February 9, 2012
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Federal Reserve Board Announces Agreement In Principle With Banks Regarding Issuance Of Monetary Sanctions
Release Date: February 9, 2012
For immediate release
The Federal Reserve Board on Thursday announced that it has reached an agreement in principle with five banking organizations regarding the issuance of monetary sanctions against the organizations totaling $766.5 million. The monetary sanctions would be assessed for unsafe and unsound processes and practices in residential mortgage loans servicing and foreclosure processing. These deficiencies were identified by examiners during reviews conducted from November 2010 to January 2011. The deficiencies represented unsafe and unsound practices at these five institutions and corrective measures were required by formal enforcement actions issued against the institutions on Apr. 13, 2011.
The Board will assess monetary sanctions against the parent holding companies of the five largest mortgage servicers supervised by federal banking regulators for failure to appropriately oversee their subsidiaries' mortgage loan servicing and foreclosure processing operations. Those parent holding companies are Bank of America Corp., Citigroup Inc., Ally Financial, Inc., JPMorgan Chase & Co., and Wells Fargo & Co. The Board will also assess monetary sanctions against the two mortgage servicers owned by JPMorgan Chase and Ally Financial that are subject to the Board's jurisdiction for the servicers' failures. Those servicers are GMAC Mortgage, LLC a subsidiary of Ally Financial, Inc., and EMC Mortgage Corporation, a subsidiary of JPMorgan Chase & Co.
The amounts of the monetary sanctions to be levied by the Board against these institutions are as follows:
Institution BHC Penalty Servicer Penalty Total
Bank of America $175.5 million $175.5 million
Wells Fargo $87 million $87 million
JPMorgan Chase $106.5 million $168.5 million $275 million
Citigroup $22 million $22 million
Ally Financial $17 million $190 million $207 million
**CN: The Fed says it will continue to closely monitor the conduct of the foreclosure review and the institutions' implementation of the plans, and will take additional enforcement actions as needed.
Moody's Investors Service: European CLO Top 50 Holdings Have Stronger Than Expected Credit, But Pose Concentration Risk
According to a report by Moody's Investors Service, a look at the broad characteristics of the 50 most referenced issuers in the European CLO leveraged loan universe reveals that they are likely to drive the performance of the universe as a whole. European CLO leveraged loan portfolios exhibit a high degree of overlap among issuers, with the 50 most referenced issuers accounting for about 4% of the unique names in the European CLO universe, but almost half the universe exposure amount. In light of the looming risk of recession in Europe, the performance of these issuers could have negative repercussions for the entire European CLO universe, even though the credit quality of the top 50 issuers is better than that of the universe of underlying CLO holdings.
-- Christine Nielsen
Lead Stories
White House To Issue Improved Jobs Projections, Contingent On Congress Passing Obama Agenda
Associated Press/Washington Post
The White House is lauding a rosier election-year economic forecast, predicting the economy could add two million jobs this year. But the upbeat projection is based partly on the shaky premise that Congress will sign off on President Barack Obama’s jobs agenda.
http://jlne.ws/xrgx4r
**CN: The budget Obama will release Monday forecasts an average unemployment rate of 8.9 percent in 2012.
Ex-Treasury Chief Summers Says U.S. Economy on 'Right Road' With Jobs Data
Bloomberg
Former U.S. Treasury Secretary Lawrence Summers said the latest jobs report shows the economy is "on the right road" while Glenn Hubbard, an adviser to Republican presidential candidate Mitt Romney, downplayed the impact of recent jobs data.
http://jlne.ws/zFM9e2
Bernanke cautions about budget shocks next year
Associated Press via Yahoo! News
Federal Reserve Chairman Ben Bernanke is urging senators to resolve debates over tax cuts that expire this month and at the end of the year, saying uncertainty around both could slow the economy.
http://jlne.ws/yh1JDg
Bernanke urges Congress to address Bush tax cuts
Reuters via Yahoo! News
WASHINGTON (Reuters) - Federal Reserve Chairman Ben Bernanke on Tuesday warned Congress that putting off a decision on the fate of expiring Bush administration tax cuts could unsettle businesses and households, undercutting the U.S. economic recovery.
http://jlne.ws/zXec73
The Federal Reserve's Explicit Goal: Devalue The Dollar 33%
Forbes
The Fed has announced a course of action that will steal -- there is no better word for it -- nearly 10 percent of the value of American's hard earned savings over the next four years.
http://jlne.ws/zQqQHQ
If The Federal Reserve Is Abolished, What Then?
