janet Yellen’s labor-market dashboard are still showing worse readings than before the recession, reinforcing her belief that the economy will need “extraordinary support” from the Federal Reserve for “some time to come.” “Only two of the nine indicators flagged by the new Fed chair — payroll growth and layoffs — are back […]
WASHINGTON—“Bank regulators are turning their focus from balance sheets to boardrooms as they try to forestall the chance of another financial crisis by forcing banks to better understand and manage their own risks.” “The Federal Reserve’s rejection last week of Citigroup Inc. C +0.62% ‘s plan to reward investors stems from this effort to improve management at large, complex banks. […]
“It is Wall Street’s equivalent of a potluck party.” “Several times a week, the world’s biggest banks get together, each bringing something for the rest of the group. But instead of casseroles and cookies, the firms come with swaps and other derivatives they aim to pair with offsetting trades held by another bank.” “Their goal: […]
“Russia has threatened to retaliate against US diplomatic missions after JPMorgan Chase blocked a money transfer from a Russian embassy, in the clearest political fallout so far from sanctions imposed over the annexation of Crimea last month.” “The Russian foreign ministry said JPMorgan had blocked a transfer by Russia’s embassy in Astana, the capital of Kazakhstan, to Sogaz, an insurance company […]
“In an unusual example of co-operation on Wall Street, the biggest banks are working together to tear up billions of dollars worth of derivatives trades as they seek to reduce their use of precious regulatory capital. “Financial reform in recent years has focused on making the trading of derivatives safer by mutualising credit risk through […]
The latest budget blueprint from Rep. Paul Ryan (R-Wis.) again targets several main pieces of the Dodd-Frank financial reform law. “The proposal from the House Budget Committee chairman would repeal a top provision of the law. Proponents say the tool, which gives the Federal Deposit Insurance Corporation the power to step in and wind down […]
“A dozen large investors filed a joint lawsuit against 12 banks for allegedly conspiring to rig global foreign-exchange prices, according to a new consolidated complaint. “The class-action lawsuit, filed in U.S. District Court in the Southern District of New York late Monday, was from a group of investors across the U.S. and Caribbean, including city […]
“John Reed, the former co-chief executive and architect of the modern day Citigroup, said “managerial turmoil” at the sprawling global bank had hindered its ability to secure the Federal Reserve’s approval for its 2014 capital plans. “Having three or four CEOs in the last decade hasn’t helped,” Mr Reed told a conference in Boston on […]
“The community bank furor over the final Volcker Rule highlights a troubling issue: the banking agencies are failing to effectively consult with the majority of banks in rulemakings. “Bank regulators have the challenging task of building public confidence and preventing a future crisis. To do this, they have issued thousands of pages of proposed rules […]
“The world’s largest banks still receive implicit public subsidies worth as much as $590bn because of their status as “too big to fail” and the assumption of a government bailout if they get into trouble, the International Monetary Fund warned on Monday. “The warning, to be included in the fund’s twice-yearly Global Financial Stability Report, […]
“The global investigation into currency market manipulation spread to another major market on Tuesday, with Hong Kong’s banking regulator saying it had opened an inquiry into several banks. “The Hong Kong Monetary Authority, which oversees banks and other financial institutions in the Asian financial hub, said in an emailed statement that it was “investigating a […]
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