Money Minute: BNP Latest European Bank on U.S. Hotseat


France's largest bank is just the latest European bank to find itself in the hot seat for its actions stateside.

Less than a week after Barclays was sued by New York's Attorney General for misleading clients about high frequency traders and roughly six weeks after Credit Suisse (CS) admitted guilt in helping U.S. clients evade taxes, France's BNP Paribas has pleaded guilty to violating sanction laws in the U.S. France's biggest bank has agreed to pay an $8.9 billion fine for transferring money through its New York offices on behalf of countries like Sudan and Iran. Six other banks have settled similar charges, but BNP is the first to admit guilt and it is paying the largest penalty ever for such a crime. It has also agreed to suspend its dollar-clearing business for a year starting in January. And that may prove to be most damaging of all as it will seriously impede their ability to do business with international clients.

A new government report says more than a million people could lose their federally insured pension plans in the next few years. Those at risk are people who have multi-employer pension plans, plans put together by a group of companies along with a union. Ten million Americans have them. They were traditionally seen as safe investments. But a combination of an aging population, deregulation, fewer unions and two market crashes have made it hard for these funds to replenish themselves.

Here on Wall Street on Monday, the Dow Jones industrial average (^DJI) fell 25 points, the Nasdaq composite (^IXIC) gained 10 and the Standard & Poor's 500 index (^GPSC) dropped almost 1 point.

In a decision that could have wider implications, the Supreme Court of New York has just upheld a lower court's ruling that towns in New York state have the right to ban hydraulic fracturing within their borders through zoning ordinances. There is currently a moratorium on "fracking" in New York but the decision could set a precedent for other towns across the nation seeking to keep drillers at bay. The fracking process is controversial with environmentalists saying it contaminates local water supplies. But the President supports fracking and it has lead to a boom in the energy sector putting the U.S. on track to surpass Saudi Arabia's oil and gas output over the next two years.

And finally, reporting on corporate earnings may not be what drives a cub reporter to get into journalism -- it's not exactly exciting -- but it still pays the bills. However, maybe not for much longer. The Associated Press just announced it is automating the bulk of its earnings stories. Software designed by Automative Insights will allow the AP to go from producing roughly 300 earnings stories a quarter to 4,400. The AP says no one is being fired and humans will still write earnings reports for marquee companies like Google (GOOG) and Facebook (FB). The robots begin taking over the rest this month.

-Produced by Karina Huber.

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Confiscate all French assets.,

July 01 2014 at 5:26 PM Report abuse +1 rate up rate down Reply

The U.S. government should not be in the business of insuring private pensions, the responsibility of insuring the financial stability of these funds should be with the private companies. The premiums being paid to insure these pension plans is minimal. This should not be the American taxpayers' responsibility.

July 01 2014 at 9:32 AM Report abuse +4 rate up rate down Reply
1 reply to dssmalik's comment

It's not actually a "guarantee" like say FDIC -- it just insures a minimum and actually came about prior to the financial meltdown due to some high profile companies going belly up and retirees finding themselves with zero income from their pensions. So long as it is a minimum, and not a "dollar for dollar guarantee" on inflated pensions it's not a bad deal while we (hopefully) ween ourselves off of "defined benefit" pensions (which are fundamentally flawed) and onto personal retirement accounts which companies can put money into. In the latter case you'd have what you have even if the company you work for goes broke and never puts another dime into it. Since all retirement accounts are "invested" anyway there would be no added risk to having your own account, and a decided upside in the event the "contributing" companies ceased to exist since those defined pension plans would be paying out money, as long as they had any, to people already retired and all of current workers accrual could be gone before you hit 50.

July 02 2014 at 1:53 PM Report abuse rate up rate down Reply