Since the financial crisis, William C. Dudley, president of the Federal Reserve Bank of New York, has made significant changes to bolster the bank’s supervision efforts. But now, some regulators are blaming him for holding up a proposed rule to make banks safer, Peter Eavis writes in DealBook. Mr. Dudley is said to have privately expressed his concerns to senior Fed officials in Washington about the rule, known as the supplementary leverage ratio, frustrating other regulators who see it as a centerpiece of a financial system overhaul.
Some said Fed officials ultimately decided that Mr. Dudley’s thinking â€" that the rule could inhibit the Fed’s ability to conduct monetary policy â€" was not serious enough to merit significant changes. But others said his concerns played a role in delaying the final version of the rule, which would put a stricter cap on the amount of borrowing that the biggest banks can do. The rule is now expected to come out in April at the earliest.
It was not clear why Mr. Dudley thought a small increase in the leverage ratio might interfere with monetary policy, but bankers have often argued that it could weigh on two types of assets that play a big role in transmitting changes in monetary policy into the wider economy.
THE MYSTERY OF THE DEWEY SECRET SEVEN  | Earlier this month, Cyrus R. Vance Jr., the Manhattan district attorney, unveiled the filing of an indictment against three former top executives and a low-level employee at the once-mighty law firm Dewey & LeBoeuf. What he did not reveal were the names of seven former employees at the law firm who pleaded guilty to taking part in the four-year plan to manipulate the firm’s financial statements, Matthew Goldstein writes in DealBook.
That Mr. Vance had secured the guilty pleas in the first place was unexpected, but even more surprising to some in the legal world was his decision to keep their names under wraps even after the four accused had been arrested and charged. Why, they wondered, were there so many secret pleas in the accounting fraud case?
Some suggest that Mr. Vance may be keeping the identities of the seven secret because some may testify against the defendants at trial. But others contend that he may be trying to keep the pleas under wraps as long as possible to avoid having to reveal whether his office agreed to any sweetheart deals with cooperators who might have avoided prison time, or allowed them to plead to a misdemeanor as opposed to a felony, Mr. Goldstein writes.
FED CUTS BOND BUYING BY $10 BILLION  | The Federal Reserve continued to taper its economic stimulus on Wednesday, announcing it would reduce its monthly purchases of Treasury and mortgage-backed securities by another $10 billion, to $55 billion, Binyamin Appelbaum writes in The New York Times. The Fed also did away with its threshold for raising interest rates, saying it would keep short-term rates near zero “for a considerable time†after the bond buying ends even if the unemployment rate falls below 6.5 percent.
It was a big day for Janet L. Yellen, who held her first news conference as Fed chairwoman. Investors drew the conclusion that the central bank might begin to raise short-term rates well before the end of 2015, even after Ms. Yellen tried to temper that view by saying that the committee planned to raise these rates gradually. She emphasized that the Fed expected to conclude the process with rates still below the historically normal level of 4 percent. For its part, the Federal Open Market Committee said in a statement released after its two-day meeting that the change in forward guidance was not intended to alter the possible timing of the rate increase.
Ms. Yellen’s signal on interest rate increases caused the stock market to slide. The Standard & Poor’s 500-stock index was down 0.61 percent on the day and interest rates spiked, with the yield on the Treasury’s 10-year note jumping to 2.77 percent.
ON THE AGENDA Â |Â Weekly jobless claims are out at 8:30 a.m. Existing home sales for February are released at 10 a.m. Robert S. Kapito, the president of BlackRock, and Rick Rieder, a managing director at the firm, are on CNBC at 12:30 p.m. Frank Keating, president and chief executive of the American Bankers Association, is on Bloomberg TV at 5 p.m. Results from the latest supervisory stress tests conducted in accordance with the Dodd-Frank Act are released at 4 p.m.
HAPPY VERNAL EQUINOX Â |Â It may not feel like it outside, but Thursday is the first day of spring.
