Tag: Bank of America
Bank of America is revamping its board of directors. A few of its current directors are bumping up against the retirement age of 72, so the bank has announced plans to add four new faces around the conference table to support President and CEO Brian Moynihan. The four new members are Sharon Allen, Linda Hudson, Jack Bovender and R. David Yost. What experience do they bring to the table? And are they good choices, or is BofA walking in JPMorgan’s unfortunate footsteps?
Common wisdom says that JPMorgan Chase has had a relatively “good” financial crisis. Did it lose money? Yes, lots and lots. Did it get bailed out? Yes, to the tune of $25 billion. (Although some say that they had no choice in the matter and were just taking one for the team.) But as the dust settled from the worst financial crisis in modern history two things became clear:
- JPMorgan was in much better shape than its nearest competitors, Citigroup and Bank of America.
- Lloyd Blankfein, CEO of Goldman Sachs, would play the biggest bad guy in this drama. Jamie Dimon, on the other hand, was the man. (Or the least-hated banker, as the New York Times put it.)
The Federal Reserve wants to prove that it’s a strict disciplinarian. Last April it issued enforcement orders to make 10 banks address a pattern of foreclosure “misconduct and negligence”. It has just released several of the banks’ own action plans for following up with this. The plans are impressive — but for all the wrong reasons. Continue Reading
When I was a young, hard-headed kid my mother often told me: “If you don’t hear then you have to feel.” Translation: if you insist on making imprudent choices then you’d better be prepared to suffer the consequences. Mom was no Tiger Mother, but she knew how to immunize me against the next outbreak of stupidity. A swat upside the head took care of both retribution and deterrence.
When I first read about the provisional National Mortgage Settlement announced 10 days ago, it was obvious that we were in a-slap-on-the-wrist territory. There would be de minimis consequences for the five major mortgage banks accused of massive lawbreaking on foreclosures. Once again, policymakers would protect them from the painful institutional memories that might one day protect us from their tendency to crisis. But new details released on Friday make clear that it’s even worse than that. Continue Reading
Earlier this week I wrote about the increasing evidence that Libor, the most important number in the world, has been corrupted by the very banks who create it.
Libor’s the interest rate that underlies $360 trillion of financial contracts worldwide. Interest rate swaps and corporate loans, but also mortgages, student loans, credit cards and more. What’s $360 trillion dollars? That’s the economic size of 24 United States of Americas.
Hearing that the Libor panel banks — the biggest, most global in the business — may have been colluding to distort this number is like hearing that there’s a nuclear bomb buried under the Hoover Dam. Libor and its counterparts are nothing less than the foundation that underlies countless financial contracts all around the world. Continue Reading