CNBC
Critics of the Federal Reserve won't be satisfied until the agency is shut down for good. But abolishing the Fed only raises the bigger issue: What would-or should-be in its place?
http://jlne.ws/yjsbOF
Bernanke-Led Economy Proving Critics Clueless About Federal Reserve Policy
Bloomberg
The numbers are proving Federal Reserve Chairman Ben S. Bernanke's critics wrong.
http://jlne.ws/w1WmyY
QE3 Remains On The Table, Fed's Williams Says
FOX Business
The Federal Reserve may need to launch another round of asset purchases with printed money, commonly known as quantitative easing, if the economy loses momentum or if inflation remains well below 2%, said John Williams, the president of the San Francisco Federal Reserve Bank, on Wednesday.
http://jlne.ws/xe9RKm
Federal Reserve Branch Chief Warns of 'Looming Disaster'
International Business Times
Saying the shock to the U.S. economy that followed the collapse of the housing bubble and financial crisis of 2008 was "like an earthquake which has left one part of the land higher than another part," Federal Reserve Bank of St. Louis President James Bullard sounded a somewhat critical note on the actions of the U.S.
http://jlne.ws/xsY67M
Fed's Lacker sees no need for more easing for now
Reuters via Yahoo! News
NEW YORK (Reuters) - A top Federal Reserve official said on Wednesday he does not see a rationale for more asset purchases if U.S. economic data continue to show the recovery is picking up steam.
http://jlne.ws/z7GfBE
Federal Reserve Chairman Ben Bernanke is Right on Taxes
CNBC
For one time in a row Fed head Ben Bernanke got the story right. No, it wasn't King Dollar. It was taxes. Testifying before members of the Senate Budget Committee today, Bernanke referred to the scheduled repeal of the Bush tax cuts.
http://jlne.ws/wLa5qc
Fed's Dudley Sees Significant Impediments to Economic Growth
BusinessWeek
Federal Reserve Bank of New York President William C. Dudley said the U.S. economy will probably slow this year while confronting risks "skewed to the downside."
http://jlne.ws/AjoC86
Economic forecast is good; Federal Reserve economic advisor provides outlook to chamber
Kutztown Area Patriot
The economic forecast for 2012 is positive. "The economy is performing better than a year ago," Luke Tilley, Ph.D., Regional Economic Advisor, Federal Reserve Bank of Philadelphia, told Northeast Berks Chamber of Commerce members recently. "Things have been looking up.
http://jlne.ws/we15AY
Fed Sells $6.2 Billion of Bonds From AIG Rescue to Goldman
BusinessWeek
The Federal Reserve Bank of New York sold $6.2 billion in face value of mortgage bonds it assumed in the rescue of American International Group Inc. to Goldman Sachs Group Inc., allowing one of its bailout loans to be repaid.
http://jlne.ws/zwGpCp
Fed Pushes ING-Capital One Vote To Monday
FOX Business
The Federal Reserve pushed back a vote on whether to approve Capital One's $9 billion acquisition of ING's U.S. online banking arm until Monday.
http://jlne.ws/xSq7tG
Draghi Signals Better Outlook as Greece Reaches Bailout Deal
http://jlne.ws/yK0ujz
Greece reaches austerity agreement
http://jlne.ws/yIgDDS
EU agrees rules to tame derivatives market
Reuters
European Union diplomats and the European Parliament agreed on Thursday to overhaul regulation of the roughly $700 trillion derivatives market, a move that will make it easier to control one of the most opaque areas of finance.
http://jlne.ws/xjF1db
'Perfect World' Eludes Regulators in Aligning Swaps Rules
BusinessWeek
The potential for U.S. and foreign regulations to reach across national borders and create overlapping or conflicting rules is gaining urgency as global authorities seek to complete rules this year to prevent a repeat of the 2008 credit crisis.
http://jlne.ws/wxH23U
MF Brokerage Trustee Traced $105 Billion in Cash Movement
BusinessWeek
MF Global Inc.'s $1.2 billion in missing customer funds began to filter out on Oct. 26 as the company's computers and employees couldn't keep up with margin calls and increased demands for collateral.
http://jlne.ws/yv9EnU
Treasury, IRS propose easier tax rules for overseas banks
Washington Post
The U.S. Treasury Department and the Internal Revenue Service are trying to make it easier for overseas banks to comply with a tax-withholding and information-collection requirement for some U.S. clients.
http://jlne.ws/zG2axM
Expert Panelists Dissect & Discuss Impact of Proposed FATCA Regulations from U.S. Treasury
PR Newswire
ARLINGTON, Va., Feb. 8, 2012 /PRNewswire-USNewswire/ -- The U.S. Treasury has just released hundreds of pages detailing the new proposed regulations under the Foreign Account Tax Compliance Act ("FATCA").
