“I don’t have much to add to this International Financing Review article titled “Banks target DTAs to boost capital,” but it brought tears of joy to my eye, and I’ll pass it along because at least some of my readers share at least some of my aesthetic sensibilities. That’s probably a minority, even of my […]
“Deutsche Bank has for the first time laid out plans to slash its US balance sheet as it seeks to allay concerns over how it would deal with tough new rules imposed by the Federal Reserve on foreign banks. “The lender aims to reduce assets held in its US arm by up to a quarter […]
‘The bottom line is that Fannie Mae FNMA -0.30% is making a profit,” declared CEO Timothy Mayopoulos in a Friday conference call with reporters. And it’s a big profit, thanks to the housing recovery and the continuing market advantage of being one of the federal government’s anointed guarantors of mortgage-backed securities. Fannie reported an $84 […]
“In the five years that have elapsed since the direst days of the financial crisis, we’ve learned much about how the nation’s high-level banking regulators worked to keep the debacle from turning into a full-blown economic Depression. Tales of these herculean efforts have emerged in books by some of the major players, and in the […]
“Nearly six years after the financial crisis, regulators have adopted a slew of new rules that might make individual banks a little safer. None of the measures, though, adequately addresses a more troubling and hard-to-recognize problem: the risk lurking in the linkages between financial institutions. “New capital and liquidity rules will make banks marginally more […]
Better Markets CEO Dennis Kelleher on the lawsuit against the Department of Justice over its settlement with JPMorgan. Watch Fox Business interview here
“Bank of America Corp. boosted Chief Executive Brian Moynihan;s salary and bonus 17% to $14 million for 2013, rewarding its top executive for a year in which the bank posted its strongest annual profit since 2007.” “The second largest U.S. lender by assets paid its CEO $1.5 million in salary and $12.5 million in restricted shares, according to a […]
“Nasdaq OMX Group plans to roll out a “kill switch” that would cut off trading of its member firms when pre-set limits are breached, the exchange operator said in a regulatory filing.” “Controlling risk has been a major focus for the securities industry in the wake of high-profile snafus like the August 2012 glitch at […]
“Federal Reserve Chairman Janet Yellen said last week that clarification on how the Volcker Rule treats collateralized loan obligations would be coming “reasonably soon.” Managers of the funds that package junk-rated buyout loans aren’t waiting to find out.” “The Volcker Rule prohibits banks from investing in a CLO if the fund owns bonds. After issuance […]
“European banks and the Federal Reserve began a chess match over new rules for U.S. units of foreign banks, with overseas firms expected to try and limit the impact and Fed officials vowing to prevent banks from evasion.” “The jockeying over the Fed’s new rules could further ruffle tensions between the U.S. and Europe over […]
“Daniel Tarullo has delivered a hard lesson about the limits of global banking supervision. The Federal Reserve on Feb. 18 confirmed that European lenders will need separate capital for their American operations, which could hike their funding costs and limit their ability to compete. Banking will become less global as a result.” “The new rules […]
“The recent turmoil in emerging markets raises an urgent question: If things get worse, if markets plunge or a government defaults, do regulators know which banks, hedge funds or other institutions are most at risk?” “Almost six years after the crash, with financial regulation overhauled in the U.S. and elsewhere, you’d expect the answer to […]
“The question of which regulator will take the lead in enforcing the complex Volcker rule took center stage this week, as U.S. lawmakers voiced concern over the lack of clear leadership among the five agencies in charge of the statute.” “In testimony before the House Financial Services Committee on Wednesday, the heads of the five […]
“The only way to mitigate the negative effects of high-speed traders is to redesign a key part of how financial markets operate, according to the University of Chicago’s Eric Budish. “Trading is now effectively non-stop, with transactions measured in millionths of a second. Budish, an associate professor of economics at the Booth School of Business, […]
“WASHINGTON — A financial reform group hoping to block the government’s $13 billion settlement with JPMorgan Chase faces a steep uphill climb. “Better Markets filed suit last week, claiming the Justice Department ignored a statutory provision that required court approval for settlements of this kind. “But the group may struggle to convince a court it […]
“This week the Federal Reserve took a major step toward establishing a more sensible set of rules for global banks operating in the United States. Yet in a separate and almost simultaneous smaller announcement, the Fed announced a change to the board of the Federal Reserve Bank of New York that sent all the wrong […]
“The Federal Reserve approved new standards for foreign banks that will require the biggest to hold more capital in the U.S., joining other countries in erecting walls around domestic financial systems. “Banks with $50 billion of assets in the U.S. will have to meet the standard under a revised rule approved yesterday, which raised the […]
