Swiss Banks To Yanks: Get Lost
(AP Photo/Walter Bieri, Keystone)
UBS AG and Credit Suisse Group AG have given Americans a choice: move your money to special accounts they have created in the U.S. or lose the account, Bloomberg reports.
"American citizens are starting to feel like they're Typhoid Mary," Charles C. Adams, managing partner at the law firm Hogan & Hartson LLP in Geneva, told Bloomberg. "The Swiss simply don't want American customers because it requires so much infrastructure and hassle that they don't make any money."
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Salaries Up, Bonuses Down In Citi's New Plan
(AP / CBS)
Under the plan, which has been in the works for several months, top bankers would get their annual salaries bumped by up to 50 percent.
The banking giant will also introduce a new stock option program, giving employees a share of common stock for every restricted share they hold – the ultimate goal being to give workers incentive to stay at the company longer.
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TARP Panel: Let's Do Stress Tests Again
(CBS)
Warren, a Harvard University professor, said that the country had "already blown past the worst-case scenario on unemployment."
The stress tests, whose results were made public last month, were designed to gauge how much additional capital a bank would need to weather further deterioration in the economy.
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Obama Gravitating Toward Single Bank Regulator
4883225The White House is moving closer to recommending the creation of a single agency to regulate all banks, according to a Wall Street Journal report Wednesday.
That would move the U.S. away from the network of federal regulators that was seemingly powerless to protect the country from the financial crisis that has choked the economy since last year.
Treasury Secretary Timothy Geithner and other officials are expected to include the recommendation in a proposal to Congress in the next few weeks, according to the report.
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That would move the U.S. away from the network of federal regulators that was seemingly powerless to protect the country from the financial crisis that has choked the economy since last year.
Treasury Secretary Timothy Geithner and other officials are expected to include the recommendation in a proposal to Congress in the next few weeks, according to the report.
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Fed Reveals Stress Test Results
The Federal Reserve on Thursday revealed the results of its bank "stress tests," showing that 10 of the nation's 19 largest banks would need more capital to withstand losses and meet the credit needs of their customers in the event of a more severe recession.
Officially know as the Supervisory Capital Assessment Program (SCAP), the stress tests involved a comprehensive assessment by the Federal Reserve and other bank supervisors of the capital held by the 19 largest U.S. bank holding companies. The Fed decided to make the results of the stress test public to restore confidence in these financial institutions.
The following chart shows the additional capital buffer the Fed suggests each bank needs. The 10 banks in need of additional capital have until June 8 to come up with a detailed plan for putting that capital buffer in place, and they must implement the plan by early November.
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Officially know as the Supervisory Capital Assessment Program (SCAP), the stress tests involved a comprehensive assessment by the Federal Reserve and other bank supervisors of the capital held by the 19 largest U.S. bank holding companies. The Fed decided to make the results of the stress test public to restore confidence in these financial institutions.
The following chart shows the additional capital buffer the Fed suggests each bank needs. The 10 banks in need of additional capital have until June 8 to come up with a detailed plan for putting that capital buffer in place, and they must implement the plan by early November.
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Watchdog: "All The Chips Are On The Table" With Stress Tests
(CBS)
"All the chips are on the table," Elizabeth Warren, chair of the congressional oversight panel for TARP funds, said on CBS' The Early Show Thursday.
While the tests are designed to evaluate the financial health of the country's 19 largest banks, they also serve as a test of the government's ability to manage the credit crisis that has choked economic growth in the nation.
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U.S. To Bank Of America: You Need $33.9B
(AP Photo)
Should the bank be unable to raise the $33.9 billion, it would have to rely on government aid, which is roughly $45 billion from the Troubled Asset Relief Program, a bank executive told the newspaper.
"We're not happy about it because it's still a big number," J. Steele Alphin, the bank's chief administrative officer, said. "We think it should be a bit less at the end of the day."
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Report: 10 Banks May Need Extra Cash
4965813Government stress tests for the banking industry aren't supposed to be made public until Thursday, but that hasn't stopped a steady stream of reported results from flowing in.
The Federal Reserve plans to release those results to bank executives Tuesday and they may show about 10 of the 19 largest banks in the country need additional capital to withstand a hypothetically worsening recession, according to a Bloomberg report.
Recent reports indicate that Citigroup, Bank of America and Wells Fargo are among the companies that will need some extra cash. Among the options to raise capital are selling assets, raising funds from private investors or converting preferred shares into common stock.
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The Federal Reserve plans to release those results to bank executives Tuesday and they may show about 10 of the 19 largest banks in the country need additional capital to withstand a hypothetically worsening recession, according to a Bloomberg report.
Recent reports indicate that Citigroup, Bank of America and Wells Fargo are among the companies that will need some extra cash. Among the options to raise capital are selling assets, raising funds from private investors or converting preferred shares into common stock.
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Citi Tries To Avoid U.S. Ownership
(AP / CBS)
Citigroup, which is awaiting the release of its government stress test results this week, has been told by regulators that it won't need anymore taxpayer money, Bloomberg sources said. But the government is now looking at how much of their preferred stock, which they received after giving the bank $52 billion in bailout money, will be converted into common shares. The government already could convert up to $25 billion into common stock, which would give it a 36 percent ownership stake in the company, according to the terms of a February agreement.
Citigroup may be hoping that raising additional private capital will keep the U.S. from converting any of the remaining $27 billion into common stock – a move that would give them a controlling interest in the bank.
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Bank Stress Test Release Delayed
CBS News has learned that regulators now expect to release the results of the bank stress tests to the public on the afternoon of May 7th. It will probably happen after the closing bell.