http://jlne.ws/xQ7ZdQ
Fitch: Investable Universe Likely to Expand for U.S. MMFs
Business Wire
NEW YORK--(BUSINESS WIRE)--Fitch Ratings believes the U.S. Treasury Department decision to begin offering floating-rate notes would significantly expand investment opportunities for conservative investors, including money market funds (MMFs). Last week, the Treasury's borrowing advisory committee released a report indicating the potential sale of short-term floating-rate securities.
http://jlne.ws/zMh0yd
U.S. Will Run $1.1 Trillion Deficit, CBO Says: Washington Mover
BusinessWeek
The U.S. budget deficit will shrink this year to $1.1 trillion, the Congressional Budget Office said today in a report sure to inflame the election-year debate over the government shortfall.
http://jlne.ws/zIDS1w
Bill Gross Blasts Ultra-Low Rates, And Says The Fed Is Taking Us On The Course Of Japan
Business Insider
In a complex editorial published in the Financial Times this morning, PIMCO founder and co-CIO argues that the continued depression of interest rates on U.S. Treasury bills might not really be helping the economy.
http://jlne.ws/xxIgWG
Buffett Rule Proposal Is A Win For Tax Exempt Bonds And Divorce
Forbes
Details of new 30% minimum tax shows how adding yet another alternative minimum tax creates its own problems.
http://jlne.ws/zDgxfV
ECB Leaves Key Refi Rate Unchanged At 1%
Zero Hedge
As expected. 9 February 2012 - Monetary policy decisions At today's meeting the Governing Council of the ECB decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 1.00%, 1.75% and 0.25% respectively.
http://jlne.ws/zlzxJx
Index Contingent Credit-Default Swaps Ready To Trade
By Katy Burne Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--A group of dealers and investors have agreed on uniform trading standards for a new type of privately traded credit derivative, anticipating a rare growth spurt in a quiet corner of the much-criticized $32 trillion credit-default swap market. The so-called "contingent" credit-default swaps have been traded on individual borrowers for a few years, but now will be made available to trade on a basket or index.
Events
13th Annual Credit Suisse Financial Services Forum
February, 7-10th, 2012
Annual Forum From Credit Suisse
http://jlne.ws/yrDiOw
National Association of Home Builders' Show
February 10, 2012
Special Session With Fed's Bernanke Open To All Registered Attendees
http://jlne.ws/tEcqjW
Retail Banking in Europe
March 13 and 14, 2012
Marketforce And The IEA’s 13th Annual Conference
http://jlne.ws/wNoXDO
ISDA 27th Annual General Meeting
April 30 - May 2, 2012
Only ISDA Members Eligible To Attend
http://jlne.ws/yrvU5E
Firms & Banks
MF Global Customers Protest Corzine's 'Wrongful Act' Insurance
By Joseph Checkler Of DOW JONES DAILY BANKRUPTCY REVIEW
Customers of MF Global Holdings Ltd. (MFGLQ) say the failed brokerage shouldn't be allowed to pay for a potential "wrongful act" legal defense of former Chief Executive Jon S. Corzine and others with money from MF Global's own insurance subsidiary.
http://jlne.ws/A7Cq3I
Goldman executive talks up Volcker rule
By Tracy Alloway in New York - Financial Times
A senior Goldman Sachs executive told an industry conference that a ban on speculative trading at commercial banks could end up improving profitability, breaking with the consensus about the effects of the new financial regulation.
http://jlne.ws/xFf1EV
RBS Condoned Libor Conduct, Sought Scapegoats, Fired Trader Says
BusinessWeek
Royal Bank of Scotland Group Plc, which accused a fired Singapore trader of manipulating London interbank offered rates, had condoned such behavior and sought scapegoats in an internal probe, the former employee said.
http://jlne.ws/wdL0Tk
Barclays Falls Short of Big Dreams
By DAVID ENRICH And DANA CIMILLUCA - WSJ
LONDON—In June 2009, top Barclays PLC executive Robert Diamond laid out an ambitious plan for the venerable British bank "to be the premier global investment bank," a goal he hoped to achieve "over the next couple of years."
http://jlne.ws/yK2hua
UBS gives data on rivals in US tax probe
AFP via Yahoo! News
Swiss banking giant UBS has handed over to US tax authorities data indicating which of the bank's rivals took on its American clients following a probe, it was reported on Thursday.
