Kohn, Bair warn banks about interest rate risk at FDIC symposium (Wutkowski, Reuters) The Fed says rates will stay low for an “extended period.” But that doesn’t mean “forever” so the Fed, along with other bank regulators, have warned bankers to prepare their balance sheets for higher rates. The populist line that banks need to “lend more” to get the economy going is just foolish. Regulators know the score: banks that lend too much at these low rates, or are using too much cheap short-term funding, will be caught out when rates head back up. Text of Kohn’s speech here. PDF of Sheila Bair’s here. (Bair’s speech is shorter and less wonkish)
MS looking into legal action against ZeroHedge (Teri Buhl) Will they actually sue? Probably not. Still, ZH’s emphasis on quantity over quality means they too often lift the work of others. Blogs link to content all the time of course, but proper attribution is important. And ZH most certainly DOES NOT have permission to reprint research coming from Wall St. analysts.
Wall St. tries to put price on Volcker rule (Sanati, Dealbook) Goldman is said to be in the most trouble, since a larger piece of its business is driven by proprietary trading. But can’t they just give up the bank charter they got last year in order to avoid any new Volcker-rule regs?
Simon Johnson joins HuffPo (Felix) As part-time biz editor.
GDP grows 5.7% (Mutikani, Reuters) The guys at Variant Perception have been saying to expect blowout growth this year coming off a low number, but they warn that it’s all dependent on government largess, which is not sustainable. The market knows this. Stocks are flat on this news.
Bank sues victim to avoid replacing stolen funds (Consumerist) Hackers got away with $800,000, but the bank can’t make it all up. So it’s pre-emptively suing the victim…
Are they AIG conspiracy theories really so nutty? (Reilly, Bloomberg) Geithner, Paulson and Bernanke have all said they had nothing to do with the decision to make a full pay out to AIG’s CDS counterparties. So who was in charge??
Bin Laden rebukes U.S. on climate change (Healy, NYT) No, really.
Bunch of phonies mourn JD Salinger (The Onion)