The fallout from the economic collapse has changed the narrative on Wall Street. Chief executives at big banks, who once routinely and openly chastised lawmakers for getting in their way, have become more timid in their dealings with Washington. This is likely due to those fairly large government loans they received a few years back, along with the general intolerance Americans have for whiney CEOs in the wake of the recession.
Regulators and lawmakers found the upper hand, and have been using their newfound leverage to their advantage, forcing Wall Street chiefs like J.P. Morgan’s Jamie Dimon to grit their teeth and smile as they get spun in a web of red tape.
Enough may finally be enough. Banks showed plenty of progress during the first quarter, acing capital buffer tests, cutting pay and trimming risky assets. They must feel emboldened. Big banks are joining hands and going “on the offensive” to fight incoming bipartisan legislation, according to the Wall Street Journal.
In conjunction with the Financial Services Forum, a top trade association, several U.S. banks joined forces to hire a former Bush administration official to fight allegations that they remain too big to fail. Bank of America and Morgan Stanley hired their own big names to try and win the fight in Washington. And last month, chief executives from five of the larger banks shared the same boardroom walls to game plan around building a united front, according to the report.
What they’re gearing up to fight is a new bipartisan bill, the "Terminating Bailouts for Taxpayer Fairness" Act, which would require big banks to hold enormous capital reserves, much bigger than those already agreed upon.
From a distance, the fight seems worth engaging. Strict capital requirements hamstring banks, forcing them to loan less, hire less and pay less. One pundit recently said the bill would “neuter” Wall Street.
The question remains: Are the American people ready to stomach the shrill sounds of Wall Street complaints, no matter how just? Probably not.
Headhunters suggest sovereign wealth funds are recruiting for everything from hedge fund selection to private equity and macro strategists. So what do you need to catch their eye?
Boutique investment advisory firm Peter J. Solomon Co. is hiring. The New York firm employs 75 people, but it has room for 125. Solomon is looking for senior bankers mostly.
Royal Bank of Scotland Chief Financial Officer Bruce Van Saun will become the chief executive of the bank’s U.S. operations in October. He’ll be replaced by current Chief Risk Officer Nathan Bostock.
A key labor market metric – the four-week moving average of jobless claims – fell to pre-recession levels last week.
Hedge fund manager Philip A. Falcone reversed course on Thursday, deciding to settle with federal regulators over fraud charges. Falcone will pay $4 million in penalties – his firm, Harbinger Capital Partners, will pay another $14 million – and he’s agreed to a two-year ban from much of the financial industry.
Anatoly Nakum, former co-head of debt trading for North America at UBS, has joined hedge fund Lucidus Capital Partners as a money manager focusing on corporate debt.
J.P. Morgan traders joined their Bank of America brethren, booking gains every trading day during the first quarter. That’s ridiculously impressive.
Maybe the best argument for keeping J.P. Morgan Chief Executive Jamie Dimon in his role as chairman: “I find it difficult to think of an actual person who could oversee [him].”
Buzz Around the Office
A Bloomberg News editor flew from Washington D.C. to Prague to scream at two editors who posted an article one minute before a news embargo was lifted. He flew immediately home after reprimanding the pair.
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If you’re a millennial, do these things, or else risk remaining unemployed for a long time.