Bank of America to increase its prime lending rate to 3.50% from 3.25%, effective immediately

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Citibank raises its base lending rate to 3.50% from 3.25% - @CNBCnow See original on twitter.com  banking  21m Bank of America to increase its prime lending rate to 3.50% from 3.25%, effective immediately - @CNBCnow See original on twitter.com  United States  26m US stocks rally after the Federal Reserve raises key rate; Dow gains about 224 - @CNBC Read more on cnbc.com  economic indicators  37m US dollar trades lower against its main rivals after the Federal Reserve raises its benchmark interest rate - @MarketWatch Read more on marketwatch.com  banking  41m PNC Bank raises its prime rate to 3.50%, effective tomorrow - @CNBCnow See original on twitter.com  US economic indicators  59m Federal Reserve Chair Yellen: US income prospects are improved, car sales up, housing 'has been recovering very slowly' - @CNBC Read more on cnbc.com  US economic indicators  1h Federal Reserve Chair Yellen: We have seen 'substantial improvement' in US labor market conditions End of alert  United States  1h Federal Reserve Chair Yellen, in response to a question, says the bank could study negative interest rates if the economy needed it - @MarketWatch Read more on marketwatch.com  United States  1h Federal Reserve Chair Yellen: I'm confident about the fundamentals of the US economy End of alert  US economic indicators  1h CBOE volatility index hits session low as Federal Reserve's Yellen speaks, last down 12% - @ReutersBiz See original on twitter.com  US economic indicators  1h Federal Reserve's Yellen: Economic recovery has come a long way, still room for labor market improvement; monetary policy remains accomodative - @CNBCnow See original on twitter.com  US economic indicators  1h Federal Reserve Chair Yellen urges press not to 'overblow' the significance of first quarter-point rate hike End of alert  United States  1h Federal Reserve's Yellen: Recent softness in US inflation data is attributed to 'transitory' factors that are expected to abate - @WSJ Read more on blogs.wsj.com  US economic indicators  1h Federal Reserve Chair Yellen: The stance of US monetary policy remains 'accommodative;' committee expects only gradual increases in fund rate will be warranted. End of alert  US economic indicators  1h Federal Reserve Chair Yellen: 'The economic recovery has clearly come a long way although it is not complete' - @BCAppelbaum =================================================== The Federal Reserve System‍—‌also known as the Federal Reserve or simply as the Fed‍—‌is the central banking system of the United States. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, largely in response to a series of financial panics, particularly a severe panic in 1907. Over time, the roles and responsibilities of the Federal Reserve System have expanded, and its structure has evolved. Events such as the Great Depression in the 1930s were major factors leading to changes in the system. The U.S. Congress established three key objectives for monetary policy in the Federal Reserve Act: Maximum employment, stable prices, and moderate long-term interest rates. The first two objectives are sometimes referred to as the Federal Reserve's dual mandate. Its duties have expanded over the years, and as of 2009 also include supervising and regulating banks, maintaining the stability of the financial system and providing financial services to depository institutions, the U.S. government, and foreign official institutions. The Fed conducts research into the economy and releases numerous publications, such as the Beige Book. The Federal Reserve System's structure is composed of the presidentially appointed Board of Governors or Federal Reserve Board (FRB), partially presidentially appointed Federal Open Market Committee (FOMC), twelve regional Federal Reserve Banks located in major cities throughout the nation, numerous privately owned U.S. member banks, and various advisory councils. The federal government sets the salaries of the Board's seven governors. Nationally chartered commercial banks are required to hold stock in the Federal Reserve Bank of their region, which entitles them to elect some of their board members. The FOMC sets monetary policy and consists of all seven members of the Board of Governors and the twelve regional bank presidents, though only five bank presidents vote at any given time: the president of the New York Fed and four others who rotate through one-year terms. Thus, the Federal Reserve System has both private and public components to serve the interests of the public and private banks. The structure is considered unique among central banks. It is also unusual in that the United States Department of the Treasury, an entity outside of the central bank, creates the currency used. The Fed considers the Federal Reserve System "an independent central bank because its monetary policy decisions do not have to be approved by the President or anyone else in the executive or legislative branches of government, it does not receive funding appropriated by the Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms." The U.S. Government receives all the system's annual profits, after a statutory dividend of 6% on member banks' capital investment is paid, and an account surplus is maintained. In 2010, the Federal Reserve made a profit of $82 billion and transferred $79 billion to the U.S. Treasury

Securitizing rent has more problems than promise

Your rent is my bond Securitizing rent has more problems than promise 26 July 2012 | By Daniel Indiviglio Several firms, including Colony Capital and Waypoint Homes, are exploring using securitization to finance purchasing blocks of foreclosed homes. Issuers would rent out these homes and securitize their tenants’ monthly payments to create bonds for investors to purchase. The details of how such a transaction would look remain sketchy. Underlying properties may or may not secure the transactions. Wall Street’s wizards think they have finally have found a way to clear up foreclosures. The securitization industry is aching to work its magic on blocks of repossessed properties that have been, or could be, turned into rented accommodation. Done properly, that could help finance investors buying such homes from Fannie Mae and Freddie Mac. But creating bonds from monthly tenant payments faces serious obstacles. Such a product - let’s call it a foreclosed rent-backed security, or FRBS - might borrow a couple of features from its asset-backed brethren. Like commercial mortgage bonds, for example, it would finance buildings that rely on rental income. But like credit card bonds, it might not be backed by any hard assets - it might simply rely on rental income alone. That makes it a real challenge because of the utter lack of useful data for this proposed security. First, the new product may require an entirely new infrastructure for appraising how rentable a home is and at what price. And the faults that the crisis exposed in securitization reinforce how crucial a good crop of historical information is on rental trends. Without them, investors and rating agencies will have no certainty on loss estimates. They’ll also have to make assumptions on new stats like vacancy rates, tenant turnover costs and property management fees. Moreover, potential buyers of the bonds are unlikely to assume the income on a property is stable until tenants have lived in the home for some time or signed a medium to long-term lease. That practice is unusual for renters just moving in. Property managers will also need vetting and monitoring. And with foreclosures focused in a few key regions and resulting rentals appealing to specific segments of the population, concentration risk is likely to be magnified. Tot it all up and these are more than enough challenges for bondholders to demand some juicy compensation for ponying up the cash. That raises the prospect that FRBS could cost more than it’s worth. But even if bankers and issuers do work out the kinks, a deal might not close for years.