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Aug 26, 2013

Insight: Trades from 1990s come back to haunt Wall Street

By Lauren Tara LaCapra and Dan Wilchins

(Reuters) – In the 1990s, U.S. banks came up with a clever idea: using life insurance to bet that their employees would eventually die. Now those wagers are coming back to haunt Wall Street banks for reasons that have little to do with their employees’ longevity.

For more than a decade, the lenders purchased life insurance policies, known as “bank-owned life insurance,” on employees in bulk. These policies were unusual: banks chose how the premium would be invested; and were on the hook for investment losses or gains over time, unlike typical policies where the insurer invests the premium.

Aug 26, 2013

Trades from 1990s come back to haunt Wall Street

Aug 26 (Reuters) – In the 1990s, U.S. banks came up with a
clever idea: using life insurance to bet that their employees
would eventually die. Now those wagers are coming back to haunt
Wall Street banks for reasons that have little to do with their
employees’ longevity.

For more than a decade, the lenders purchased life insurance
policies, known as “bank-owned life insurance,” on employees in
bulk. These policies were unusual: banks chose how the premium
would be invested; and were on the hook for investment losses or
gains over time, unlike typical policies where the insurer
invests the premium.

Jul 18, 2013

Analysis: Bank of America’s interest-rate exposure may be worse than rivals’

NEW YORK (Reuters) – Bank of America Corp’s (BAC.N: Quote, Profile, Research, Stock Buzz) balance sheet suffered from rising bond yields in the second quarter, suggesting that the second-largest U.S. bank may be more exposed to interest-rate risk than some of its major rivals.

The bank posted a profit for shareholders of $3.57 billion in the second quarter, but on its balance sheet the picture was not as good – its net worth fell by $6.26 billion as a result of investment losses. Rivals JPMorgan Chase & Co (JPM.N: Quote, Profile, Research, Stock Buzz) and Citigroup Inc (C.N: Quote, Profile, Research, Stock Buzz) both managed to increase their net worth as measured by their book value.

Jul 18, 2013

Bank of America’s interest-rate exposure may be worse than rivals’

NEW YORK, July 18 (Reuters) – Bank of America Corp’s
balance sheet suffered from rising bond yields in the second
quarter, suggesting that the second-largest U.S. bank may be
more exposed to interest-rate risk than some of its major
rivals.

The bank posted a profit for shareholders of $3.57 billion
in the second quarter, but on its balance sheet the picture was
not as good – its net worth fell by $6.26 billion as a result of
investment losses. Rivals JPMorgan Chase & Co and
Citigroup Inc both managed to increase their net worth as
measured by their book value.

Jun 18, 2013

Insight: Why Citi wants to rack up U.S. taxes

By Dan Wilchins

(Reuters) – Over the past few years, Citigroup Inc has been grappling with an unusual problem – how to incur more U.S. taxes.

The third-largest U.S. bank tried to buy the foundering Wachovia Corp in the fall of 2008 in part because the deal would have brought it more taxable domestic income, a person familiar with the matter said.

Jun 18, 2013

Why Citi wants to rack up U.S. taxes

June 18 (Reuters) – Over the past few years, Citigroup Inc
has been grappling with an unusual problem – how to incur
more U.S. taxes.

The third-largest U.S. bank tried to buy the foundering
Wachovia Corp in the fall of 2008 in part because the deal would
have brought it more taxable domestic income, a person familiar
with the matter said.

Jun 4, 2013

Insight: Corbat faces ghost of Weill’s deals in Citi’s machines

By Dan Wilchins, David Henry and Nadia Damouni

(Reuters) – When Vikram Pandit was abruptly ousted as Citigroup Inc’s (C.N: Quote, Profile, Research, Stock Buzz) chief executive late last year, senior bank employees speculated for weeks about who would follow him out the door.

Chief Operating Officer John Havens had already left with Pandit, and the employees bet the new CEO, Michael Corbat, would push out other Pandit loyalists. High on their list was Don Callahan, who headed operations and technology.

Jun 4, 2013

Corbat faces ghost of Weill’s deals in Citi’s machines

June 4 (Reuters) – When Vikram Pandit was abruptly ousted as
Citigroup Inc’s chief executive late last year, senior
bank employees speculated for weeks about who would follow him
out the door.

Chief Operating Officer John Havens had already left with
Pandit, and the employees bet the new CEO, Michael Corbat, would
push out other Pandit loyalists. High on their list was Don
Callahan, who headed operations and technology.

May 7, 2013

Column: Five days below the poverty line

By Dan Wilchins

(Reuters) – My wife Becky and I experimented with radically cutting our food costs last week as part of a fundraising campaign created by a hunger charity.

Under the “Live Below The Line” campaign sponsored by the Global Poverty Project, an Australian charity, for five days we spent $1.50 per person per day on food, which is the extreme poverty line globally, according to the World Bank.

May 6, 2013

MBIA, Bank of America reach $1.6 billion settlement

By Karen Freifeld and Dan Wilchins

(Reuters) – Bank of America Corp (BAC.N: Quote, Profile, Research, Stock Buzz) will pay $1.6 billion in cash to MBIA Inc (MBI.N: Quote, Profile, Research, Stock Buzz) and receive the right to buy a 4.9 percent stake in the bond insurer to resolve long-running litigation between the companies, the bank said on Monday.

Bank of America will also remit $137 million worth of MBIA senior debt it acquired in December and provide MBIA with a $500 million credit line as part of the deal.

    • About Dan

      "Dan Wilchins oversees a team of reporters covering U.S. commercial banks, investment banks, and insurance companies. Based in New York, he has also covered securitization, derivative markets, and corporate bonds."
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