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Germany's biggest bank Deutsche Bank is described here in WSJ as one of the banking industry's biggest basket cases, having suffered legal investigations, management turnover and legal fines over many years. This time the German government is working on merging the bank with Commerzbank AG in a last effort to straighten out the huge mess and losses at the bank, says WSJ. A former JP Morgan manager, Mr. Zames, 48 years old, who joined the bank at the time of the London whale scandal is now working for Cerberus Capital which is acting in a multilayered relationship with Deutsche Bank  as adviser to management as well as having complex financial dealings with Deutsche Bank. In the process says WSJ he would be rescuing a soured bet on Deutsche Bank by Cerberus which owns 3% of Deutsche Bank as well as 5% fo Commerzbank. The investment made in 2017 was shown as $1.1 billion but is worth half that today. The arrangement is unusual for Deutsche Bank and shows how far the bank has changed from its early years as Germany's leading bank. It was founded in 1870 and in 1998 acquired Bankers Trust for a presence on Wall Street. This turned out to be a bad investment as $4 billion premium paid for Bankers Trust was later written off. Deutsche Bank never really recovered from these moves into Wall Street banking. The SDP in the German coalition government sees the merger with Commerzbank as one more move to get out of the mess, though no one really knows considering the complex dealings of the bank and its problems with legal authorites in Germany. ...

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CreditSights, a New York research firm says about $33 billion in losses from home equity loans will hit the five largest banks in the latter part of 2010, an amount equal to what they expect in earnings for 2010. This would have an adverse effect on the banks and has the potential to stall the economic recovery.

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The rate rigging for foreign exchange rates by major banks leads to a legal settlement in Nov. 2014. The Financial Conduct Authority of Britain fines major banks 1.1 billion pounds. CFTC of the U.S. fined the banks $1.4 billion, the Office of the Comptroller of the Currency imposed a fine of $950 million, and Swiss regulators a fine of $138 million.

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New hurdle for the banks. Floating rate notes which the banks use come due in over the next year or so beginning in September and banks will have to pay off at least $787 billion in floating rate notes and other medium term obligations by the end of 2009 according to analyst at JP Morgan Chase Alex Roever. As banks scramble for funds to pay off these notes they be less willing to make new loans worsening the credit crunch in the USA and Europe.

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Compared to the larger banks which have 10%, the smaller banks have about 37% of their assets in commercial properties.

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Standard & Poor's lowered the long-term debt ratings of France's BNP Paribas bank from double-A to double-A minus. S&P said the BNP Paribas bank was "more vulnerable to adverse conditions than had been previously anticipated."

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Steve Lee Myers reporting from Moscow and St. Petersburg, Jo Becker from Washington and London, and Jim Yardley from Nicosia, Cyprus, provide this extraordinary and exceptional report on the rise of a small group of friends, mostly from Mr. Putin's time in St. Petersburg, into a new sort of oligarchy replacing the old one under Mr. Yeltsin. This includes more familiar names such as Sechin at Rosneft, but also less familiar names such as Mr. Kovalchuk, chairman of Bank Rossiya, which owns major television and radio stations and newspapers in Russia. M. Kovalchuk is described as having acquired many of these media properties at a fraction of their real value. Bank Rossiya assumed management of assets of Gazprombank, and Gazprom bank purchased Gazprom Media with five television and a number of radio stations for $166 million, when Medvedev, a Putin associate put the value at $7.5 billion 2 years following the acquisition, according to this report. Other assets acquired in this manner include Channel 5 and Ren TV, giving Putin's inner circle control of the media and reducing any critical or different views on issues facing Russia. Many of Gazprom's assets were transferred to Bank Rossiya, say critics, including insurer Sogaz which was acquired for $100 million, later valued at $2 billion, says the report. Names on the this inner circle also include Yakunin, head of Russian Railways, also include names like Fursenko and Timchenko. Most of the people in this inner circle are now targets of western sanctions. Missing in this report is mention that that this inner circle of the second term as president replaces the larger circle of the first terms as president and prime minister, with Putin benefitting from experts and advisors in the first terms. That circle included Finance minister Kudrin known for his successful management of the economy, and others who left the administration after flawed parliamentary elections. Even prime minister Medvedev is not mentioned as part of this inner circle, suggesting a degree of isolation which could be perilous for the Russian economy as it deprives the Russian president of different opinion and useful advice. This is a pattern seen in many emerging market countries which experience corruption during the period of industrial development. A pattern seen also in China under the Communist Party. And in Venezuela where a new Bolivarist class was created. In emerging market democracies such as India and Turkey the problem is also present, except that in India the recent open election led to the ouster of the Congress led government with many cases of corruption in its second term. A similiar election led to a new government in Indonesia, showing that there is another way beyond the Putin Way. Behind the protests in Hong Kong and in Russia, as well as in India, were the huge gaps in wealth and the growing inequality, corruption, lack of responsiveness of ruling governments. In Russia this takes another dimension with efforts to control the internet and media, and efforts to spread this style of democracy. This has created problems in the Putin government's relations with western nations having open societies and free media, and unwilling to accept a distorted model of democracy. Another less noticed aspect of the evolution of these emerging markets is that upto a point development proceeds even accelerates even in the presence of corruption, and then reaches a point where development and growth slows with problems of corruption, mismanagement of resources, declining productivity, economic and political errors, or unfavorable external environment. India faced this problem in 2012-2013, Russia is likely to face this in 2015, and China faces the prospect of growth slowdown by 2016. This feature of emerging markets also reminds one of the frequently quoted old English saying by Lord Acton- "Power tends to corrupt, and absolute power corrupts absolutely." An idea also attributed to William Pitt the Elder who said- "unlimited power tends to corrupt the minds of those who possess it." ...

