Tucker bloody but still standing post Libor ordeal 9 Jul 2012 The Bank of England deputy convincingly denied political pressure prompted Barclays to rig interbank rates. But his explanation lacked clarity, and he was pummelled for not heeding earlier warnings. The encounter has somewhat damaged his chances of taking charge of the BoE.
Euro bank supervision could stir up hornets’ nest 5 Jul 2012 The last EU summit promised to break the vicious circle between banks and sovereigns; create a single supervisory mechanism for the industry involving the ECB; and let the ESM recapitalise banks. Grand statements so far. Filling in the details will require multiple battles.
Libor rigging looks like victimless crime 29 Jun 2012 Barclays’ deception is bad for the banking industry, but the artificial quotes probably didn’t significantly distort borrowing costs or the economy. There may have been big losers in this scandal, but they aren’t likely to be found too far afield from other banks’ trading desks.
UK mis-selling case adds to anti-bank frenzy 29 Jun 2012 Britain’s regulator has slapped lenders for flogging interest rate hedges to unsophisticated small businesses. Compensation claims will be another drag on earnings, while new business will be squeezed. Amid the furore over rigging interbank rates, it’s another reputational blow.
Barclays’ board should replace Bob Diamond 28 Jun 2012 A $450 mln regulatory fine, on top of rows over tax and bonuses, has tarnished the CEO’s track record and undermined efforts to revamp the UK bank. Diamond has many strengths and his shoes will be hard to fill. But as long as he is in charge, Barclays will struggle to move on.
Obamacare is here, it’s clear, get used to it 28 Jun 2012 Talk of overturning the Supreme Court’s ruling is empty rhetoric. Even if Mitt Romney defeats Obama, he won’t have the votes to repeal the healthcare law. Republicans and corporate America obsess over the broad lack of certainty. They should embrace the fact they just got some.
Court upholds Obamacare with barely a legal ripple 28 Jun 2012 Saving the president’s healthcare reform may roil the election but won’t change U.S. legal precedent much. Congress stays powerful subject to useful limits in the Medicaid context. The Supreme Court ruling is a reminder of the Constitution’s resilience amid political turmoil.
SEC finally puts squeeze on Wall Street deadbeats 26 Jun 2012 The U.S. watchdog has won a court order forcing a hedgie to cough up $12 mln in overdue fines. That’s a welcome start, but a drop in the bucket for an agency with a collection rate below 50 pct. More arm-twisting would bring in extra cash and might even deter would-be fraudsters.
Jamie Dimon isn’t the New York Fed’s real problem 26 Jun 2012 Former IMF chief economist Simon Johnson is on a quixotic mission to oust the JPMorgan chief from the regional central bank. But it’ll take something far bigger - an act of Congress - to truly reform the institution and end the perception that it’s too cozy with big banks.
Blaming London for bank botches is too convenient 25 Jun 2012 Say what you will about JPMorgan’s stupid trades, the bank has at least owned up to its failings. That’s more than can be said for U.S. authorities, who are instead pointing fingers at their UK counterparts. It should light a fire under dragging global coordination efforts.
Fiscal cliff “Cialis plan” deserves firm support 25 Jun 2012 That’s the love-pill codename for a bill Erskine Bowles, of Simpson-Bowles fiscal reform fame, is pushing in Congress to help Uncle Sam avoid severe dysfunction at year-end. Politicians fiddling with JPMorgan trades and Mexican guns could use a cure for when it’s urgently needed.
Credit Suisse puts central bank in its place 22 Jun 2012 The Swiss group’s board has reaffirmed support for CEO Brady Dougan - and rejected the SNB’s claims that it needs to raise capital. Squaring off publicly with a regulator is usually a bad idea. But with another authority in charge of capital, it’s a risk Credit Suisse can manage.
Uruguay’s bold cannabis fix lights hope for region 22 Jun 2012 Legislation to legalize marijuana sales would make the small South American country the first state directly involved in the weed business. The U.S. won’t like the idea. But the plan is a first step toward finding a market-based solution to the drug violence ravaging Latin America.
Bank regulators should get heavy on risk-weighting 22 Jun 2012 The financial and euro zone crises have shown the drawbacks of attaching varying weights to bank risk. Such models encourage unhealthy arbitrage. A tougher cap on the ratio of equity to total assets would limit abuse. So would banning risk measures that ignore extreme events.
Monte dei Paschi faces its moment of truth 22 Jun 2012 The world’s oldest bank will next week explain how it can close a huge capital gap identified by European regulators. Since its foolish takeover of rival Antonveneta in 2007, little has gone right for Italy’s third-largest lender. And there are no obvious solutions to its problems.
Regulator grudge match redux: Geithner vs Bair 21 Jun 2012 The former FDIC chief has formed an independent group to help push forward reforms in the U.S. financial system. The primary pressure point will be the council of regulators led by Treasury Secretary Tim Geithner. The two have sparred before. But their interests now look aligned.
China bean-counters should open their books 20 Jun 2012 After a rash of accounting slips, America has demanded China-based auditors hand over documents. Such meddling goes down badly in China. But if the government resists, it could end foreign listings and deprive local auditors of skills they’ll need to one day rival the Big Four.
Dimon double gives Congress wasteful distraction 19 Jun 2012 Lawmakers from both chambers spent a total of four hours grilling JPMorgan’s boss over a loss that never put taxpayers at risk. Congress should ensure banks are well supervised, but with a runaway deficit and anemic job and GDP growth, they have more pressing work to do.
Chris Hohn’s Lloyds plan isn’t pure self-interest 19 Jun 2012 The activist investor wants the UK bank to turn 10 bln pounds of contingent convertible debt into equity. Hohn would probably profit from the move. But if the notes are redundant, turning them into higher-quality capital would benefit Lloyds - and might help the government too.
Looming US debt clash a safety check for investors 15 Jun 2012 Washington looks set to repeat last year’s battle over the nation’s borrowing limit. That was almost a debacle. But the messy spectacle serves to put reducing deficits in the spotlight, forcing Congress to ensure that borrowing remains manageable. That should be welcomed.