US stocks shrugged off the economy and Brent crude hit $101 a barrel again. The S&P 500 rose 0.62 per cent to 1,374.02, led by energy stocks — and posting its best three-day stretch since December (Reuters).
Bob Diamond stepped down as CEO of Barclays over the fallout from the Libor scandal and will appear before the Treasury Select Committee on Wednesday. (Financial Times)
Robert Peston of the BBC reported that Bank of England governer Mervyn King and FSA chair Lord Turner told Barclays chairman Marcus Agius via telephone Monday night they wanted Diamond to resign. (BBC, confirmed by the FT, see also FT Alphaville)
Politicians were none too sad about Diamond’s resignation, hoping it will be the first step towards ““a new culture of British banking”. (Financial Times)
But a showdown looms between Diamond and Bank of England Deputy Governor Paul Tucker, the frontrunner to succeed Mervyn King. Diamond’s former management team “recording a conversation apparently showing that Tucker took a sympathetic attitude to the practice of Barclays and other banks submitting false estimates of their financial health when taking part in the London interbank offered rate (Libor) process,” reports the FT. (Financial Times)
Energy regulators are investigating JPMorgan over potential manipulation of power markets. The Federal Energy Regulatory Commission has subpoenaed the bank twice for emails in recent months, probing whether its bidding inflated electricity rates in California and the Midwest (Reuters). The bank has rights to generator output in the regions (Financial Times).
US banks released ‘living wills’ setting out liquidation plans in a crisis. Banks including Citigroup, Goldman Sachs and Barclays detailed how they would sell off parts of their business or put them through bankruptcy, under strategies submitted to the FDIC and the Federal Reserve. Goldman said it would try to sell businesses piecemeal rather than attempting a bank-wide liquidation (Wall Street Journal).
Are you kidding? In London all eyes will be on Bob Diamond’s appearance before the Treasury Select Committee in Parliament. We’ll be covering it in real-time in a special edition of US Markets Live beginning at 2:30pm London time, 9:30am New York time.
Moneyval will release its report on the Vatican Bank’s progress in making its dealings more transparent.
Meanwhile, here in America we’ll be celebrating our victory over tyranny and oppression in the Revolutionary War (possibly better known to my British colleagues as the War of Colonial Secession). Markets are closed.
FURTHER FURTHER READING, DIAMOND/LIBOR EDITION
- Libor, central banks and financial stability (Money Supply)
- Ready, aim, fire (The Epicurean Dealmaker)
- A Libor explainer. (Market Advisors)
- Brilliant Bob Diamond’s luck finally runs out. (Euromoney)
- Diamond faced a rebellion in New York. (NetNet)