JPMORGAN TO SELL COMMODITIES UNIT Â |Â JPMorgan Chase announced on Wednesday that it had agreed to sell its physical commodities trading unit to the Swiss firm Mercuria Energy Group for $3.5 billion in cash. The move was, in many ways, a response to tighter regulatory scrutiny and limits on commodities trading, a business that already had relatively low margins Michael J. de la Merced writes in DealBook. Mercuria, an independent trading house, is not subject to the same capital limits as a regulated bank
One thing the announcement did not address was whether Blythe Masters, the head of JPMorgan’s commodities business and one of the most prominent women on Wall Street, would depart with her team. Despite her status, Ms. Masters came under scrutiny last year when the Federal Energy Regulatory Commission accused JPMorgan of manipulating California’s energy markets.
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MARCH MADNESS BEGINS TODAY  | The billionaire Warren E. Buffett is insuring a $1 billion prize for anyone who picks a perfect N.C.A.A. men’s basketball tournament bracket (don’t forget to fill out yours), and though the odds suggest it is nearly impossible, even President Obama could not resist a bit of speculation.
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JPMorgan Commodities Sale Shows Trading’s Opacity  | The lack of financial details makes the price hard to judge, but at $3.5 billion, Mercuria seems to be paying a high one, Kevin Allison and Antony Currie write for Reuters Breakingviews. With commodities under pressure, that’s a bold move. DealBook »
What Is Mercuria?  | The privately held trading house Mercuria Energy Group, founded by two former oil traders, was already one of the four leading independent commodity traders in the world. And that was before its $3.5 billion purchase of JPMorgan Chase’s physical commodities arm on Wednesday. DealBook »
Spanish Publisher to Sell Units to Penguin Random House  | Promotora de Informaciones of Spain has agreed to sell the fiction and nonfiction arms of its publishing house Santillana to New York’s Penguin Random House, The Wall Street Journal reports. Prisa said that Penguin Random House agreed to pay $100.3 million for the eight publishing imprints. WALL STREET JOURNAL
Horizon Pharma to Buy Vidara in $660 Million Deal  | The specialty pharmaceutical company Horizon Pharma agreed to purchase Vidara Therapeutics, which is held privately, in a cash-and-stock deal valued at $660 million, The Wall Street Journal writes. WALL STREET JOURNAL
Traders of Tips Meet at Grand Central, and Eat the Evidence  | The government’s case against two Wall Street insiders laid bare an elaborate if somewhat old-fashioned plan, where a middleman would relay tips, written on a Post-it note or napkin, at Grand Central Terminal’s four-faced clock. DealBook »
Former Goldman Chief Walks Among Warriors and Dragons  | Stephen Friedman, the onetime head of Goldman Sachs, appears in humble garb during a cameo appearance in the upcoming season of the HBO series “Game of Thrones.†DealBook »
Questions Over Goldman Deal as Investors Sit in the Dark  | In a fight over a hotel company that went “dark,†investors have accused Goldman Sachs of having conflicting interests, Jesse Eisinger writes in The Trade column. The Trade »
Goldman ‘Elevator’ Book Gets a Different Publisher  | Grove Atlantic, an independent publishing house, said on Wednesday that it had acquired the book based on the Twitter account @GSElevator, The New York Times reports. NEW YORK TIMES
Deutsche Bank to Cut 500 More Jobs  | Deutsche Bank is preparing to eliminate 500 more jobs in its investment banking division in London and Europe, The Financial Times reports. FINANCIAL TIMES
Apax to Create $500 Million Israel Fund  | The private equity firm Apax Partners said on Wednesday that it would create a $500 million mid-market fund to invest in Israeli companies in the technology, telecommunications, health care and consumer sectors, Reuters writes. REUTERS
TreeHouse Foods Weighs Bid for Michael Foods  | The food manufacturer TreeHouse Foods is considering a bid for the Michael Foods Group, which is owned by Goldman Sachs’s private equity unit, Reuters reports, citing unidentified people familiar with the situation. A deal could be valued at up to $2.5 billion. REUTERS
Owner of Canada’s Telesat Said to Be Preparing Sale  | Loral Space & Communications, which owns a majority stake in the Canadian satellite communications company Telesat Holdings, has chosen the private equity firm Apax Partners and two Canadian pension funds to negotiate a sale of the company, Reuters writes, citing unidentified people familiar with the situation. REUTERS