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The title says it all. The Jobs bank the United Autoworkers trade union in the US setup in GM in 1984 threatened American automaker GM's very survival in 2006. It put workers who were not needed at GM in a jobs bank. It basically meant the idled workers -many of them close to retirement -would stay there till they retired doing nothing collecting full salary. As Mohandas Gandhi had done for India in Hind Swaraj in 1910, the American labor movement needs to look at itself in the mirror if labor is to find its way into a world of dignity and fairness in wages that Mr.Biden truly seeks for American workers.   It was setup when GM had 45% of the US market and 415,000 workers. By 2006 113,000 workers were not needed with GM having lost marketshare to Japanese makers and the Jobs bank was costing GM about $10 million a week, half a billion a year threatening its survival. The Labor movement and the UAW union did nothing to fight its own membership and set it on the right course in union with management, putting at risk the very foundation that labor had put in place since Wilson, FDR and Truman for  fairness in wages and working conditions. Jeremy Peters tells the story in the NYT. That it was recent as 2006 and shows how much had gone wrong with the labor movement and the failure of its leaders to do the right thing. The Jobs Bank says NYT was intended to prevent manufacturers from shifting manufacturing overseas, instead it did just that by undermining confidence in unions and the American labor movement, and in American workers. Two crippling wars initiated by Republicans Bush and continued by Democrat Obama, disinvestment in American manufacturing, companies like Apple shifting their entire manufacturing through outshoring to Taiwan and China, the 2009 crisis from deregulation of American banks, led to the loss of not one, but two decades for America. In today's news a modest $2 in minimum wage increase from $15 to $17 over 3 years is all that New York governor Kathy Hochul could get- even though Assembly Democrats were asking for more- to give American workers and families a fair wage to meet the cost of living crisis.  ...

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Royal Bank of Canada acquired Centura Banks Inc. -a regional lender based in N. Carolina- in 2001 for $2.3 billion. It then made a number of acquisitions including $1.6 billion for Alabama National Bancorp in 2008. The U.S. branch network is fragmented with no major presence in big cities. RBC also failed to integrate the U.S. operations after the acquisitions. This approach hurt RBC because the strong risk management in the Canadian operations was not applied in the U.S. The result is a large number of nonperforming loans. In the 1st quarter 2011, RBC reported this was 6.8% of total assets. In 2009 Royal Bank of Canada took a 1 billion Canadian dollar writedown on the U.S. business RBC Bank. Now the operations are being put up for sale.

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Italy's third largest bank, Banca Monte dei Paschi di Siena SpA received 2 billion euros of aid from the Italian government. The aid would be given through a bond buying program. Under a program setup earlier by Economy Minister Tremonti banks issued bonds that were bought by the Italian government and counted as regulatory capital of the banks.

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Total's new CEO, Patrick Pouyanne, is moving ahead with plans for the $27 billion Russian Arctic Yamal LNG project. As China shifts away from coal with increased imports of LNG and pipeline natural gas, it is keen on providing financing for the project. Chinese banks will provide the bulk of the financing. Pouyanne disclosed in an WSJ interview that this would be $15 billion in Chinese bank financing to be arranged in 2015. Most of the LNG will go to meet China's needs. Partners in the Yamal project are OAO Novatek of Russia, and China National Petroleum Corporation. OAO Novatek's major shareholder is on the western sanctions list making it difficult to obtain financing from western banks. This makes the project riskier because of foreign exchange risks taken on by Total SA which are to hedge against.

