Pressure to Finish Volcker Rule Quickly

The Obama administration has reached a critical stage in its effort to rein in Wall Street, Peter Eavis and Ben Protess report in DealBook. The push to reshape financial regulation hinges on negotiations in the coming weeks over the Volcker Rule, which bans banks from trading for their own gain.

“Treasury Secretary Jacob J. Lew has strongly urged federal agencies to finish writing the Volcker Rule by the end of the year — more than a year after they had been expected to do so — and President Obama recently stressed the importance of the deadline,” Mr. Eavis and Mr. Protess write. “While regulators are optimistic they will complete the rule soon, even after facing a lobbying onslaught from Wall Street, they have little time to overcome the internal wrangling that has stymied them for years. The tension among regulators — five agencies are writing the rule — has centered on just how stringent to make it.”

“The tenor of the negotiations underscores how the Volcker Rule has emerged as a litmus test of the strength of Dodd-Frank, especially after regulators weakened other rules under that 2010 law. And although the Volcker Rule is only one of 400 regulations to arise from the sweeping overhaul, its symbolic significance has captivated Washington and Wall Street alike.”

GEITHNER HEADS TO PRIVATE EQUITY  |  In his first prominent position since leaving office as Treasury secretary this year, Timothy F. Geithner will join Warburg Pincus as president, the private equity firm announced on Saturday. “The unusually low-key announcement — made with little fanfare on a Saturday morning — is Mr. Geithner’s first foray into the private sector in 25 years, after serving in the Treasury Department, the International Monetary Fund and the Federal Reserve Bank of New York,” Michael J. de la Merced and Peter Lattman write in DealBook.

“While Mr. Geithner has been given the lofty title of president, several private equity executives questioned whether he would be much more than a prominent name who would help Warburg Pincus open doors on the fund-raising side, especially with foreign investors like sovereign wealth funds,” Mr. de la Merced and Mr. Lattman write. “Unlike past Treasury Secretaries Henry M. Paulson Jr. and Mr. Rubin (both alumni of Goldman Sachs), Mr. Geithner has been a public servant for most of his career. He has never worked at a bank, and he has no experience making private equity deals.

“Mr. Geithner initially seemed unlikely to join Wall Street. While he was praised for helping prevent the financial crisis from worsening, critics repeatedly assailed his policies during the Obama administration as too friendly to the nation’s biggest banks.”

FACEBOOK STRIVES TO KEEP CACHET  |  Facebook, still the dominant social media service, has been an attractive suitor for many start-ups. But when Snapchat spurned an offer from the social media giant, the snub underscored a changing perception of Facebook in the tech industry, Jenna Wortham, Vindu Goel and Nicole Perlroth report in The New York Times. “As the once scrappy start-up evolves into a sprawling corporation, younger companies who view themselves as disruptive do not find Facebook’s size and cushy campus as appealing.”

Snapchat most likely envisions a future for itself as a social network that could exist outside of Facebook. Its swift rise suggests a change in how and where people like to spend their time. Despite Facebook’s primacy, a study by the Pew Internet and American Life Project found that Facebook addiction has given way to Facebook fatigue, at least among some users. The survey confirmed what some at the company already knew: In its latest quarterly call with investors, Facebook said its youngest users were spending less time on the service, although overall teenage engagement was stable.

ON THE AGENDA  | 
The trial of Michael S. Steinberg, a former portfolio manager at SAC Capital Advisors accused of insider trading, is set to begin this week. Urban Outfitters and Salesforce.com report earnings after the market closes. The CME Group’s Global Financial Leadership Conference kicks off in Naples, Fla.

JPMORGAN’S $4.5 BILLION MORTGAGE SETTLEMENT  |  “The checks from JPMorgan Chase just keep on coming as the nation’s largest bank works to move beyond its mortgage-related troubles,” Jessica Silver-Greenberg reports in DealBook. “On Friday, JPMorgan reached a $4.5 billion settlement with a group of investors over claims that the bank sold them shaky mortgage-backed securities that imploded later, leading to large losses. The multibillion-dollar payout is separate from the tentative $13 billion settlement that JPMorgan reached with the Justice Department over the bank’s questionable mortgage practices in the run-up to the financial crisis. That deal could be announced as early as next week, according to people briefed on the settlement.”

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