Friday, July 27, 2012

Is the banking industry's power waning?

Welcome to the morning roundup. Here's a look at what's news in banking and finance.

Bank power. Despite rebounding quickly from the financial crisis, the banking industry's power is under siege now in the wake of the massive trading loss at JPMorgan Chase and the Libor-rigging scandal at Barclays, The New York Times' Floyd Norris says. The industry's' political clout may have peaked this spring.

Fed's 'nuclear options.' Bank of America Merrill Lynch economists laid out what they believe the Federal Reserve's "nuclear options" are to get the economy moving as the central bank faces increasing pressure to act, the Wall Street Journal reports. These include putting a ceiling on bond yields, weakening the dollar or trying to push inflation.

CFPB enforcement risk. Other banks are at risk of fines from the Consumer Financial Protection Bureau after the new regulator took its first enforcement action against Capital One, Bloomberg says. Capital One was fined $210 million for what the CFPB termed deceptive, high-pressure sales tactics to sell credit monitoring and payment protection programs. But the contractors Capital One used to sell these products also do significant business with Bank of America and Wells Fargo, leaving them open to possible settlements.

Growth slowing. U.S. economic growth slowed in the second quarter, the Department of Commerce said Friday, increasing worries about the recovery, the Wall Street Journal reports. GDP grew at an annualized 1.5 percent, down from 2 percent growth in the first quarter.


Anonymous said...

Still blacking out Audit The Fed?