Archive for November, 2009
According to a new report from the FDIC, Bank of America (NYSE: BAC), JP Morgan Chase (NYSE: JPM), Citibank (NYSE: C), Wells Fargo (NYSE: WFC) have decreased their lending during the 3rd quarter by over $157 billion.
Although the federal government has loaned major banks hundreds of billions of dollars, the nation’s largest banks, continue to be very reserved about the loans that they are willing to issue.
According to FDIC Chairman, Sheila Bair, lending from banks dropped by 3% during the third quarter of 2009, which marked the steepest drop since the Federal Deposit Insurance Corporation began measuring such data in 1984. Bair also stated that large banks, such as Bank of America, Citibank, JP Morgan Chase, Wells Fargo and others were responsible for 75% of that decline.
A secondary reason causing a shortage of loans is the collapse of many smaller banks. The FDIC has had to rescue 124 failed financial institutions this year and many experts believe that hundreds of more banks will fail in the next several months. At the end of September, there were 552 banks (or about 7% of all banks) were on the FDIC’s problem list.
The bank failures that have happened to date have placed a significant strain on the FDIC’s waning resources, causing the agency to post its first negative balance for its insurance fund since 1992, when regulators were rescuing banks that had failed during the savings and loan crisis.
Lenders Less Willing to Push Mortgage Rates Lower
Posted by: | CommentsPosted To: Mortgage Rate Watch
I hope everyone had a fantastic holiday weekend…now it’s back to work. Last week ended on a flat note with mortgage backed securities closing basically where they opened Friday morning. Bolume was extremely light but that was expected as the markets were only open for a half day. The data calendar is very light today with the only report being the Chicago PMI which is a survey of businesses conditions around the Chicago region. Readings above 50 indicate expansion while readings below 50 indicate contraction. Last month’s survey registered the first above 50 reading since the summer of 2008 with a reading of 54.2. Expectations called for this month’s report to come in slightly lower at 53.0. The release indicated that business conditions around the Chicagoland area continue…(read more)
The State Street Corporation (NYSE: STT) announced Monday it has agreed to a deal with Morgan Stanley (NYSE: MS) to provide them investment management operations services for about $300 billion in assets under management.
As part of the terms, State Street will assume approximately 100 employees worldwide from Morgan Stanley’s Investment Management unit. According to the company, the majority of the workers to be inherited are based in the U.S., but there are some located in foreign countries.
Overall, the deal calls for State Street to work with the Morgan Stanley Investment Management unit and provide global outsourcing services, such as portfolio administration and reporting and reconciliation services for the majority of assets held under management by the investment management group.
The Morgan Stanley Investment Management unit has roughly $386 billion in assets under management, with nearly 1,000 investment professionals located around the world.
“State Street is a recognized global leader in investment operations outsourcing and we are confident that our organization and our clients will benefit from its leading technology systems, depth of resources and commitment to excellence in customer service.” said Joanne Pace, chief operating officer of Morgan Stanley Investment Management, in a press release.
The deal is just another in a longstanding relationship between the two firms that dates back roughly 40 years.
“As one of the first providers to offer investment operations outsourcing services, State Street has a decade of experience in servicing some of the most complex and global books of business and we look forward to building on this success,” said Jay Hooley, president and chief operating officer of State Street Corporation.
State Street provides services for more than $6 trillion in middle office assets to clients globally and its investment manager operations outsourcing solution covers all aspects of the trading cycle.