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A former chief executive of Anglo Irish Bank, David Drumm, is jailed for 6 years for his role in a $7.2 billion banking fraud. The deals involved were part of the period when Ireland experienced a severe banking crisis in 2008 as a result of overleveraging of banks and faulty transactions leading to Ireland's lost decade. The conviction comes 10 years after the crisis.

The government of Ireland at the time made the controversial decision of guaranteeing all the debt of banks including Anglo Irish bank for runaway debt, coming under much criticism.

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Andrew Rosenfeld, a senior lecturer at the University of Chicago Law School, and chief executive of an investment advisory firm, says the Public-Private Investment Program proposed by Secretary Geithner has serious flaws. It risks government money, and expects too little from private investors. The government will essentially finance the private investor's purchase of these toxic assets at an auction, with the private investors putting some money of their own, to buy these assets at prices emerging from the auction. It runs right smack into the problem that Secretary Paulson under President Bush faced when he suggested the auction plan as a way for these toxic assets to be sold off to buyers. It was never clear how shuch an auction would work, and whether it would work at all. Meantime the worsening credit crisis required direct injection of capital into banks. Now Secretary Paulson's abandoned effort has been essentially revived in the Geithner program, with the same problems but with the carrot of government taking up most of the risk with its financing. Rosenfeld argues that under this plan the government assumes all the risk of losses, and if private investors make too much money off of it it will create a public outcry and the risk of an AIG type situation. This might lead to lower bids and the money generated for the banks might end up being too small to make a difference. There is a better way he says, and this is for the government using existing authority to seize banks that look insolvent. Its fairer because the government will own the toxic asets, and the bank, and the proceeds for the sale of the bank, and these would be offsetting the cash that it would inject to recapitalize the bank. The way it would do it is to inject cash in the form of Treasury notes as equity in the bank, and at the same time remove the bank's toxic assets and place them in the basement of the Treasury building, while it waits to see what they turn out to be worth. Bank regulators would swap Treasury securties for the toxic assets "at par," which is at the amount of the original purchase price of assets removed. Within a short time, a month or a few months, the bank could be sold to private investors. This is sounder because it takes away the pricing problem which looks like its never going to be resolved, as banks and investors are never going to agree on toxic asset price. And the new bank could start clean and start lending flowing in the economy. If the bank turns out to be so badly managed and with so many bad bets that it cannnot be sold, its essentially insolvent and irrecoverable, so it should be liquidated. Nobel winner Krugman says some of the same things in his columns in the NYT. He has a sense of despair seeing the return of the failed Paulson solution of auctions with a new twist, even as the economy is flailing in the wind, with job loss numbers over 600,000 and jumping each month....

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Sallie Krawcheck and Joe Price will be leaving Bank of America. David Darnell and Tom Montag were appointed co-chief operating officers of Bank of America. Bank of America stock declined by 50% by September 2011. Montag will oversee the bank's banking and marketing activities including Merrill Lynch. Darnell will run the consumer business including wealth management and home loans.

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An internal IMF document that estimates Europe's banks are short of capital by $273 billion. IMF managing director, Christine Lagarde, tries to downplay the report by saying this is not from a stress test that the IMF conducts. In August, Lagarde, called for an "urgent recapitalization" of European banks. As France's finance minister, Lagarde, steadfastly insisted French banks were well capitalized. France worked hard to prevent requirements for significant capital reserves under the Basel III rules. The higher capital requirements were supported by the U.S.. Simon Johnson said in his blog, that as long as European banks had inadequate capital to act as a buffer against losses, European countries had no safe route for restructuring their debts.

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Thirty billion dollar infusion into First Republic Bank helps stabilize the bank during the crisis created by SVB bank's collapse.

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As the UK's biggest banks are hit hard in the markets, RBS shares down 39%, HBOS down 42%, and Lloyd's down 13%, Barclays down 9%, on Tuesday October 7, 2008, Brown takes a bold step to recapitalize British banks. In recent years as the boom years progressed British banks handled global capital equal or greater than Britain's entire economic output for a year, and making London the global financial hub rivalling New York. Brown offered to buy stakes in British banks for as much as 50 billion pounds or $88 billion.

