BUSINESS
May 23, 2012 | By Jim Puzzanghera, Los Angeles Times
WASHINGTON — The public won't be protected from the type of risky bets that led to the huge trading loss at JPMorgan Chase & Co. until new rules are approved to allow better monitoring of complicated derivatives transactions, two key federal regulators told a Senate committee. As it was, the heads of the Securities and Exchange Commission and the Commodity Futures Trading Commission said Tuesday that they learned of the unusual trading activity that led to JPMorgan's $2.3-billion trading loss through media reports.
BUSINESS
May 23, 2012 | By Jim Puzzanghera, Los Angeles Times
WASHINGTON - The consumer financial watchdog is taking aim at reloadable prepaid cards, moving to regulate a fast-growing product that has become a popular alternative to checking accounts for lower-income Americans and a new source of fees for some banks. Consumer advocates have been pushing for regulation of the cards, which look like conventional credit cards or debit cards tied to bank accounts. But the prepaid cards are not required to offer the same consumer protections, such as clear disclosure of fees and caps on losses if stolen.
BUSINESS
May 23, 2012 | By Jim Puzzanghera and Stuart Pfeifer, Los Angeles Times
WASHINGTON — Already grappling with regulatory reviews of its troubled initial public offering, Facebook Inc. and the Wall Street banks that shepherded the deal are now under fire from lawmakers and lawyers. Two congressional committees said Wednesday that they would conduct preliminary inquiries into the IPO. And attorneys filed two separate lawsuits alleging that average investors were misled in the days before Facebook shares began trading Friday. "Shareholders suffered billions of dollars in losses," said Darren Robbins, a partner in the San Diego law firm of Robbins Geller Rudman & Dow, which filed one of the suits.
BUSINESS
May 22, 2012 | Bloomberg News
Directors at the Federal Reserve's regional banks saw a pickup in the pace of economic growth last month as housing, motor vehicle sales and consumer spending gained strength. "Directors noted further improvement in economic activity, and they anticipated growth would continue at a moderate pace," according to minutes released Tuesday in Washington summarizing discussions of meetings in April. Board members of the 12 banks "saw the incoming data on consumer spending as a bit more robust than they had expected but cautioned that these gains might be attributable to unseasonably warm winter weather," the minutes said.
OPINION
May 22, 2012 | Lynn Stout, Lynn Stout is a professor of business law at Cornell University. Her most recent book is "The Shareholder Value Myth: How Putting Shareholder Harms Investors, Corporations, and the Public."
Addiction counselors tell their clients, "We can't help you until you admit you have a problem. " It's time for American financial institutions to admit they have a gambling problem. JPMorgan Chase & Co. last week announced losses, perhaps greater than $5 billion, from bad derivatives bets. Last year we saw UBS suddenly lose $2.3 billion and the hedge fund MF Global implode from derivatives trading. And let's not forget the 2008 failures of American International Group Inc. and Lehman Bros., which triggered an economic crisis we're still recovering from.
WORLD
May 19, 2012 | By Anthee Carassava, Los Angeles Times
ATHENS - Eva, a well-groomed pensioner, grasps her creamy white purse, glancing impatiently at her gold Cartier watch as she waits for the manager of an Athens bank. She is offered tea, cookies and orange juice, none of which the state bank usually provides, and none of which Eva accepts. "I'm concerned," says the 82-year-old, who declined to give her last name because she was involved in a private transaction. "I'm thinking of withdrawing all my savings. " Greek banks have been bleeding money since inconclusive elections this month, and the rise of a Marxist-Leninist leader bent on bustingBerlin'sausterity crusade, plunged the country into the biggest political crisis in decades and raised the specter of a devastating default.