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By Michael S. Derby
    A Dow Jones Column

NEW YORK (Dow Jones)–Congressional testimony by Federal Reserve Chairman Ben Bernanke Wednesday flagged a potentially seismic shift in how the central bank communicates its objectives to financial markets.

He said odds are high that when policy makers decide to lift short-term interest rates, they will target something other than the fed funds rate, for decades the primary focus of central bank policy. “It is possible that the Federal Reserve could for a time use the interest rate paid on reserves, in combination with targets for reserve quantities, as a guide to its policy stance, while simultaneously monitoring a range of market rates,” he said in written testimony to the House Financial Services Committee, adding “no decision has been made on this issue.” Continue reading…

By Annie Gasparro 
    A DOW JONES NEWSWIRES COLUMN

NEW YORK (Dow Jones)–The steady, if sometimes exaggerated, trend of wirehouse advisers shifting to independent brokerages is proving to be more than just a passing fad.

The independent channel took in about 90 advisers from the four major wirehouses last month, while those wirehouses only hired 25 brokers from independents, according to research firm Discovery’s report on registered representative movement for January.

The four wirehouses are Morgan Stanley Smith Barney, Bank of America Corp.’s (BAC) Merrill Lynch, Wells Fargo Advisors, and UBS Wealth Management U.S. Their biggest indie competitors lately: LPL Financial Corp., Ameriprise Financial Services and Raymond James Financial Services. Continue reading…

By Al Lewis

A DOW JONES NEWSWIRES COLUMN

Terry Smiljanich was an Assistant U.S. Attorney in Tampa, Fla., in the 1970s, prosecuting loan sharks.

“Just like in the movies, guys would come down from New York to collect,” he recalls.

A deadbeat borrower in one of Smiljanich’s cases even survived the cinematic cliche:

“They went into a bar and grabbed him, took him for a little ride, and told him that if he didn’t find a way to pay them off within 24 hours they were going to break his legs.”

High-interest loans with terrifying consequences is such a lucrative business that America’s banking industry lobbied for years to make them legal.

“Bank of America doesn’t break your legs, but they will ruin your credit and they will hound you to death,” Smiljanich said. Continue reading…

Andrew C. Burns, chief investment officer of Hamilton Point Investment Advisors LLC, a registered adviser, Chapel Hill, N.C., writes:

This is the story of how a 130-year-old model banking institution was snuffed out for doing business the way we now wish all banks would. The bank was Wachovia. Its undoing was its insistence on caution in handling other people’s money.

When I worked for Wachovia in the early 1980s, I was struck by how different it was from Irving Trust in New York City, where I had completed a corporate lending and executive management training program. The professionalism was similar, but the atmosphere was so much more, well, egalitarian. At Irving, dining facilities were divided by caste – the lowly ate in a giant cafeteria in the basement, first-level officers had custom dining a few floors up and top executives rode special elevators past the troops to a private space near the top of the building. Wachovia had one country-cooking cafeteria, where leaders including President John Medlin and Chairman Hans Wanders were just as likely to sit with a group of secretaries as a team of banking officers.

Continue reading…

NEW YORK — Summarizing the extremes of the Senate Banking Committee hearing today on the renomination of Ben Bernanke to lead the Federal Reserve will take two quotes.

We’ll start with Sen. Jim Bunning (R., Ky.), the only member of the upper chamber to vote against Bernanke the first time around and a time-tested antagonist of the U.S. central bank.

“In short, you are the definition of moral hazard,” he said.

Continue reading…

By Neal Lipschutz
A DOW JONES NEWSWIRES COLUMN

The first paragraph of The Wall Street Journal article uses the verb “pushed” to describe the decision by outgoing Bank of America Corp. (BAC) Chief Executive Kenneth D. Lewis to go without compensation for 2009.

The pusher, of course, was Kenneth Feinberg, the so-called pay czar put in place by the Obama administration to oversee pay practices at the companies receiving major federal assistance.

Imagine for a moment that this is not about Ken Lewis (a Bank of America spokesman, it should be noted, told the Journal Lewis  voluntarily agreed to go without 2009 pay), but instead about a theoretical CEO at a theoretical company.

The company is performing badly. The shareholders over a sustained amount of time have taken a big hit on their investments. There is significant if not uniform disenchantment with the CEO’s performance based on a number of objective and even subjective variables. Continue reading…

Embattled Bank of America Corp. (BAC) Chief Executive Ken Lewis, fatigued by multiple government probes into himself and his company, will retire at the end of the year.

Who do you think should succeed Lewis as CEO of Bank of America?