Methinks we’ll need a 12-step program for this
Posted on November 4, 2009 at 1:25 pm
Dylan Ratigan gets on the soapbox and outlines a few steps Congress should follow to overhaul ‘too big to fail’ and produce some real financial regulatory reform. Among the thoughts guiding his plan: “Fortunes should not be made in minutes, but over years.”
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The RTC to rise again?
Posted on September 9, 2009 at 8:11 am
Investment Dealers’ Digest says banking regulators are seriously considering creating a bad-asset management entity modeled on the Resolution Trust Corp. from 20 years ago.
“They are very, very keen to ensure it does not repeat itself,” says the industry participant who attended meetings with the FDIC about the RTC. “My guess is they’ll have the spirit of the PPIP investment plan where the investors share both upside and downside with the U.S. government.”
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Good credit card history? Don’t matter much
Posted on August 28, 2009 at 10:36 amA recent study by credit scoring firm FICO showed that 24 million people without “new risk triggers in their credit reports” had their credit limits slashed from last October until April.
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The mother of all hiring sprees
Posted on August 10, 2009 at 6:35 amInsurer Liberty National wants to hire 2,500 agents in one day later this month. Nashville and Franklin will be two of the more than 100 locations where aspiring sellers can sign up.
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Corker wants more powerful FDIC
Posted on July 31, 2009 at 6:34 amJosh Flory passes on word of legislation co-written by Bob Corker that would give the Federal Deposit Insurance Corp. power to shut down bank holding companies.
I think it’s important to create this mechanism and provide clarity so that as we approach broader regulatory reform we don’t have the moral hazard of a ‘too big to fail’ mentality.
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Bair pushes for ‘comprehensive resolution regime’
Posted on July 23, 2009 at 7:44 amBloomberg News says FDIC Chairman Sheila Bair will today tell lawmakers they should collect cash from the country’s large banks for a fund that would manage the bailouts of failed financial companies. Oh yeah, and throw the bums out.
“In contrast to the current situation, this new regime would not focus on propping up the current firm and its management,” Bair said. “Without a new comprehensive resolution regime, we will be forced to repeat the costly, ad hoc responses of the last year.”
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Market watchers see turning point in CIT rescue
Posted on July 21, 2009 at 8:13 amThe emergency bondholder funding for lender CIT Group (Ticker: CIT) is the clearest signal yet that investors are again increasing their risk appetite when it comes to financials.
“You’ve got private money coming in and essentially giving a vote of confidence” in banks’ future profitability, said Vincent Reinhart, former director of the Federal Reserve’s monetary affairs division. “It’s encouraging.”
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Private equity watches, waits
Posted on July 1, 2009 at 11:36 amBuyout funds and other private-equity investors continue to raise money, but they also continue to slow the pace of putting that cash to work. In the health care sector so important to Nashville, the money invested in the second quarter was down 75 percent from a year ago.
The decrease in private equity investment is not due to a lack of available capital, which remains at an all time high of $400 billion. PE investors continue to raise capital and currently have enough dry powder to more than support the combined deal activity of 2004, 2005 and 2006 with the use of moderate leverage.
Check out PitchBook’s full set of numbers here.
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BB&T moves to pay back TARP
Posted on May 11, 2009 at 8:16 amThe Carolina-based bank, which is the Nashville area’s 13th-largest deposit-taker and the anchor tenant in The Gulch’s Terrazzo tower, will raise $1.5 billion and cut its dividend.
“We have a long and proud history of paying dividends and understand how important the dividend is to our shareholders, so this decision to temporarily reduce the dividend was extremely difficult for the board and, for me personally, it marks the worst day in my 37 year career.
However, we firmly believe this action is in the long-term best interests of our shareholders and our company because of the risk and uncertainty associated with being a TARP participant. In addition, our current earnings, while superior to our peers, are not likely to justify our $.47 dividend in the near term.”
