Category Archives: Banking industry

Federal Regulators Trying to Leash and Collar Standard Chartered’s Nemesis, Benjamin Lawsky

The plot thickens! Today, the Wall Street Journal reported that, “Regulators Seek Unity in U.K. Bank Talks.”

If you read the article, a more accurate headline would be “Federal regulators desperate to get in front of Lawsky mob and call it a parade.” All the article says is the mucho unhappy and very much outflanked Federal regulators have gotten a meeting with Lawsky. Just look at the disconnect between the PR in the first paragraph and the actual state of play in the second:

Get Everyone You Know in Palm Beach County to Vote for Lisa Epstein for Clerk of the Court Next Tuesday

Readers may know I don’t do political endorsements. I’m making an exception because I’ve worked with Lisa Epstein and am extremely impressed with her knowledge, energy, and tenacity. And separately, readers may have come to recognize that county clerks and registers of deeds can be very important guards of the integrity of property records and legal processes. But only a very few, such as Jeff Thigpen in Guilford County, NC, and John O’Brien in Southern Essex County, Massachusetts, have bothered to investigate their own files and speak up about the large-scale problems they have unearthed.

Lisa is an oncology nurse who has become a self trained and formidable mortgage document and foreclosure procedures (as in abuse) expert.

Consumer Financial Protection Bureau Proposes New Safeguards for Mortgage Borrowers

The CFPB is proving to be tough minded on the mortgage front. The Wall Street Journal reports that it intends to require banks to consider a modification request before proceeding with a foreclosure:

Reuters Runs Interference for Elite Corruption, Scrubs Article That Shows How Banks Get Out of Jail Free

Marcy Wheeler put up a useful post yesterday morning, based on a Reuters article describing the efforts of Standard Chartered to combat the damage done by its making illegal transfers on behalf of Iranian banks.

Marcy picked up on how the article revealed the techniques used by big banks to escape suffering meaningful consequences of their misdeeds:

Standard Chartered Makes Empty Threat to Sue New York Regulator Over Iran Money Laundering

I have to confess I’m really enjoying the dust up between the New York Superintendent of Financial Services, Benjamin Lawsky, and his opponents, namely, his target, Standard Chartered, and the flummoxed Federal regulators that he is showing up as so deeply captured that they genuinely can’t tell regulatory theater from the real thing.

FHFA Threatens to Kneecap Use of Eminent Domain to Condemn Mortgages

All this talk of firing Ed DeMarco seems to have led him to decide to live up to his reputation.

NYS Order on Standard Chartered’s Iran Transfers Opens Up US, UK Regulatory Pig Fight

I hope Benjamin Lawsky, the New York Superintendent of Financial Services, has balls of steel. He will need them.

Project S.H.A.M.E.: The Recovered History of Adam Davidson

We are delighted to post the latest offering of Project S.H.A.M.E, a media transparency initiative led by Yasha Levine and Mark Ames.

Adam Davidson graduated from the University of Chicago with a BA in religion, and began his public radio career selling airtime and doing sponsor outreach. He then became an on-air radio personality, filing pro-Iraq War dispatches as Marketplace’s Middle East correspondent, and recently transformed himself into an effective propagandist for the banking industry. Over the years, Davidson has whitewashed the occupation of Iraq, praised sweatshop labor, attacked the idea of regulating Wall Street and argued for “squeezing the middle class”–all while taking undisclosed money from banking interests. No wonder Davidson shamelessly credited Wall Street for providing “just about anything that makes you happy.”

Barofsky v. Geithner and Administration Mouthpieces (Yglesias Edition)

Neil Barofsky continues to take issue with the Administration’s efforts to depict itself as the friend of ordinary Americans when its real loyalties are to banks. In a Reuters op-ed, he took on the hypocrisy of the Administration and its allies in their “fire DeMarco” messaging. If you are late to this row, Ed DeMarco, head of Fannie’s and Freddie’s regulator, the FHFA, nixed the idea of having his wards make principal reductions on mortgages, despite the fact that top mortgage industry analyst Laurie Goodman has ascertained they are far more successful than mods that don’t lower principal balances.

As various commentators, including yours truly, have pointed out, the criticism of DeMarco is sheer scapegoating.

Where Are the Feds? NY Banking Superintendent: Standard Chartered a “Rogue Institution,” Made $250 Billion of Illegal Transfers With Iran

The New York Superintendent of banks dropped a bombshell today, filing an order against Britain’s Standard Chartered Bank. It charges the bank with having engaged in at least $250 billion of illegal transactions with Iranian banks, including its central bank, from 2001 to 2010, and of engaging in similar schemes with Libya, Myanmar and Sudan (those investigations are in progress). It threatens SCB with the loss of its New York banking license and termination of access to dollar clearing services. The latter alone is as huge deal. You are not a real international bank unless you have dollar clearing. Sumitomo Bank looked at giving up its US banking license in 1985 when it was examining deal structures for making an investment in Goldman, and ascertained that giving up access to Fedwire would cost it over $100 million a year and considerably weaken its position in Japan. SCB is certain to be a much more active dollar player than Sumitomo was and the volume of international transactions has grown hugely since then.

SCB squealed like a stuck pig, claiming that only $14 million of transactions were out of compliance. But the bank has nowhere to go.

Is Draghi’s EuroRescue Plan Coming Unglued?

No sooner had some astute Euro commentators noted that Draghi might have found a path through the Euro mess to keep it patched up long enough for to impose austerity on the periphery and drive all of Europe into a lovely depression, various elements of his plan look as if they were coming unglued.

Dubious Study Defends SEC Revolving Door

Nothing like being reminded on a regular basis that you live in the best of all possible worlds.

The New York Times tells us a new study is being presented today at the American Accounting Association which defends the revolving door.

Will Draghi Outmaneuver the Bundesbank?

Ambrose Evans-Pritchard of the Telegraph, who correctly called that ECB would not take action last week, argues in his latest article that Mario Draghi and Italy’s Mario Monti have isolated the Bundesbank and are closing in on being able to buy bonds along side the Eurozone rescue facilities once the ESM presumably goes live (the assumption is that the German constitutional court will lift its injunction on September 11). Draghi hopes to keep Mr. Market at bay till then by a combination of happy talk and threats.

Yanis Varoufakis: Draghi Greatly Diminished the Office of the ECB, Sacrificed the Fiscal/Monetary Distinction, and Didn’t Do Much for the Euro While He Was At It

By Yanis Varoufakis, Professor of Economics at the University of Athens. Cross posted from his blog

First came the impressive declarations: The ECB will do whatever is necessary to ensure that those who go short on the euro, who bet on its disintegration, will lose. “And, believe me”, he added “it will be enough”. He also, rather significantly, uttered the term ‘convertibility risk’ (code-words for the risk that funds kept in some part of the Eurozone will be forcefully converted to some new, devalued, currency) and pledged to eradicate it. No wonder, the markets responded with considerable enthusiasm.

Then came the moment to put up or forever lose his credibility. Alas, probably under incredible pressure from the Bundesbank, he opted for the latter.