Bank and Investment Bank Credibility!
Why Read: Because current events could be a 'logs that collectively break the camel's back'.
Featured Articles: Two articles today jump up and beg for notice:
the first reports that JPMorgan has been subpoenaed by U.S. energy regulators to produce twenty-five 2010 and 2011 e-mails in conjunction with an investigation into whether it manipulated electricity markets in California and the U.S. Midwest; and,
the second reports that a Spanish national court has ordered Rodrigo Rato, former IMF head and political ally of Spain's Prime Minister, to face criminal fraud accusations over his recent stewardship of Spain's fourth largest bank, Bankia SA. Bankia SA is the Spanish bank that came to the fore on May 9 when it was announced Bankia was estimated to need a 15 billion euro capital infusion. That estimated amount has since grown substantially, and is yet to be finally crystallized.
As said in yesterday's Newsletter:
"while allegations are just that until they are either proved or disproved, whether it is fair or unfair, even allegations can lead to feelings of discomfort and worse on the part of bank customers, retail investors, institutional investors, and others".
If there are enough negative allegations aimed at specific banks and investment banks, whether or not such allegations are ever proved, there has to be spillover resulting in a negative cloud over the entire financial services industry. Important questions from 20,000 feet then have to be:
if any of these allegations are proved, at what point are governments, regulators, financial market participants and the general public individually (and perhaps eventually collectively) likely to say 'enough is enough'?; and,
if indeed one or more of those parties do say 'enough is enough', what will be the consequences to a world economic system that already is rife with very serious problems - where these problems currently seem to be 'headed in the wrong direction'?
Probed Over Possible Power Market Manipulation
Source: CompliancEX, from Reuters, July 5, 2012. READ THIS ARTICLE in 1 minute.