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The story of Ronald Read of Brattleboro, Vermont, grabbed public attention as a gas station and J.C. Penney employee whose account holdings showed $8 million when he passed away recently. His largest holding - Wells Fargo bank. Investors are attracted to the higher dividends paid by Wells Fargo. With its focus on mortgage lending and less money tied up in trading, Wells Fargo has performed better than its peers. Increased regulatory scrutiny has increased costs for banks with a focus on trading. Bank of America and JP Morgan Chase also paid large fines to regulators. Wells Fargo has no legal settlements with the U.S. Justice Department. As the U.S. economy stages a recovery investors are attracted to Wells Fargo. With a decline in the shares of ICBC, the Industrial and Commercial Bank of China, Wells Fargo now is the largest bank by market value in the world.

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The Trump Accounts for children born 2025-2028 and the Dell $6.5 billion expansion to include earlier born children may be one of the single biggest actions to rebuild the bank accounts of the next generation. It looks at the shrivelled bank accounts of today's older generation with lack of enough savings for a medical crisis and says it has got to be different from now on. The median bank account of Americans over 65 and over is $13400 which means there is little for medical health emergencies and little for needs of older Americans. Median means half have less and half have more than $13400. This is astounding for the wealthiest nation at a time when the total wealth is the highest ever in history. This report by WSJ unfortunately does not mention this at all and dwells on how this is an opportunity for banks and investment companies to get in the door to get your business. DJT as US president with a mandate from lower income Americans has designed this so that it shows the value of careful investments of small seed money. With $1000 to begin with from the government, added amounts from parents and grandparents and invested in a mutual fund that tracks the S&P 500 it will grow with the economy for 18 years, doubling two to three times on the way. It would provide funds for education increasing enrollment in higher education, increase financial literacy by showing how money grows in broad S&P 500 type index funds such as Vanguard type funds. Much of the shriveling of bank accounts for the shocking figure of $13400 median for American 65+ year olds is a result of job losses, high health care costs, wage decline  with factories outshored, hits from 2009 financial crisis caused by bank irresponsible behaviour, drug epidemics and fentanyl allowed to pour into the country, covid pandemic and stock bubbles, decline in higher education enrollment, other. The US president DJT is seeing his mandate as one that reverses these adverse situations one by one to take America back to post war prosperity and rising incomes, rising bank acocunt savings and rising hopes and aspirations for the next generation. ...

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Fed Governor Daniel Rarullo emphasizes the need for transparency and release to the public of stress test information. The goal he says is to release "this kind of standardized comparable information on a regular basis so that it's not a momentous event."

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The bonus issue at RBS bank in the UK, where performance has been abysmal but 1 billion British pounds in bonuses were planned. The public outcry. RBS has been the biggest disaster in British banking or one of the biggest. It has angered Prime Minister Brown for the Government to come up with $20 billion pound injection of capital into RBS recently, yet the current management saw it fit to consider this sizable bonus. Somewhere in all this there is a disconnect between what makes sense and what does not make any sense.

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The U.S. FDIC voted on March 29, 2011, to propose new rules that will require banks to hold at least 5% of the credit risk on securities backed by mortgages. During the mortgage crisis banks were able to sell packages of risky mortgages to investors without having some stake in the loans, leading to speculative behaviours. This proposal was mandated by the Dodd-Frank Act and was voted unanimously at the FDIC. Because the proposal does not apply to securities carrying a government guarantee, which is 90% of the market today, this will not have an immediate impact. Some mortgages are excluded- under one proposal mortgages where a borrower puts a 20% down payment would be excluded, and borrowers would have to meet an income threshold, and be current on all loans. The proposal is a joint effort of the FDIC, and the Securities and Exchange Commission. The idea is to have securitization to occur in an environment where the issuers of securities backed by mortgages have some skin in the game. Securities experts commented favorably on the rule and the proposals. The presence of such a rule would clearly have changed the behaviour of mortgage securities issuers in the U.S. 2008 subprime financial crisis....

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US president Biden calls presidential immunity ruling of the US Supreme Court "extreme and dangerous." He calls for a 18 year term limit for Supreme Court Justices and a code of conduct. Biden proposes a constitutional amendment to put this into effect and Kamala Harris backs Biden's Supreme Court reform.

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About 700,00 depositors in Spain's banks, including Bankia and regional banks, converted their deposits, including life savings, into high yielding preferred shares in the last decade. The banks raised about 22 billion euros to help recapitalize. The sharp decline in value of the shares made it impossible for depositors to resell them. After the eurozone crisis with EU aid to Spain to recapitalize banks, the EU stated the depositors would have to take some losses. Now the two main parties, the Socialists and the Partido Popular are passing legislation to compensate the depositors after angry protests throughout Spain. Banks will use part of the 37 billion euros of loans from the EU to settle the arbitration cases.