Friday, June 13, 2014

This Week in Bank Failures

Under investigation: BNP Paribas executives knew in 2006 that the bank was clearing transactions for Iranian banks in a way that violated U.S. law, according to a report in Le Monde. However, the bank did not correct its internal controls until last month. The bank is suspected of keeping false records of wire transfers to disguise its money-laundering transactions.

Raising capital: Bank of America is selling branches in inland areas of Virginia, six to HomeTrust Bank and six more to First Community Bank.

The Bank of England is expecting to raise interest rates before the year is over. In addition, so that it does not have to raise interest rates just to cut off a real estate bubble, it is gaining new powers to restrict real estate lending. It could, for example, limit the size of a loan in relation to the property being purchased or the borrower’s income. Real estate values in London especially have risen far enough above their post-crash lows that talk of a bubble is hard to avoid.

A CNNMoney poll found that opinions of the auto bailout have not changed much with the passage of time. Just 38 percent of respondents thought that rescuing the Detroit automakers was a good idea.