Thursday, January 03, 2013
More than four years after the 2008 financial crisis, public trust in banks is as low as ever. Sophisticated investors describe big banks as “black boxes” that may still be concealing enormous risks— the sort that could again take down the economy. Jesse Eisinger's investigation, written with Frank Partnoy, is called “What’s Inside America’s Banks” and appears in the January/February issue of The Atlantic.
Thursday, January 03, 2013
On today’s show: ProPublica’s Jesse Eisinger takes a look at why public trust in banks is at an all time low. Then, Charles Morris describes the first industrial revolution in the United States, which started in the 1820s. Also, a history of peanut butter. And, we’ll investigate whether lead in gasoline was a cause of fluctuations in violent crime over the last 50 years.
Monday, December 10, 2012
Federal and New York authorities are expected to announce a record $1.9 billion settlement with HSBC over money-laundering charges on Tuesday, sending a message that banks can't skirt U.S. sanctions law while doing business in the United States.
Tuesday, October 23, 2012
The social media realm can at times seem like a frivolous place full of out-of-focus photos and posts about what your friends ate for breakfast. But for businesses, it can also be a cash cow thanks to the sheer number of people you can reach with something as simple as a tweet.
Tuesday, October 23, 2012
A bank in South Africa announced this summer that its mobile banking customers will now be able to conduct transactions and monitor their accounts through Facebook. This type of cross-pollination between banks and social media does not yet exist in the United States, but it could be coming.
Friday, October 19, 2012
The sudden departure of Citigroup CEO Vikram Pandit has sparked a conversation about where the bank is headed under new leadership and what it says about the so-called "too big to fail" banking behemoths.
Tuesday, August 14, 2012
New York's financial regulator said Tuesday that his agency has reached a $340 million settlement with Standard Chartered Bank to resolve an investigation into whether the British bank schemed with the Iranian government to launder $250 billion from 2001 to 2007.
Thursday, July 26, 2012
Yesterday in Washington, lawmakers from both sides of the aisle were talking about the structure and behavior of big banks. Tim Geithner offered testimony about the LIBOR rate-fixing scandal. And comments by a former Citigroup CEO led to buzz about the return of Glass-Steagall, which prevented banks from getting too big. Wall Street Journal economic policy reporter Damian Paletta discusses the latest.
Wednesday, July 18, 2012
HSBC spent ten years failing to comply with regulatory measures, according to a new report from the Senate's Permanent Subcommittee on Investigations. They enabled drug lords to launder money in Mexico, did business with banks linked to Al Qaeda, and bypassed American Sanctions against Iran.
Monday, July 16, 2012
By Steffen Schmidt : IAFC Blogger
This is bigger than Obamacare. It's much more significant than Romney continuing as CEO of Bain after 1999. It has a far greater impact on every American this election year than any other issue the candidates have been discussing or will address in presidential debates this fall.
Wednesday, July 04, 2012
The Royal Bank of Scotland has become the latest bank to get hit with a fine for their role in an interest rate rigging scandal. William Cohan, a former employee at JP Morgan, says this sort of rate fixing undermines the public's faith in capitalism.
Monday, July 02, 2012
Barclays Bank chairman, Marcus Agius resigned today. This comes a week after Barclays was fined $ 450 million for alleged manipulation of interest rates. The practices of Barclays and a number of other banks are under scrutiny because of a wide-ranging investigation by regulators. Agius has been chairman of Barclays since 2007 and he'll stay with the bank until his successor is found.
Wednesday, June 27, 2012
Nine of America’s biggest banks are being asked to submit plans for how they could be dismantled by the government if the bank was near default. Will these "living wills" improve regulation and bank functioning?
Monday, June 11, 2012
By Karol Markowicz : IAFC Blogger
The economy isn't doing well and our president has shown deep enough concern for this fact that he... held a press conference and talked about it a lot.
Thursday, June 07, 2012
By Jim O'Grady
(New York, NY - WNYC) A transit union says in a report that one cause of the New York Metropolitan Transportation Authority's recent fare hikes and service cuts has been hiding in plain sight: financial arrangements called interest rate swaps. Those are deals the authority made with banks on 10 percent of its $33 billion of debt —deals that have gone against the authority and in favor of the banks.
The deals were made between 1995 and 2007, when banks agreed to cover the fluctuating interest rates on some of the authority's bonds. In exchange, the NY MTA said it would pay the banks a fixed rate, plus a small premium. That agreement would've protected the authority if rates had jumped up. But the Amalgamated Transit Union says the NY MTA has taken a net loss on the deals since the economy crashed in 2008 and interest rates fell to sustained, historic lows.
The union says the authority is now losing almost $114 million a year ― and could continue to lose money on the deals for the next 20 to 30 years.
NY MTA spokesman Adam Lisberg disputed the union's calculations, saying the swaps brought predictability to the authority's budget, which needs to be balanced each year. "To compare transactions we entered into years ago, compared to what you can get in risky variable rate debt right now is either irresponsible or deliberately misleading," he said. "They are simply wrong."
He contended that the swaps allowed the authority to save $248 million. The report says that was true until 2007, when the arrangement allowed the NY MTA to pay off its debt at nearly a full point below interest rates that were relatively high. But that was before the economy tanked. Since then, the authority has lost money on the deal.
The report looked at 12 transit agencies or local governments that entered into interest rate swaps. The report's authors insisted in a conference call that, though the deals may have made sense when they were struck, these 12 agencies ― which includes the NY MTA and NJ Transit ― are now bleeding at least a half a billion dollars a year from the budgets of governments and transit authorities around the United States.
James Parrott, an economist with the Fiscal Policy Institute, called on agencies like the NY MTA to seek concessions from the banks, many of which received massive taxpayer bailouts.
He said he doesn't understand why the NY MTA isn't treating its bankers like any other business partners. “The MTA went to all of its vendors from 2008 to 2010 and got concessions from them to reduce the price of contracts," he said. "The only business they didn’t go to is the banks. Why?”
Parrott also noted that the NY MTA is about to go to market to sell billions in new bonds to refinance its capital construction program. "They could say to the banks, ‘If you’re unwilling to renegotiate these credit swaps, we’re not so sure you’re going to get a piece of these bonds,'” he said.
Lisberg called the idea unrealistic. "We need these major banks to provide financing for us," he said. "We’re constantly in the debt markets, it’s how we and every other large government organization works. If we’re buying equipment to use over 30 years, it makes sense to pay for it over 30 years."
In 2010, the NY MTA plugged a budget gap by laying off 1,000 workers and eliminating 750 positions. It also enacted some of the deepest subway and bus service cuts in decades. Riders absorbed a 7.5 percent fare increase in 2011, and further 7.5 percent increases are scheduled in 2013 and 2015.
The banks that hold interest rates swaps with the NY MTA are JPMorgan Chase, Citigroup, UBS, AIG, Morgan Stanley, BNP Paribas and Ambac.
Thursday, June 07, 2012
By Jim O'Grady
A transit union says in a report that one cause of the MTA's recent fare hikes and service cuts has been hiding in plain sight: financial arrangements called interest rate swaps. Those are deals the authority made with banks on 10 percent of its $33 billion of debt —deals that have gone against the authority and in favor of the banks.
Tuesday, May 15, 2012
The City Council is looking to attach some strings to banks that receive city deposits. It’s poised to pass legislation Tuesday that would give the city authority to evaluate a bank’s lending practices in low and moderate income neighborhoods when deciding which banks may be certified to receive city deposits.