“Big paydays on Wall Street often come under laserlike scrutiny, while Silicon Valley gets a pass on its own compensation excesses. Why the double standard? “Take Eric Schmidt, the former chief executive and current chairman of Google. Google’s compensation committee last month awarded Mr. Schmidt $100 million in restricted stock plus $6 million in cash. […]
“American households took on $241 billion in additional debt in the fourth quarter of last year, signaling the end of an extended period of hunkering down. Total household debt increased 2.1 percent, the largest quarterly increase since before the recession, according to a new report from the Federal Reserve Bank of New York. “After a […]
“A growing number of homeowners trying to avert foreclosure are confronting problems on a new front as the mortgage industry undergoes a seismic shift. “Shoddy paperwork, erroneous fees and wrongful evictions — the same abuses that dogged the nation’s largest banks and led to a $26 billion settlement with federal authorities in 2012 — are […]
“It is time for [government-sponsored enterprises] to give up ties to the federal government that have made them poster children for corporate welfare. Most of all, Congress needs to look more to the protection of the taxpayers and less to the hyperbole of the GSE lobbyists. –Ralph Nader, testimony before the House Committee on Banking […]
“Absence of news, finding reasons for the rise or fall of a stock price can be a very difficult thing. “With so many actors seeking different outcomes, sometimes offering precise reasons is close to impossible. Furthermore, as a stock market reporter a decade ago, I learnt that traders could also come up with post-event explanations […]
“A federal appeals court strengthened the Securities and Exchange Commission’s hand in insider-trading cases, ruling that defendants can be liable not only for the personal profits from illegal trades but for money generated for their employers. “The U.S. Second Circuit Court of Appeals said in a 2-1 decision that Joseph Contorinis, a former portfolio manager […]
“Compliance chiefs on Wall Street have had their hands full lately, thanks to sweeping reforms initiated by the 2010 Dodd-Frank Act. Yet complying with Dodd-Frank is hardly the only serious challenge they face. That is especially true now that federal antitrust authorities are focusing on bid-rigging, interest rate manipulation and other forms of collusion on […]
“Sometimes government programs that seem flawed at their launch turn out to succeed against all expectations. No, this is not a post about the Affordable Care Act — I still think that will prove to be an unsustainable fiscal train wreck. I have in mind the Obama administration’s Financial Stability Plan to continue the bank […]
“The Federal Reserve hit foreign banks operating in the U.S. with new rules meant to force many to hold more capital. It is a significant move, even if the Fed did pull a punch or two. “Foreign banks had fought the proposed rules, a final version of which the Fed approved Tuesday. Among those expected […]
“The Federal Reserve is expected to finalize capital rules for “foreign bank organizations” on Tuesday, and it has reignited questions about whether the United States is being unduly harsh to European banks here. “Absolutely not. “In fact, not only have foreign banks not been required to be sufficiently capitalized to sustain unexpected losses, but also […]
“Corporations should expect an onslaught of enforcement proceedings from investigations into overseas bribery, manipulation of financial benchmark rates and the issuance of toxic mortgage securities. The question is how much money the government will demand as part of the inevitable settlements, a figure that is difficult to calculate. “The government is taking an increasingly hard […]
“Lenders including Deutsche Bank, Royal Bank of Scotland, and UBS are reviewing rules on currencies traders making bets with their own money, in another sign of how investigations into the forex market is prompting a crackdown on trading floors. “The banks are assessing ways to tighten policies on “private account” trading as part of internal probes […]
“Foreign banks with a major presence on Wall Street will no longer be allowed to avoid many of the tougher rules that the United States introduced after the financial crisis to prevent banking failures and bailouts. “The Federal Reserve, a leading bank regulator, issued a final rule on Tuesday that will force the American operations […]
“No one has yet been accused of a crime in the foreign exchange market, but there is a lot of talk of disturbing practices, including dealing in personal accounts against clients’ interests. This could be a scandal as big as the fixing of interbank lending rates. However, the probes seem unlikely to address the hardest […]
“The stress that financial traders suffer during periods of high volatility in the markets reduces their appetite for risk, according to a study led by Cambridge university neuroscientist and former Wall Street trader John Coates. This may prolong financial crises. “The research, published in Proceedings of the National Academy of Sciences, combines field and lab work. […]
“Europe is lurching toward an overhaul of its banking system. Later this year, the European Central Bank is set to assume the authority to supervise the 130 largest banks in the euro zone — a momentous process of centralizing financial regulation in Frankfurt aimed at preventing another round of the bank failures that contributed to […]
“The biggest foreign banks in the US are bracing for new regulatory rules that will govern their structure and demand tougher capital requirements, in a move aimed at helping them withstand a future crisis. “The Federal Reserve on Tuesday is set to finalise the rules which will hit Barclays, Deutsche Bank, Credit Suisse, UBS and others, […]
