Monday, May 14, 2012

Ally's mortgage unit files Chapter 11

Welcome to the morning roundup. Here's a look at today's banking and finance headlines.

Bankruptcy. Ally Financial Inc.'s troubled mortgage unit, ResCap, filed for bankruptcy protection early Monday, the Wall Street Journal reports. The lender hopes to focus its efforts on its core auto-lending and online banking businesses, but it still faces significant risks.

JPMorgan. The fallout from JPMorgan Chase & Co.'s $2 billion trading loss continues. The executive who oversaw the trade is set to resign. And the debacle raises questions about whether federal regulators were "asleep at the wheel," Reuters writes.

Bank trading. The JPMorgan loss puts the spotlight on other big banks, the New York Times writes, saying even banks that focus mainly on "good, old-fashioned lending" participate in high-stakes trading. That's creating a headache for regulators crafting new rules to prevent another financial meltdown.

Stocks down. U.S. stock futures declined this morning on concerns over Greece, with Bank of America and other lenders falling, Bloomberg reports.