Icahn Calls on eBay to Sell 20% of PayPal Unit to the Public  | Carl C. Icahn’s proposal, a retreat from his previous demand that the payment processor PayPal be spun out completely from eBay, still calls for a separation of the two businesses. DealBook »
SAC Capital Hires Palantir to Monitor Employees  | Steven A. Cohen, founder of the hedge fund SAC Capital Advisors, has tapped the data analytics firm Palantir to track his employees, Reuters reports. The move comes just months after SAC pleaded guilty to insider trading charges. REUTERS
Dow Chemical Increases Asset Sale Target  | Dow Chemical, which is under pressure from the hedge fund manager Daniel S. Loeb to spin off its petrochemical unit, said it aimed to raise up to $6 billion from asset sales, $1.5 billion to $2 billion more than it had said previously, Reuters reports. REUTERS
Banks Compete for $4 Billion Saudi I.P.O. Â |Â JPMorgan Chase and the British bank HSBC are said to be planning to bid for a role in the largest Saudi Arabian share sale in at least 12 years, Bloomberg News writes, citing unidentified people familiar with the situation. BLOOMBERG NEWS
Alder Biopharmaceuticals Files for I.P.O. Â |Â Alder Biopharmaceuticals has filed for an initial public offering of up to $115 million as it seeks to commercialize therapeutic antibodies, The Wall Street Journal reports. WALL STREET JOURNAL
Japan Display Slides 15% in Market Debut  | A high-stakes bid by Japan to breathe life back into its electronics sector got a tepid response from investors on Wednesday. DealBook »
Alibaba Leads $280 Million Funding Round for Tango  | The mobile-messaging app maker Tango announced on Wednesday that it had raised $280 million in a new funding round led by the Chinese Internet giant Alibaba Group, Reuters writes. The deal highlights the growing competition among Internet companies for mobile communications. REUTERS
Former British Bankers Try Their Hand at Start-Ups  | As many of the banks in London have shrunk in the wake of the financial crisis, former investment bankers and information technology specialists have turned to start-ups in Britain’s expanding tech community, Mark Scott writes in Bits. DealBook »
After Derivatives, a Bet on Crispy Seaweed  | Robert Mock, who once sold financial derivatives at Bank of America Merrill Lynch, has found new success making seaweed chips. The venture has attracted backers including Jerry Yang, a co-founder of Yahoo. DealBook »
In Hong Kong, Betting Big on Bitcoin  | A growing field of technology experts, financial players and entrepreneurs believe that mainland China’s unfavorable regulation of Bitcoin has created an opening for Hong Kong. DealBook » |Â
Technology Crossover Ventures Raises $2.23 Billion Fund  | The late-stage venture capital firm Technology Crossover Ventures said on Wednesday that it had raised a $2.23 billion fund, Reuters writes. The fund is the firm’s eighth and is one of the largest venture funds raised in recent years. REUTERS
News Release Distributor to Stop Selling to High-Speed Traders  | The move by Marketwired is another victory in the effort by the New York State attorney general to curb the advantages enjoyed by the fastest traders on Wall Street. DealBook »
Judge Sides with F.T.C. in Payday Lending Case  | A federal judge has reinforced the Federal Trade Commission’s authority to go after payday lenders that claim their ties to Native American tribes make them immune to laws restricting high-cost loans. DealBook »
Toyota Settlement Blazes Path for G.M.  | The parallels between the handling of vehicle defects by Toyota and General Motors are striking, Peter J. Henning writes in the White Collar Watch column, and Toyota’s $1.2 billion settlement establishes a template for G.M. to potentially resolve its own issues. DealBook »
I.M.F. Chief Testifies Again About Role in Payout  | Christine Lagarde, the International Monetary Fund chief, is appearing before a court to explain her role in a proceeding that led to a payment of over 400 million euros, The New York Times reports. NEW YORK TIMES
French Court Upholds Prison Term for Rogue Société Générale Trader  | Though France’s highest court upheld his three-year prison term for fraud, Jérôme Kerviel said he was nonetheless delighted that the court had thrown out an order that he pay a record 4.9 billion euros to the bank, The New York Times writes. NEW YORK TIMES
S.E.C. Investigating Gambling Website’s Bitcoin-Denominated Stock  | The Securities and Exchange Commission is conducting a formal inquiry into the online gambling website SatoshiDice, which listed Bitcoin-denominated shares on MPEx, an online exchange for the virtual currency, Bloomberg News writes. BLOOMBERG NEWS
