(Reuters) – U.S. securities regulators are considering testing a proposed reform that could drive business to major stock exchanges and away from alternative trading venues such as “dark pools” that critics say may be hurting investors by reducing the quality of pricing. The proposal, which has so far only been discussed among staff involved in policymaking at […]
(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 […]
“In the span of a week, Steven A. Cohen’s investment firm changed its name, hired a former federal prosecutor and became a felon.” “Breaking months of suspense, a federal judge on Thursday approved the firm’s plea deal that resolved criminal insider trading charges and required a $1.2 billion penalty, closing a searing chapter in the 22-year […]
“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” […]
Several of the world’s largest asset managers are discussing the creation of a joint equity trading venue, in an attempt to end the technological arms race sparked by high-frequency trading firms. Fidelity, the Boston-based manager with $1.9tn under management, has sounded out rivals about routing their share trades through a central venue that would rival […]
“A US regulator has warned that cyber criminals could be impersonating bank services or stealing users’ online banking passwords after the “Heartbleed” bug, called one of the most significant breaches of internet security ever, was discovered in the software used to secure two-thirds of the web.” “The Federal Financial Institutions Examination Council said on Thursday that banks using […]
“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 […]
“Rube Goldberg: A comically involved, complicated invention, laboriously contrived to perform a seemingly simple operation.” “— Webster’s New World” “Dictionary” “Stock markets used to be relatively simple operations. People interested in buying or selling shares gathered in a particular place and traded with one another.” “Those days are long gone. Now, in the United States, the […]
“The U.S. Commodity Futures Trading Commission would face limits on its ability to impose rules on derivatives traded overseas and on manufacturers that use swaps to hedge business risks under bipartisan congressional legislation curbing the scope of the agency’s powers. “Republicans and Democrats on the House Agriculture Committee, which has jurisdiction over the CFTC, introduced […]
“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 […]
“Bruce Karpati, a former Securities and Exchange Commission official, is joining the giant private equity firm Kohlberg Kravis Roberts & Company as its chief compliance officer, a person briefed on the matter said on Wednesday. “Mr. Karpati, who left the S.E.C. last year for Prudential Investments, is expected to start his new job later this […]
“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 […]
“ U.S. Sen. David Vitter (R-La.) today announced that he will place a hold on the nomination of Sharon Bowen, acting chairman of the Securities Investor Protection Corporation (SIPC), to the be Commodity Futures Trading Commission (CFTC). Bowen’s nomination was passed out of the Senate Agriculture, Nutrition and Forestry Committee this morning and will now come […]
WASHINGTON—“A Senate panel on Tuesday approved President Barack Obama‘s three nominees to the Commodity Futures Trading Commission, advancing their nominations to the full Senate.” “The panel acted by voice vote on the nominations of Timothy Massad, a senior Treasury Department official tapped to head the five-member CFTC, and Sharon Bowen and J. Christopher Giancarlo for two commissioner […]
“The Senate Agriculture Committee on Tuesday approved the nomination of Timothy G. Massad, a former corporate lawyer, as chairman of the Commodity Futures Trading Commission, one of Wall Street’s toughest watchdogs.” “The Senate committee also approved the nominations of Sharon Y. Bowen and J. Christopher Giancarlo as commissioners. The three now await full confirmation by […]
“Attorney General Eric Holder maintained Tuesday that he has a “vast amount” of discretion in how the Justice Department prosecutes federal law.” “Holder’s remarks, during testimony before the House Judiciary Committee, came in response to GOP accusations that he is flouting the law with his department’s positions on marijuana legalization, criminal sentencing and a contentious […]
“A textbook retirement speech blends beloved anecdotes with tired clichés. James Kidney, a trial lawyer at the Securities and Exchange Commission who recently departed the agency, offered a different style: an airing of grievances.” ‘Mr. Kidney’s farewell remarks – he pointedly criticized colleagues for “tentative and fearful” actions and implied that the S.E.C. “polices the broken […]
“A trial attorney from the Securities and Exchange Commission said his bosses were too “tentative and fearful” to bring many Wall Street leaders to heel after the 2008 credit crisis, echoing the regulator’s outside critics.” “James Kidney, who joined the SEC in 1986 and retired this month, offered the critique in a speech at his […]
“Before today, I had never heard of Jim Kidney. And I certainly hope this isn’t the last time I do.” “Kidney, a longtime trial attorney for the Securities and Exchange Commission, delivered a barnburner of a going-away speech at his retirement party last month, which has only just begun to make the rounds publicly. Thanks to the union that […]