The results where scheduled to have been released on May 4th.
Guy Campanile is a CBS Evening News business producer.
The results where scheduled to have been released on May 4th.
Guy Campanile is a CBS Evening News business producer.
Report: BoA, Citi May Need More Cash
4965813Bank of America and Citigroup may need additional cash infusions based on the results of their government-imposed stress tests, according to a Wall Street Journal report Tuesday.
Federal regulators have told the banks that preliminary findings indicate they might need to raise additional capital to buffer their businesses from further losses. Bank of America alone might require billions more, according to sources familiar with the bank.
Executives at the banks, which have already received $90 billion in taxpayer assistance, object to the initial findings and plan a rebuttal, sources told the Journal. Banks have until this week to lodge formal appeals of the test results with regulators.
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Federal regulators have told the banks that preliminary findings indicate they might need to raise additional capital to buffer their businesses from further losses. Bank of America alone might require billions more, according to sources familiar with the bank.
Executives at the banks, which have already received $90 billion in taxpayer assistance, object to the initial findings and plan a rebuttal, sources told the Journal. Banks have until this week to lodge formal appeals of the test results with regulators.
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Ken, Ben, Hank And A Stick of Dynamite
Bank of America CEO Kenneth Lewis told New York State regulators in February that he was ordered by Federal Reserve Chairman Ben Bernanke and former Treasury Secretary Henry Paulson not to discuss the deep problems emerging in its deal to acquire Merrill Lynch.
According to documents obtained by CBS News, Lewis told investigators Paulson and Bernanke threatened to have the Bank of America CEO and fellow management removed if they did not move forward with the troubled acquisition at the height of the financial crisis. Lewis was beginning to have second thoughts about the risk Merrill Lynch's balance sheet might pose to Bank of America.
Lewis: "The situation was that everyone felt like the deal needed to be completed and to be able to say that, or that they would impose a big risk to the financial system if it would not."
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According to documents obtained by CBS News, Lewis told investigators Paulson and Bernanke threatened to have the Bank of America CEO and fellow management removed if they did not move forward with the troubled acquisition at the height of the financial crisis. Lewis was beginning to have second thoughts about the risk Merrill Lynch's balance sheet might pose to Bank of America.
Under questioning by New York State attorney Benjamin Lawsky, Lewis said:
New York Attorney General Andrew Cuomo's April 23 letter to Sen. Chris Dodd, Rep. Barney Frank, SEC chairman Mary Schapiro and others describing the pressure that Fed chairman Ben Bernanke and then-Treasury Secretary Henry Paulson put on Bank of America CEO Ken Lewis to go through with the acquisition of Merrill-Lynch.
Lewis: "The situation was that everyone felt like the deal needed to be completed and to be able to say that, or that they would impose a big risk to the financial system if it would not."
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Summers: A Long Road Ahead
4732106While the U.S. economy is showing some "glimmers of hope," as President Obama likes to say, the end of the downward spiral is not in sight. Speaking on NBC's "Meet the Press," director of the National Economic Council Lawrence Summers said that despite mixed statistics after a period with no positive data, the economic recovery is "a long road and it is going to take time." Mr. Obama made similar comments at a speech on April 14 at Georgetown University, saying that "by no means are we out of the woods."
Summers pointed to the efforts of the Obama administration in nearly 100 days in office to get the economy back on track. Long term, the country needs a less leveraged economy, he said, with a much better regulatory financial system; a culture of savings and elimination of marketing credit in ways that addict people to it; and getting the government back to the place it had in the 1990s, when it was a contributor rather than a drain on the economy.
But, Summers cautioned, "We can't know with certainty what is going to happen next." The uncertainty is the big challenge for the Obama team. The economic problems are like a 100-year flood, and the government can't repair the levees or fill the sandbags fast enough. With stress tests, bailouts, tax relief for 95 percent of Americans, stimulus checks and emerging financial regulations, job losses continue to mount and credit is not unfrozen.
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Summers pointed to the efforts of the Obama administration in nearly 100 days in office to get the economy back on track. Long term, the country needs a less leveraged economy, he said, with a much better regulatory financial system; a culture of savings and elimination of marketing credit in ways that addict people to it; and getting the government back to the place it had in the 1990s, when it was a contributor rather than a drain on the economy.
But, Summers cautioned, "We can't know with certainty what is going to happen next." The uncertainty is the big challenge for the Obama team. The economic problems are like a 100-year flood, and the government can't repair the levees or fill the sandbags fast enough. With stress tests, bailouts, tax relief for 95 percent of Americans, stimulus checks and emerging financial regulations, job losses continue to mount and credit is not unfrozen.
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Mum's The Word On Banks' Stress Tests
(AP)
The Fed ordered financial institutions to keep the results of their stress tests quiet for fear that the results might spook a stock market that is just beginning to show signs of optimism, reports Bloomberg.
The tests are designed to gauge a company's financial health and ability to withstand more economic turmoil – specifically whether they have enough cash on hand to weather continued unemployment hikes and further plunges in the real estate market.
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Wall Street Has A Good Day – For Once
(iStockphoto)
The Dow Jones industrial average rose 225 points, or 2.87 percent, in late afternoon trading on the strength of an announcement by Wells Fargo $ Co. that it had seen a profitable first-quarter.
Wall Street's spirits were also bolstered by a drop in jobless claims last week. Claims fell to a seasonally adjusted 654,000, down from a 674,000 the previous week. The news surprised analysts, who had predicted weaker earnings for the bank and rising rates of unemployment.
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