BofA Seeks End to Crisis-Era Constraint (WSJ)
Bank of America wants out of a secret U.S. sanction imposed during the financial crisis, but regulators are keeping the 15-month-old penalty in place as they evaluate whether the giant lender has satisfied all of their requirements, said people familiar with the situation. The question of when the nation’s largest bank by assets can be free of the confidential memorandum of understanding is currently the subject of negotiations between bank officials, the Federal Reserve and the Office of the Comptroller of the Currency, these people said. It is a “reasoned disagreement,” said one person familiar with the discussions. As long as the memorandum is in place, Bank of America is subjected to intensified scrutiny from regulators and restraints on certain moves. The “pendulum,” said one person close to the bank, is swinging from “the permissive side to the highly restrictive side.” Regulators now “are super vigilant about everything.” One benefit of lifting the sanction would be freedom from the memorandum’s psychological stigma.
Wall St. Faces Specter of Lost Trading Units (NYT)
“This is the real stuff,” said Brad Hintz, an analyst at Sanford C. Bernstein & Company. “It shows that if you squeeze Wall Street, like a balloon it will come out somewhere else, and we really are squeezing Wall Street. Their business models are changing.”
Barclays warns against forced break-up (FT)
The bank has launched a spirited defence of its approach of combining retail and investment banking under one roof, with executives on Thursday delivering a thinly veiled warning to the UK government that a break-up could force it overseas. John Varley, chief executive, said Barclays’ so-called universal model had proved its resilience and profitability through the financial crisis. He said it would have been “discourteous” of him to pre-judge the conclusions of the UK government-appointed Commission on Banking, which will spend the next year considering whether universal banks should be broken up. But, Mr Varley went on, the evidence to justify any break-ups would have to be “empirical, unemotional and thorough enough not to cause unintended consequences”.
Obama: Taxpayers Will Be Paid in Full For the GM Bailout (CNBC)
“We expect taxpayers will get back all the money my administration has invested in GM,” Obama said. “Over time, that is going to be extraordinarily significant. It means we stood up this industry and you know what, we got a return.”
Key White House economic adviser Christina Romer stepping down (Reuters)
Resignation effective Sept. 3, at which time Romer will return to being a professor in California.
2 Top Economists Differ Sharply on Risk of Deflation (NYT)
Nerd-off: “When the latest unemployment figures are announced today, all of Wall Street will be watching. But for Richard Berner of Morgan Stanley and Jan Hatzius of Goldman Sachs, the results will be more than just another marker in an avalanche of data. Instead, the numbers will be a clue as to which of the two economists is right about where the American economy is headed. Their sharp disagreement over that question adds yet another twist to the fierce rivalry between the firms, Wall Street’s version of the New York Yankees and the Boston Red Sox.”
You Won’t See This On Shark Week: Video (AnimalNY)
“After fighting a bull shark for 45 minutes according to this video’s YouTube description, a fisherman decided to demonstrate an alternative technique for subduing the massive fish as the children held their ears and eagerly looked on.” Continue reading »