http://jlne.ws/xG1sT6
Citigroup Sued by Lehman for $2.5 Billion 'Wrongfully' Taken
BusinessWeek
Citigroup Inc.'s Citibank was sued for $2.5 billion by bankrupt Lehman Brothers Holdings Inc., which said the bank "wrongfully" withheld the money after it was transferred by Lehman in the months before its 2008 bankruptcy.
http://jlne.ws/yqcAs0
Deutsche Bank Said to Cap Immediate Bonuses at 200,000 Euros
BusinessWeek
Deutsche Bank AG, Germany's largest lender, told employees it will impose a 200,000 euro ($266,000) cap on bonuses paying out this year, said three people with knowledge of the discussions.
http://jlne.ws/zKxyjZ
Credit Suisse Posts First Loss in Three Years on Investment Bank
BusinessWeek
Credit Suisse Group AG, the second- biggest Swiss bank, said it had a loss in the fourth quarter for the first time since 2008, hurt by "adverse markets" and costs to reorganize the investment bank.
http://jlne.ws/xzMA30
Regulators
King Follows Greenspan Into Credit 'Debacle,' Edwards Says
BusinessWeek
Bank of England Governor Mervyn King is mimicking "ruinous" Federal Reserve monetary policies that led to the current financial crisis, Societe Generale SA's top- ranked strategist Albert Edwards said.
http://jlne.ws/wb73um
Swiss Bank Wegelin Charged With Helping U.S. Clients Evade Taxes
BusinessWeek
Wegelin & Co., the 270-year-old private bank, became the first Swiss lender to face criminal charges in a broadening U.S. crackdown on offshore firms suspected of helping Americans evade taxes.
http://jlne.ws/zLGOrn
Global News
Fed's Inflation Target Stirs Japan Lawmaker Ire at BOJ Record
BusinessWeek
The Federal Reserve's decision to set a 2 percent inflation target last month had a ripple effect a continent away: Japanese lawmakers are invoking it as evidence that their own central bank comes up short.
http://jlne.ws/zCgBM3
Brazil Said to Consider Smaller Budget Cuts Than Economists Are Seeking
Bloomberg
Brazilian policy makers are considering cutting the 2012 budget by less than 50 billion reais ($29 billion), two people familiar with the plan said. The amount less than some local economists expect, prompting yields on long-term interest rate futures to rise.
http://jlne.ws/A4XREl
Too Soon For Brazil To See Record Low In Base Interest Rate
Nasdaq
http://jlne.ws/ACzAd4
Fed Clears Hana Financial Acquisition Of Korea Exchange Bank Unit
FOX Business
The Federal Reserve on Wednesday granted Seoul's Hana Financial Group Inc.(086790.SE) approval to acquire an indirect controlling interest in KEB NY Financial Corp.
http://jlne.ws/ymwavq
Bank Of England Boosts Bond Buys, Holds Rates
FOX Business
The Bank of England's Monetary Policy Committee on Thursday boosted the size of its asset-purchase program by 50 billion pounds to a total of 325 billion pounds and voted to leave the central bank's key lending rate unchanged at a record low 0.5%.
http://jlne.ws/yUu0Gk
UBS's Wang on China Economy, Central Bank Policy
Bloomberg
Feb. 9 (Bloomberg) -- Tao Wang, China economist at UBS AG, talks about the nation's economy and central bank monetary policy. China's inflation unexpectedly rebounded in January as a weeklong holiday boosted spending and food-price gains accelerated.
http://jlne.ws/xW9SPD
Bank Of Korea: Future Policy Aims To Keep Inflation At Midpoint Of Target Range
Nasdaq
http://jlne.ws/xuhwPl
Reserve Bank Of Australia Monetary Policy Statement
Nasdaq
http://jlne.ws/x8eV1f
Serbian Central Bank Holds Interest Rate Amid IMF Deadlock, Dinar Weakness
Bloomberg
Serbia's central bank kept its main interest rate on hold for the first time since September amid renewed dinar weakness and reports the government won't come to terms with the International Monetary Fund on the 2012 budget.
http://jlne.ws/ya4DhS
Swiss central bank delays issuing of new notes
Boston Globe
Switzerland's central bank says it has had to delay the issuing of new high-security bank notes by at least a year because of "unexpected technical problems."
http://jlne.ws/xYsQot
Indonesia Central Bank Unexpectedly Cuts Rate On Global Slowdown
RTT News
Indonesia's central bank unexpectedly slashed its key policy rate by a quarter-point on Thursday to boost economic growth amid deteriorating global economic conditions.
http://jlne.ws/zBRDHK
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