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from Breakingviews:

BofA loss provides valuable mega-bank perspective

By Antony Currie

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Anemic results underscore how little fun it is to run a mega-bank these days. A $276 million loss from Bank of America announced on Wednesday, however, at least provides some valuable perspective.

The bank led by Brian Moynihan was already expected to report a pretty low number because of its earlier flagged $3.6 billion mortgage settlement with Fannie Mae and Freddie Mac’s regulator. What socked shareholders in the gut, though, was a surprise $2.4 billion addition to reserves. BofA took the step after deciding the amount it may have to pay out on lawsuits and other mortgage issues went up in the first three months of the year.

Penalty inflation has become a growing concern. Even so, much of the worst news at rival banks, not least JPMorgan’s $13 billion settlement, came out before the end of 2013. That suggests BofA has been tardy in reevaluating its own exposures.

from Breakingviews:

Credit Suisse still firing on one cylinder

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By Dominic Elliott

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Credit Suisse is firing on one cylinder. The Swiss lender’s reshaped private banking arm is pulling in more money. But an 11 percent year-on-year dip in quarterly investment banking revenue shows its other main unit is still sputtering.

from Breakingviews:

From Ally to Zoe’s, IPOs hint at back to basics

By Robert Cyran

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

From Ally Financial to Zoe’s Kitchen, initial public offerings may be getting back to basics. Investors had an appetite for almost any new issue until last week. Six of 10 offerings couldn’t fetch the desired price and six were yanked as fear again mingled with greed. A fresh crop of eager sellers, including Moelis and Weibo, may encounter a more rational market than expected.

from Breakingviews:

Europe’s banks lose their cover on leverage ratio

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By Dominic Elliott

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Europe’s banks have lost their cover on the leverage ratio. European lenders used to contend that American rivals had an easier ride on newly vogue-ish equity-to-asset yardsticks. New rules published on April 8 mean they can carp no longer.

from Breakingviews:

Jamie Dimon hits final stage of grief: acceptance

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By Rob Cox
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

In coping with the tragedy of the financial crisis, no Wall Street executive has exhibited the five stages of grief like Jamie Dimon. The JPMorgan chief executive has passed through phases of denial, anger, bargaining and depression. His latest annual letter to shareholders finally shows a desire to accept what’s happened and move on.

from Breakingviews:

Banks swap rewards for risk on public deals

By Dominic Elliott

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Investment bankers are wising up about reputational risk. Deutsche Bank and UBS are now loath to offer long-dated swaps to municipalities. New capital rules making it less attractive to enter into long-dated interest rate swaps partly explain why. But the legal tussles and bad publicity from dealing with public sector clients are a bigger factor.

from Breakingviews:

Euro crisis 2.0 will need a new shock absorber

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By Neil Unmack and George Hay

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

Future euro zone crises will need a different shock absorber. European banks kept yields down during 2010-13 by buying sovereign debt. New capital rules make this an altogether dicier affair.

from Alison Frankel:

Can banks force clients to litigate, not arbitrate?

If you are a customer of a big bank -- let's say a merchant unhappy about the fees you're being charged to process credit card transactions -- good luck trying to bring claims in federal court when you're subject to an arbitration provision. As you probably recall, in last term's opinion in American Express v. Italian Colors, the U.S. Supreme Court continued its genuflection at the altar of the Federal Arbitration Act, holding definitively that if you've signed an agreement requiring you to arbitrate your claims, you're stuck with it even if you can't afford to vindicate your statutory rights via individual arbitration.

But what if you're a bank customer who wants to go to arbitration -- and, in a weird role-reversal, the bank is insisting that you must instead bring a federal district court suit? Will courts show the same deference to arbitration when a plaintiff, rather than a defendant, is invoking the right to arbitrate and not litigate?

from Breakingviews:

Blythe Masters could chair Glencore

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By Christopher Hughes
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Blythe Masters’ exit from JPMorgan with the sale of its physical commodities business could solve Glencore’s longstanding search for a chairman. The brains behind the credit default swap has the expertise to join the trading house’s board, whose all-male roll makes it an anachronism in the FTSE-100. But there is one big obstacle to her leading this or any board – she has never run a company before.

from Breakingviews:

Virtu IPO blocked by high-frequency trading cloud

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By Richard Beales
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

It’s a good thing Virtu Financial doesn’t really need to go public. The “technology-enabled market maker” is delaying its initial public offering, according to news reports. While Virtu may be different, too much of what it does sounds similar to the high-frequency trading that’s suddenly in the spotlight.

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