‘ Members of the House of Transportation Committee Discuss Private Financing for Pubic-Private Partnerships ‘

#AceFinanceNewsUNITED STATES (New York) – When members of the House Transportation Committee trekked this morning to Manhattan for a roundtable discussion on private financing for public projects — also known as public-private partnerships, or P3s — with financiers from J.P Morgan and other firms, they got a message of both opportunity and caution.

“The focus on U.S. infrastructure from participants around the globe has never been at this high a point,” said Jamison Feheley, managing director and head of the public finance team at J.P. Morgan, which recently served as lead banker to the state of Washington on a $1.1 billion toll revenue bond financing program for building a new bridge across Lake Washington to replace an ageing span.

He cited reasons for the interest: “The attractiveness of U.S. assets, the stable political environment, and the long-term nature of the assets, the stable and predictable returns.” He told the panel “the amount of calls we field on a weekly basis from participants around the globe asking ‘how do we invest in U.S. infrastructure?’ – I’ve never seen anything like it.”

A convergence of forces is driving interest in P3s, including low interest rates, pension funds’ searching for predictable returns, and an unwillingness by Congress to increase gasoline taxes to finance infrastructure building. Or as Rep. Michael E. Capuano, D- Mass., put it, “because we in Congress don’t have the courage at the moment to actually do what we have to do on the Highway Trust Fund,” which is facing inadequate revenues from the gas tax ……………

Read More of this well written article from By Tom Curry @ Roll Call the Container

AFN2014

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” JP Morgan Denied `Sberbank and VTB’ the right to make `Transactions’ of Customer Payments”

#AceFinanceNews says according to latest reports in MOSCOW, February 06. /ITAR-TASS/. US regulators’ struggle for a clear banking system caught up with the major Russian market players. According to Kommersant daily, JP Morgan denied Sberbank and VTB the right to make transactions of customer payments since the US bank revised approach transparency of operations.

JP Morgan Meanwhile, JP Morgan is not as suspicious about most of other Russian banks — obviously, according to the law of large numbers, the paper says.

According to the paper’s source, the US partner notified the banks of ceasing their operations with customer payments, though continued its own treasury transactions with Sberbank and VTB.

In effect, the paper says, the banks transferred all customer transactions to Bank of America and Bank of New York (Sberbank) and Citi and Bank of America (VTB). VTB is going to take treasury transactions out of JP Morgan, whereas Sberbank plans to continue such partnership.

Actions of JP Morgan, which is one the banks that leads by the number of the US authorities’ complaints, are comprehensible. Last year alone JP Morgan paid financial regulators about $20 billion for various violations on mortgage-backed securities. This year the bank is to pay another fine of $2.6 billion for failure to notify the authorities of suspicious customer transactions. Under such circumstances, the bank’s selective refusal to cooperate raised eyebrows in the market as procedure remained unchanged for a number of other Russian banks holding correspondent accounts in JP Morgan.

It may be the business scale of the Russian leading banks that caused such a coolness in JP Morgan attitude, the paper says.

Along with the maximal number of customer transactions as compared to other Russian banks, Sberbank and VTB carry out a large number of operations in the interests of smaller banks holding correspondent accounts in these banks and unable to open them in US banks.

 

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Elizabeth Warren: “What She Had to Say About JP Morgan’s CEO Jamie Dimon”

#AceFinanceNews says on Saturday night at 9:00 PM/EST Bloomberg aired an extra special episode of “Political Capital with Al Hunt,” his guest is none other than Senator Elizabeth Warren (D-MA), and she had some fairly blunt things to say about JP Morgan‘s CEO, Jamie Dimon.

English: Wall Street sign on Wall Street

English: Wall Street sign on Wall Street (Photo credit: Wikipedia)

Warren was elected on crusading against Wall Street malfeasance, and JP Morgan is Wall Street’s bad boy right now. The bank has paid $20 billion in legal fees to the government over the last year —that’s enough to pay the New York Yankees for 2o years — and just this week paid out $1.7 billion for failing to alert authorities of  their former client, Bernie Madoff‘s infamous decades long Ponzi scheme.

What’s more, knowing that Madoff was a fraud, JPM got rid of their $275 million exposure to Madoff shortly before he was arrested in December 2008.

When asked whether Jamie Dimon should be replaced as a result of these issues, Warren said: “Look, the real question is, do you have somebody who has shown they understand there were problems in the past and that they have a different plan going forward? What JPMorgan Chase and the other large financial institutions have done is they have continued to get bigger and bigger and load up more and more on risk…I’m waiting for him to demonstrate that understanding… And he’s had a long, long time.”

One thing Dimon can understand, however, is the health of his bank. JPM’s shares are up 28 percent over the last 12 months, and analysts expect the bank to have pulled in $23.4 billion in revenues when it reports Q4 earnings next week — a small improvement from Q3, and more than any other big bank.

Official portrait of United States Senator (R-OK).

Official portrait of United States Senator (R-OK). (Photo credit: Wikipedia)

So JPM can handle the lawsuits in stride, but Warren cannot. Just this week, after JP Morgan’s settlement, she teamed up with Senator Tom Coburn (R-OK) to introduce a new bill called the Truth In Settlements Act.

Basically, it would require the Justice Department and other agencies handling settlements against corporations to be transparent about their negotiations, and make agreements easy to find online (you can watch a video of her speech on the floor of the house below).

Under this new law, regulators and law enforcement agencies would still be able to use confidential settlements, but companies would have to disclose how often they are used and why.

Now, since the Justice Department has said that it’s going to continue going after not just JP Morgan, but also other Wall Street banks for issues dating back to the financial crisis, it’s easy to see where Warren’s coming from with this bill. The New York Times reported this week that Wall Street banks could pay up to $50 billion to “buy peace” with the government.

“When you dig below the surface, settlements that seem tough and fair can look like sweetheart deals,” said Warren. “If we expect government agencies to hold companies accountable for breaking the law. Then we the public must be able to keep agencies accountable for enforcing the law. We can’t do that if we’re kept in the dark.”

 

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Who will Receive What, When JP Morgan’s Fine of $13 Billion is Finally Settled

Dismissed U.S. attorneys summary

Dismissed U.S. attorneys summary (Photo credit: Wikipedia)

 

Because the deal was still in the works, the details of JP Morgan‘s record $13 billion fine to settle civil violations related to mortgage-backed securities it sold before the housing crisis have been murky.

 

But now the WSJ has the break down.

 

For the record, the Justice Department has decided not to make JP Morgan pay punitive damages for mortgages sold by Bear Stearns and Washington Mutual, since JPM essentially helped the government out by buying the banks as they were collapsing.

 

So that’s nice, but the figure will still stay at $13 billion.

 

Now for the numbers:

 

  • $4 billion will go to Fannie Mae and Freddie Mac
  • $4 billion will go to underwater homeowners
  • $3 billion will go to institutional investors that lost money on bad mortgage-backed securities
  • and $2 billion will serve as a penalty for JPM’s conduct in the lead up to the financial crisis

 

According to the WSJ, all the drama surrounding this deal started on September 24th, the day the DOJ set a deadline to file a civil suit against the bank over MBS. The day before, JPM called and offered $3 billion, which the DOJ refused.

 

The JPM called back and said they’d negotiate a higher figure if they didn’t have to go to Court.

 

That brings us to now. After the government shut down ended, lawyers at the DOJ told JP Morgan they had six days to cobble an agreement together. What that means is that we could have a finalized agreement by this week.

 

For the full story, head to the WSJ>

 

 

 

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