Bank of America might be on the chopping block, at the very least it may be cut up into tiny pieces. A group of consumer advocates, academics and economists, led by consumer advocacy organization Public Citizen, plan to file a petition with the federal government and other regulators today. It will likely have minimal practical impact but is a dramatic criticism of regulators’ failure to act.
Citigroup may cut more jobs this year at its securities and banking arm. This includes investment banking. The firm invested almost $1 billion in its investment bank last year, but last week reported a 29% drop in the parent unit. Citi has already announced cuts of 5,000 jobs across the entire company.
Flagstar Bancorp drops over 20% premarket. This after the bank holding company showed a wide loss in the fourth quarter, which was more than analysts expected.
Morgan Stanley and Goldman Sachs have been downgraded by JPMorgan Chase & Co . Dropping it from Neutral to Overweight, analysts with JPM cite potential new calculations for capital risk from new methodologies emanating from the Dodd-Frank Act as an overhang on shares.
Piper Jaffray trades lower after a loss in the fourth quarter. A large impairment charge and continued weak demand for capital markets services could be to blame. Assets under management came in flat year-over-year and up 8.9% quarter-over-quarter largely due to equity market appreciation.
Morgan Stanley CEO James Gorman tells CNBC in a video that his company is well equipped to meet Basel III capital requirements. Also, he states that there is no need to raise additional funds in the near-term, and reiterates Morgan Stanley’s commitment to buying a 14% stake in Morgan Stanley Smith Barney from Citigroup . The purchase takes priority over dividends and buybacks.