Thursday, May 31, 2012

Report: Citigroup debt will underperform peers

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

Citi debt. A research report being published today says debt issued by Citigroup Inc. will perform worse over the next six months than bonds issued by the bank's peers, the Wall Street Journal reports. Fixed-income research company Gimme Credit says in the report that investors are underestimating the risks posed by the lender's push into emerging markets.

JPM. Bloomberg details how JPMorgan Chase & Co. CEO Jamie Dimon railed against higher capital requirements at the same time his bank was making bets that led to the recent $2 billion loss. Sources say the bank would have been better off building more capital - the only "true protection" against losses.

More on Dimon. An MIT professor writes in the New York Times that it's difficult to rely on the Federal Reserve to regulate JPMorgan while its CEO continues to sit on the board of the New York Fed.

Additional stake. Morgan Stanley advised Citigroup on Thursday of its intention to buy an additional 14 percent stake in Morgan Stanley Smith Barney, CNBC reports. The Wall Street firm currently owns 51 percent of Morgan Stanley Smith Barney.

Private equity. Former General Electric CEO Jack Welch offers this take on private equity - which has become a hot-button issue in this year's political campaigns - in a Reuters column. He asks, "Mr. Vice-President, where in the world are you getting your ideas about private equity?"