“Here’s the best story you’ll read today out of Wall Street or Washington: Robert Schmidt’s Bloomberg News scoop on a retiring Securities and Exchange Commission trial attorney who used his farewell speech to scold his former bosses for being “tentative and fearful” when it came to going after top executives in the wake of the 2008 financial […]
“FINRA embarked on the effort by asking Wall Street to submit comments and data about current rules on advertising andmarketing, as well as those for gift-giving, according to the notices.” “Among the details FINRA wants to know is whether the rules have addressed problems they were aimed at resolving and if any of them include ambiguities.” “FINRA’s […]
“Goldman Sachs Group Inc. GS +1.16% is considering shutting down one of the world’s largest private stock-trading venues, according to people familiar with the matter.” “In conversations with market participants over the past several months, Goldman executives have broached the subject of closing its so-called dark-pool trading operation, known as Sigma X, the people said.” “Goldman executives are weighing […]
“Preet Bharara’s March 31 speech was little noticed outside a small gathering of legal and compliance executives in Manhattan. He delivered it on the day Wall Street and the financial news media were obsessing over the contention in Michael Lewis’s latest book that high-frequency traders have “rigged” the stock market.” “In the speech, Bharara, the U.S. […]
“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 […]
“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 […]
“Bob Diamond was three years ahead of his time. When the former head of Barclays told a parliamentary committee in January 2011 that the “period of remorse and apology . . . needs to be over”, he caused a stink. Politicians lambasted his arrogance, commentators said he was out of touch and, within 18 months, he had […]
“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 […]
“Two weeks ago, Daniel E. Pinto was named the sole chief executive of JPMorgan Chase’s sweeping corporate and investment bank. Now, he is leaving his first major mark on the unit. “Mr. Pinto announced a number of executive shifts within his division on Monday, according to an internal memorandum reviewed by DealBook. The moves will […]
“In the world of financial trading, a front-runner is someone who gains an unfair advantage with inside information, including access to a high-speed transaction network revealing specific trades other people are trying to make. “Flash Boys,” Michael Lewis’s new nonfiction thriller, reveals the high-tech details of this largely invisible process. More important, it reveals the […]
“Michael Lewis’s new book about high-frequency trading and how he believes the markets are “rigged” ends with a cliffhanger. “To illustrate some of the technology used by high-speed firms, the author joins a group of women in Pennsylvania for a bicycle ride along the path of a microwave network used in trading. Microwave networks are […]
“Words like “rigged” and “scam,” which have been used to describe how high-frequency trading firms make money in the markets, usually indicate something illegal has occurred. The attorney general, Eric H. Holder Jr., added to that perception when he confirmed at a congressional hearing on Friday that the Justice Department was investigating high-frequency trading “to […]
“Scrutiny of high-frequency trading is stirring memories among investment veterans of earlier scandals when the government targeted price-fixing and fraud in U.S. equity markets. “Michael Lewis’s book “Flash Boys” and probes by the New York attorney general and Federal Bureau of Investigation are spurring outcry from Washington to Newport Beach, California, as investors and politicians […]
“Robert E. Diamond Jr., a former chief executive of Barclays, did not have to look far to choose the top executive of his new investment company, Atlas Mara Co-Nvest. “Atlas Mara, which is focused on investments in the African financial sector, said on Tuesday that it had appointed John Vitalo, chief executive for the Middle […]
“A majority of private-equity firms inflate fees and expenses charged to companies in which they hold stakes, according to an internal review by the U.S. Securities and Exchange Commission, raising the prospect of a wave of sanctions by the agency. “More than half of about 400 private-equity firms that SEC staff have examined have charged […]
“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 […]
“Citigroup has agreed to pay $1.13 billion to settle claims by investors who demanded that it buy back billions in residential mortgage-backed securities. “The bank said on Monday that the pact it reached with 18 institutional investors called for Citigroup to make a binding offer to the trustees of 68 trusts it sponsored that bundled […]
“It’s not every day that you find a fan club for new taxes, especially among economists and legal experts. “But a burst of outrage in recent days generated by Michael Lewis’s new book about the adverse consequences of high-frequency trading on Wall Street has revived support in some quarters for a tax on financial transactions, […]
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