Daily Archives: March 6, 2013

Link

U.K. Regulator Admits Missing Signs of Libor Manipulation

U.K. Regulator Admits Missing Signs of Libor Manipulation

A U.K. financial regulator says it could have responded better to evidence that banks had manipulated the London interbank offered rate.

The Financial Services Authority’s focus on the financial crisis and that fact that setting Libor was not a regulated activity led the FSA to be “too narrowly focused” in its handling of Libor-related information, according to a 120-page report the regulator published on Tuesday.

The FSA should have “considered the possibility and likelihood” that some of the world’s biggest banks that submit rates that determine Libor understated what it would cost them to borrow unsecured funds because they sought to avoid the news media’s measuring the banks’ financial health by their borrowing costs.

The report found 74 communications from banks to the FSA over a two-month period starting in April 2008 that questioned whether banks might have made misleading Libor submissions to avoid negative media coverage, a practice known as lowballing. Twenty-six of the communications directly mentioned lowballing, the FSA found.

Link

Wells Fargo CFO to Consider Mortgage Servicing Rights Market

Wells Fargo CFO to Consider Mortgage Servicing Rights Market

The U.S. fourth-largest bank Wells Fargo & Co. may consider selling mortgage servicing rights without facing any pressure on capital, bank’s chief financial officer Tim Sloan said in a statement during an investor conference.

The bank has been delighted to know about the developing market for the buying and selling of collection rights for mortgage loans, Sloan stated. These assets have been sold by a number of large banks because of the fact that they are receiving treatment under new international rules for capital.