Daily Libor: Royal Bank of Scotland chief executive officer Stephen Hester told The Guardian that ”RBS is one of the banks tied up in Libor. We’ll have our day in that particular spotlight as well.” At least two banks have joined Deutsche Bank in cooperating with European investigations into the rigging of Libor and other interbank-lending rates, under the condition that the banks would receive lighter penalties if found guilty of participating in the rate-rigging scheme, sources told Reuters. New York-based Berkshire Bank filed a proposed class-action suit in U.S. District Court last week targeting the 16 banks that set Libor. The British government spelled out plans to review the process for setting Libor, with recommendations expected by the end of September.
Muni-rigging trial: Three former UBS employees go on trial today on charges they fixed bids on municipal bond investment contracts. Three employees of GE Capital were convicted on similar charges in May, though those defendants have asked the trial judge to toss out that verdict; banks have paid more than $700 million to settle charges arising from the probe that lands the former UBS bankers in court today.
Rapid rise: Matt Zames, the JPMorgan executive elevated by CEO Jamie Dimon to staunch losses on positions amassed by the trader known as the London Whale, is a “mathematician and a poet,” apparently. The 41-year-old graduate of MIT’s Sloan School of Business took charge of the firm’s chief investment office in May to wind down positions that led the bank to billions in losses. Last week, Mr. Zames was named co-chief operating officer, placing him in charge of more experienced executives such as chief financial officer Doug Braunstein and head of regulatory affairs Barry Zubrow.
Whither Europe: European Central Bank president Mario Draghi has gone on the offensive, first signaling that the ECB would not allow the euro to fail, then working to build consensus for a plan to ease the region’s sovereign debt woes. Count Paul Krugman as among the doubters. CEOs in London for the Summer Olympics are privately voicing concern about the state of the British economy, according to The Financial Times.
Hard to do: Bank of American explored a possible breakup in 2010 and 2011, The Wall Street Journal reports, but decided against splitting off Merrill Lynch or Countrywide units.
Drink up: Funds that invest in tangible assets such as wine, art and classic cars are attracting investors amid fears that the world’s currencies are unstable.
Not so fast: The Securities and Exchange Commission froze the accounts of traders who allegedly made $13 million illegally trading ahead of the Chinese offshore oil explorer Cnooc’s $15 billion acquisition of Calgary-based Nexen last week.
Provisions: HSBC set aside $700 million to cover U.S. regulatory matters after the bank was scolded by Congress for lax anti-money laundering standards and amid ongoing inquiries into Libor-rigging at banks worldwide.