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Corker sees ‘glimmer of hope’ in financial sector
Posted on May 10, 2009 at 10:35 pm“There are glimmers of hope” in the financial sector, Tennessee Sen. Bob Corker said Sunday on CNN’s State of the Union when asked if the industry had turned a corner.
“I think it was a positive step,” said Corker of the Obama administrations’ recent “stress tests” on the nation’s largest banks.
“But there will possibly be additional government dollars [for some financial institutions]. I think that hasn’t fully been said and I think that what we’ve got to be concerned about as we move into the future is not causing [the Troubled Asset Relief Program] to be codified so that it’s there forever.”
“I actually am feeling better about it. I really am,” Corker, a member of the Senate Banking Committee, added.
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The end of too-big-to-fail
Posted on May 8, 2009 at 8:07 pmAnd the beginning of what could turn into a bit of a fire sale of banking and other financial assets. With the stress tests behind us, more people are saying the country’s financial behemoths need to be slimmed down.
Some analysts say recent events highlight a fundamental problem that has been somewhat ignored for years; the financial supermarket structure of the big institutions makes them difficult, if not, impossible to operate with great success.
“Investors will say, ‘That business unit hidden in there; let’s spin that off,’” says Sorrentino. “Either the regulators are going to force it or the shareholders are going force it.”
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Dissecting the stress tests
Posted on May 7, 2009 at 10:14 pm
First, all the banks’ results neatly in a row. Among the banks with a notable presence in Nashville, only U.S. Bank and BB&T were deemed not to need new capital. BofA, Wells Fargo, Regions, SunTrust and Fifth Third must raise a combined $53 billion.
Then, from the AP comes a rundown of just how some of the affected players plan to raise the billions they need as well as word from those planning to repay TARP ASAP.
And via the Journal, a measured look at how the once-maligned concept of stress tests – Wells chief Dick Kovacevich not long ago called them ‘asinine’ – may actually come to be seen as the positive tipping point when we collectively caught our breath.
Investors fretted for weeks that the Treasury wanted to nationalize parts of the banking system, despite repeated efforts by Mr. Geithner and others to dispel that idea.
In retrospect, the tests were akin to hitting the pause button. The period allowed Mr. Geithner to buy time for the government’s evolving approach to the banking crisis, which had previously been ad hoc and heavily criticized.
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Six becomes 10 in stress tests
Posted on May 5, 2009 at 10:55 pmSo says the Journal:
It’s possible Wall Street is being overly optimistic about the impact of the results and the resulting dash by banks to bolster capital. One big risk worrying industry officials is that the market will view banks on the list as insolvent when the official results are announced Thursday, even though Fed officials have repeatedly said that’s not the case.
SEE ALSO: BofA may need 34 really big ones and Are Regions and SunTrust part of The Stress Test Six?
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Senate says no to cramdowns
Posted on May 1, 2009 at 9:05 amLegislation to allow bankruptcy judges to amend mortgage rates didn’t even get close to passing yesterday.
It also demonstrates that, even though Democrats are close to gaining 60 votes in the Senate with the recent decision by Senator Arlen Specter to leave the Republican Party, the increasing number of Democrats does not prevent the Republicans — with the support of a handful of moderate or conservative Democrats — from blocking legislation. Mr. Specter voted against the provision.
We weren’t crooked… just maybe a little incompetent
Posted on April 30, 2009 at 12:18 pmHighly embattled feeder fund the Fairfield Greenwich Group, co-founded by hometown boy Walter Noel, has fired back over fraud accusations from Massachusetts regulators for its role in the Bernard Madoff debacle.
The company stands by its monitoring of its now-evaporated Sentry funds and claims PricewaterhouseCoopers consistently turned in clean audit reports when it examined them. They claim they were simply duped like everyone else.
However, judging by conversations we’ve had with hedge fund managers who did not invest with Madoff due to his complete and utter lack of transparency, FGG’s chances of convincing the world it was paying close enough attention are not high.
More detail is available here.
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