“Would you buy stock in a company that barred you from sharing in its future earnings? Of course not. Participating in the upside is what stock ownership is all about. “And yet, as of December 2010, holders of Fannie Mae and Freddie Mac common stock were subject to such a restriction by the United States government. They […]
“LONDON—British prosecutors filed criminal charges against three former bank traders for alleged fraud, opening a new front in a global investigation into alleged rigging of benchmark interest rates, with more charges in the pipeline. “The U.K.’s Serious Fraud Office said Monday that it charged three former Barclays PLC traders with conspiracy to defraud for their alleged […]
“Better Markets, a non-profit Wall Street watchdog, filed a lawsuit Monday against the US Department of Justice (DOJ) alleging that its $13 billion settlement with JPMorgan Chase over the bank’s sale of toxic mortgage-backed securities in the run-up to the financial crisis was an illegal cover-up. “Better Markets said the deal, worked out in November […]
“The week began with a long conversation with Sir Richard Lambert about a mooted Commission on Banking Standards, which he has been asked by assorted bank chairmen to set up. The theory is that an independent body will be better at defining the standards of service and ethics to which the banks should aspire than […]
“The Dodd-Frank Act, passed in 2010, mandated hundreds of major regulations to control bank risk-taking, with the aim of preventing a repeat of the taxpayer bailouts of “too big to fail” financial institutions. These regulations are on top of many rules adopted after the 2008 financial crisis to make banks more secure. Yet at a Senate hearing […]
“The United States was the world’s first middle-class nation, which was a big factor in its rapid growth. Mid-19th-century British travelers marveled at American workers’ “ductility of mind and the readiness…for a new thing” and admired how hard and willingly they labored. Abraham Lincoln attributed it the knowledge that “humblest man [had] an equal chance […]
“Securities and Exchange Commission Chairman Mary Jo White has tapped Stephen Luparello, a former executive at the Financial Industry Regulatory Authority who has also worked at the SEC, to a top post overseeing trading firms and stock exchanges, people familiar with the matter said.” “Mr. Luparello has accepted the job as director of the SEC’s division of […]
“The Securities and Exchange Commission, faced with a recent run of courtroom defeats, is shaking up the way it prepares for trials.” “Mary Jo White, who took charge of the SEC in April, has restructured the agency’s trial unit in recent months, according to people familiar with the matter. The goal in part is to […]
“Seven global banks including Barclays and UBS face new claims of alleged foreign exchange market manipulation in the first US class-action lawsuit to include original research that highlights unusual price spikes in euro, sterling and other major currencies.” “While nearly a dozen similar lawsuits have been filed in the US, the damages claim filed by the City of Philadelphia […]
“Antony Jenkins’ efforts to change the culture of Barclays by cutting bankers’ pay are on hold. At its investment bank, it is paying bonuses that are 13 per cent higher to “compete in the global market for talent”. The bank’s chief executive wants to reform the pay of US and Asian investment bankers but it is beyond his control.” “His […]
“Under new leadership, the US Commodity Futures Trading Commission is easing tensions with European regulators and mollifying industry worries in a marked change from its recent past.” “Since taking over the CFTC at the beginning of this year, acting chairman Mark Wetjen has taken advantage of his temporary time at the helm to lessen some of the waves made by his […]
“Call it the loophole that destroyed the world. It’s 1999, the tail end of the Clinton years. While the rest of America obsesses over Monica Lewinsky, Columbine and Mark McGwire’s biceps, Congress is feverishly crafting what could yet prove to be one of the most transformative laws in the history of our economy – a […]
“As the need for speed in high frequency trading (HFT) intensifies, with the difference between success or failure often measured in milliseconds, a Chicago company is now linking the NYSE Euronext (NYSE:NYX) with the NASDAQ OMX Group, Inc. (NASDAQ:NDAQ) through laser technology used in U.S. military jets — and regulators watch developments with a wary eye.” […]
“There’s a ton of interesting stuff going on in the Wall Street sphere of late – I’m trying to find some time to do a proper write-up of the extraordinary lawsuit just filed by the Better Markets advocacy group against Eric Holder’s Justice Department, seeking to invalidate the $13 billion JP Morgan Chase settlement – but one […]
“Dear Shareholders:” “It is a great honor to have been suggested as a potential board member of JPMorgan Chase – by Sheila Bair in an interview in DealBook in The New York Times last week.” “Given the daunting problems that continue to face your corporation, I have thought long and hard about whether to allow my nomination to go forward. […]
“Sir, Banks may be too big to jail but the US justice department is not too big to sue. Thus Better Markets is taking the US attorney-general to court (“The people vs Wall Street Banks”, editorial February 12).” “Better Markets is a not-for-profit advocate for sound financial reform. At issue is the $13bn settlement reached with […]
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