Mike Corbat is
Citigroup chief executive officer Mike Corbat is so boring that this article about him spends considerably more time discussing Jamie Dimon and Lloyd Blankfein than it does discussing Corbat. The argument is that Corbat is a good banker for our times, in that he can run a bank and work with regulators without constantly insulting them in public, and that Dimon and Blankfein et al. would be wise to emulate him. "Be like Mike Corbat and keep your names out of the newspapers, boys," is a message with perhaps a mixed appeal to the typical Wall Street CEO. (Also: "He is also proof, say people close to JPMorgan, that a skilled but relatively unknown insider can run a large, complex financial institution, helping dispel a view that Mr. Dimon will be nearly impossible to replace as chief when he leaves the bank." Maybe Corbat can take over for Dimon?)
Somebody should really do something about repo markets
The first sentence here is, "Regulators have spent the past five years trying to siphon risk out of the financial system, but the Federal Reserve sees one major piece of unfinished business: short-term funding," which gives off a bit of an other-than-that-Mrs.-Lincoln vibe. You could make the case that "risk in the financial system" and "short-term funding" are pretty much synonymous. The approach that the Fed seems to be considering is a combination of increasing capital requirements for banks that rely heavily on repo and similar short-term funding, while also imposing minimum haircut requirements in repo transactions so that even non-banks are subject to some sort of capital-like regulation on their short-term funding.
Somebody should maybe do something about
private equity funds
In other regulatory news, apparently the Securities and Exchange Commission is bored of going after hedge funds for insider trading and its new thing might be going after private equity funds for ... something. "Although private equity firms rarely trade in publicly listed stocks, which is where insider dealing typically takes place, there could be failings around fraud, competition, antitrust, bid rigging and collusion." I don't know, sure, sounds great. The insider trading thing really is boring, is the thing; it is sordid and scandalous without having any particularly serious economic consequences. I am not convinced that collusion among private equity funds to buy companies cheaply is one of the major economic problems facing America, either, but I guess we'll find out.
Bank of America is
Here is a story about how investors like to buy bonds so a lot of companies are finding ways to sell them weird bonds. The cleverest story might be that of Bank of America's "green bond," which is just a three-year $500 million bond in which Bank of America pledges to have at least $500 million of investments in green energy financing for the next three years: "So long as the notes are outstanding, our internal records will show, at any time, the net proceeds from the issuance of the notes as allocated to the assets that meet our internal investment criteria of Eligible Green Project." What a good idea! Presumably the green-ness appeals somewhat to some investors -- the article mentions "Matt Duch, portfolio manager at Calvert Investments," who "picked up the bond for a newly launched green-bond fund." (Though that was "in part because the 'pricing was fair,' " and indeed the bonds seem to be priced in line with Bank of America's non-green debt.) And it appeals to some potential clients: The fact that you've issued a "green bond" might help you win the business of underwriting some renewable-energy company's stock offering. And, with money being fungible and with financing renewables businesses being something you'd do anyway (and, presumably, about as profitable as financing, say, Stone Energy Corporation, the offshore-Gulf-of-Mexico-and-onshore-shale-gas-drilling company whose $475 million bond offering Bank of America led a week before issuing its green bonds), the positive PR and warm fuzzy feelings cost you basically nothing.
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