Visit our Filed page for categories. To browse by specific topic, see our Inside page. For a list of companies covered on this site, visit our Companies page.
By Becky Yerak
| Midwest Bank, a $3 billion-asset lender on the verge of being seized by U.S. banking regulators, acknowledged in a Securities and Exchange Commission filing on Thursday that it’s unlikely to raise the capital it needs to stay afloat.
As recently as a week ago, Melrose Park-based Midwest Banc Holdings had a glimmer of hope that it still might be able to raise the money to meet the demands of a “prompt corrective action” order filed earlier this year by banking regulators.
Dow Jones Newswires | Harris Financial Corp. has opened a private-banking office in Rockford. The move follows Harris’s acquisition last month of the deposits and some of the liabilities of Amcore Bank after regulators closed Amcore, which had been based in Rockford.
Kathy Weber, formerly head of Amcore’s private-banking business, will lead a team of portfolio managers, trust administrators, private bankers and wealth advisers as head of Harris Private Bank-Rockford.
Associated Press | The New York attorney general has launched an investigation into eight
banks to determine whether they misled ratings agencies about mortgage
securities, according to a person familiar with the investigation.
Attorney General Andrew Cuomo is trying to figure out if banks provided
the agencies with false information in order to get better ratings on
the risky securities, said the person, who spoke on condition of
anonymity because the investigation has not been made public.
Cuomo’s office is investigating Goldman Sachs Group Inc., Morgan
Stanley, UBS AG, Citigroup Inc., Credit Suisse, Deutsche Bank, Credit
Agricole and Merrill Lynch, which is now part of Bank of America Corp.
By Becky Yerak | ShoreBank, the ailing South Side bank, continues to try to raise more than $120 million in capital on its own from new and existing investors, sources familiar with the situation said.
Regulators recently began looking for a healthy buyer for the undercapitalized Chicago-based lender, but it’s racing against the clock to try to raise money to remain independent.
Goldman Sachs, U.S. Bank, Citibank and State Farm are among the new investors that have made tentative commitments.
McClatchy/Tribune News | President Barack Obama on Wednesday
warned that exempting auto dealers from a new consumer protection agency
would hurt buyers and let dealers continue “deceptive practices.”
The nation’s 20,000 new-car dealers have blitzed Capitol Hill the last
two weeks, seeking to be cut free from the agency that would oversee
consumer lending, part of a package of financial reforms expected to
move through the Senate in the next several days. They’re backing an
amendment by Sen. Sam Brownback (R-Kan), that would exempt auto dealers’
lending from new oversight that would still apply to banks and finance
companies such as Ally Bank, the former GMAC.
Associated Press | Taking aim at deceptive lending, the Senate
on Wednesday voted to ban mortgage brokers and loan officers from
getting greater pay for offering higher interest rates on loans, and to
require that borrowers prove they can repay their loans.
The Senate, however, rejected a measure that would have required
homebuyers to make a minimum downpayment of 5 percent on their loans.
The votes were part of the Senate’s deliberations on a broad overhaul
of financial regulations designed to avoid a repeat of the crisis that
struck Wall Street in 2008.
Bloomberg via San Francisco Chronicle | Bway Holding Co., the paint-container and aerosol-can maker being acquired by Chicago-based Madison Dearborn Partners LLC, is marketing debt as high-risk, high-yield debt prices rebound after plunging last week.
Get the full story: sfgate.com.
Associated Press | Consumer borrowing posted an unexpected
increase in March, only the second gain in the last 14 months. It could
be a sign that households are feeling more confident about boosting
spending, a key development needed to support a sustained economic
recovery.
The Federal Reserve reported Friday that consumer borrowing rose by
$1.95 billion in March, better than the $3.85 billion drop that
economists had expected.
Associated Press | Goldman Sachs’ Chairman and CEO Lloyd Blankfein told shareholders Friday the investment bank is creating a business standards committee to study its practices as it fights civil fraud charges brought by the Securities and Exchange Commission. “We need a rigorous self-examination,” Blankfein told investors at the company’s annual meeting. “Our firm must review our core principles.”
He noted there is a disconnect between how Goldman Sachs views itself and how outsiders see the company.
Get the full story: Goldman Sachs says it will review ‘core principles.’
Associated Press | Greek police fired tear gas to repel
stone-throwing protesters after lawmakers approved drastic austerity
cuts Thursday needed to secure international rescue loans worth $140
billion.
The rescue loans are aimed at containing the debt crisis and keeping
Greece’s troubles from spreading to other countries with vulnerable
state finances such as Portugal and Spain. The money will come from the
International Monetary Fund and the 15 other governments whose
countries use the euro.
Clashes in Athens broke out at the end of the main protest that drew
tens of thousands of people as police pushed back a few thousand
demonstrators outside parliament.
Associated Press | Regulators must do all they can to help banks make loans to credit-worthy borrowers, especially small businesses, a development that’s critical to strengthening the economic recovery, Federal Reserve Chairman Ben Bernanke said Thursday. It’s a delicate dance for the Fed and other banking regulators. As regulators encourage banks to make loans to sound borrowers, they are also working to make sure banks get back on firmer footing after suffering through the worst financial and economic crises since the 1930s.
Get the full story: Bernanke says banks should loan to the credit-worthy.
By Becky Yerak | Midwest
Bank, a $3 billion-asset lender in danger of being seized soon by the
government, has mounted a long-shot effort to remain independent by
filing an application for “open-bank assistance” with U.S. banking
regulators, people familiar with the situation say.
Open-bank assistance hasn’t been used on a widespread basis since the
late 1980s by the Federal Deposit Insurance Corp., which in recent years
has built a large infrastructure to put banks into receiverships and
sell their assets to healthy banks. A major criticism of open-bank
assistance generally is that it benefits shareholders of failing banks.
Former executives James Cayne and Alan Schwartz testify before Congress Wednesday on the reasons Bear Stearns failed. (AP)
By Jim Puzzanghera
| Former executives of Bear Stearns Cos. on Wednesday defended the
investment bank’s practices and said the firm’s collapse was caused by
an unstoppable run fed by rumors as the financial markets began
spiraling downward in 2008.
But under questioning by the federal commission investigating the causes
of the financial crisis, former Chief Executive James Cayne admitted
that the company had taken on too much risk to handle a severe market
disruption it did not see coming.
By Becky Yerak | The Federal Deposit Insurance Corp. began seeking potential bidders late last week for ShoreBank, in case the ailing South Side lender is unable to raise capital on its own, according to sources familiar with the FDIC process.
The FDIC also is seeking a healthy bidder for the assets and deposits of troubled Midwest Bank, a midsized lender based in Melrose Park. It is allowing potential bidders for that more desirable franchise to link bids to ShoreBank, which has lent heavily in more hard-hit areas, sources say.
By Becky Yerak | A
consent order with U.S. and Illinois banking regulators requires Valley
Community Bank of St. Charles to raise capital, restrict dividends and
bolster its reserves for loan losses by at least $480,000.
