Financial Services Industry Archive

The only real surprise about John Thain’s abrupt departure is the timing.After a late Thursday morning meeting with his new bosses at Bank of America, the former head of Merrill Lynch was apparently persuaded to resign. BofA chief Kenneth Lewis probably should have arranged a better way to handle the matter, but it’s also a good thing that Thain is going. Lewis didn’t have...

More...

One hopeful sign of today’s financial crisis is that new forms of banking are arising after a round of Joseph Schumpeter-style creative destruction. If Citigroup-type supermarket banking, with its many extra costs, seems so yesterday, social lending is working on ways to eliminate the middleman and get decent interest rates to worthy borrowers. So far, social-lending has been pretty much...

More...

For tea-leaf reading on the health of banks, consider depositor behavior. Troubled Citigroup, which is splitting itself into two units, has seen foreign depositors head for the exists. Citi’s fourth quarter deposits of $774 billion were down 6 percent from the year earlier, American Banker reported. Most of the money flight involved depositors in Latin America, Europe, the Middle East and...

More...

With Obama comes new regulation – Barack Obama’s inauguration today ushers in a new era of regulation of everything from drugs to the environment. Leading the list is finance, which could see tighter capital requirements for banks and new ones for hedge funds, oversight of credit default swaps, watchdog agencies overseeing consumer finance products and  regulatory agency...

More...

Throughout all of the miserable year 2008, Kenneth Lewis was like Superman, bounding tall buildings, picking up catastrophic subprime lender Countrywide Financial, speeding faster than a locomotive and then snapping up Wall Street investment giant Merrill Lynch. He got federal bailout money last fall to the tune of $25 billion, but explained to Leslie Stahl on CBS’s “60...

More...

There may be plenty of credit out there, but the traditional lenders such as banks and credit cards companies are certainly making it hard to get it. So, one Massachusetts company is taking lending, literally, back to hearth and home, with the help of maverick venture capitalist Richard Branson. Virgin Money is a small firm that tries to tap an alternative source of lending based on family and...

More...

BofA posts loss, gets aid – Swallowing Merrill Lynch and its $15.31 billion loss for last year’s fourth quarter pushed Bank of America into a loss after BofA paid preferred dividends of $2.39 billion or 48 cents per share. BoA got an additional $20 billion in extra federal bailout money and backstop losses on $118 billion of its assets. [Source: Associated Press] Citi posts loss...

More...

Call it “W’s” last screwup. With only five days left to go in his presidency, George Bush and his advisors are caught in critical mess over what to do with the second tranche of the Troubled Asset Relief Program. Barack Obama and his incoming staff want access to it. Senate Republicans, angry at their GOP kinsmen in the White House, are dragging their feet in releasing it....

More...

OK, fine. Citigroup’s “one-stop shopping” for financial services is being swept into the dust bin of history. The banking giant will downsize by at least one-third. What’s next? That’s a key question as we sit on the cusp of two presidential admininistrations. What we could be seeing is a major change in recovery philosophy between George W. Bush’s people,...

More...

Will Vikram Pandit survive? Citigroup’s CEO has gotten a public boost of confidence from his board, which management guru Jack Black says is typically one step from dismissal.  Troubled Citi should post a $10 billion operating loss. [Source: Market Movers] Citi might get $10 billion from Smith Barney sale – By selling the retail investment arm to Morgan Stanley, Citi might get up...

More...