Wednesday, June 27, 2012

Investors joining call to break up biggest banks

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

Investors joining call to break up banks. Some investors are now joining the call to break up the nation's largest banks after stock prices have fallen such that the pieces are worth more than the conglomerate, Bloomberg says. Many universal banks are now trading at a discount to tangible book value, and some analysts say breaking them apart could double shareholder value. Bank of America CEO Brian Moynihan and JPMorgan Chase chief Jamie Dimon have both defended their banks' size in recent weeks.

Barclays settles Libor charges. Barclays will pay $450 million to settle charges that it conspired with other banks to manipulate the key Libor interest rate, The New York Times reports. The settlement could pave the way for similar settlements with U.S. banks like Bank of America and JPMorgan Chase, which also give information to help set the rate.

Anti-foreclosure laws may be hurting. Experts say that laws passed after the financial crisis to make foreclosures more difficult may be prolonging the housing slump, Reuters reports. A large backlog of properties with delinquent borrowers continues to hang over the market.

Forced place suit. Bank of America has now been sued in Florida over its forced-place insurance practices, in which the bank buys a high-priced homeowners insurance policy for a borrower after his or her policy lapses, Bloomberg reports. Forced place has also drawn the attention of New York investigators.

Chinese banks expanding in Australia. China's largest banks are expanding their lending in Australia as European banks pull back amid the continents debt crisis, the Wall Street Journal says. The Industrial & Commercial Bank of China and the China Construction Bank are the biggest players.