Overnight Finance: Rough day for the NYSE

TOMORROW STARTS TONIGHT: STOCK EXCHANGE GLITCH LAUNCHES NEW CYBER CONCERNS. David McCabe for The Hill: “The New York Stock Exchange temporarily suspended trading on all securities for more than three and a half hours on Wednesday because of technical problems. Trading was suspended at about 11:32 a.m. on Wednesday, and the New York Stock Exchange didn’t reopen until 3:10 p.m. — 50 minutes before the close. Stocks continued to be sold on other markets during the shutdown, and the New York Stock Exchange’s electronic exchange continued to operate. The suspension triggered fears of a cyberattack, but officials with the exchange said it was due to technical problems.”

Two points…

1.) This will cause new regulatory concerns. The former chairman of the New York Stock Exchange (NYSE) called on Securities and Exchange Commission (SEC) officials Wednesday to address protocol for other markets when one market suspends trading. Richard Grasso, who led the NYSE between 1995 and 2003, raised concerns that other markets such as NASDAQ would be able to take advantage after NYSE officials temporarily halted trading. http://bit.ly/1HgrkiN

{mosads}2.) NYSE officials are getting mixed reviews at best for their handling of the glitch. Former New York City Mayor Rudy Giuliani slammed New York Stock Exchange (NYSE) officials for their “atrocious” handling of a temporary shutdown of trading on Wednesday. “The biggest problem here is they’re not explaining it. … The crisis management here is atrocious,” Giuliani said on Fox Business Network’s “Cavuto: Coast to Coast.” He said NYSE officials “haven’t thought out basic crisis management.” http://bit.ly/1J53R2e

THIS IS OVERNIGHT FINANCE, and it’s already Wednesday.  Tweet: @kevcirilli; email: kcirilli@digital-release.thehill.com; and subscribe: http://digital-release.thehill.com/signup/48

FACT-CHECKING HILLARY CLINTON’S CNN INTERVIEW, via WSJ: http://on.wsj.com/1D1pyOG

HIGHWAY DRAMA, via Bernie Becker: “Senate Majority Leader Mitch McConnell threw cold water Wednesday on a bipartisan plan to use revenue from tax reform to repair the nation’s crumbling roads and bridges, even as Republicans grope for a way to keep highway projects running this summer. 

“McConnell (R-Ky.) signaled plans to take up consideration of a highway funding bill as early as next week, less than three weeks before a looming July 31 deadline. But while McConnell offered few details on what Republicans would offer, he expressed deep skepticism that a new tax reform framework put forth by Sens. Rob Portman (R-Ohio) and Charles Schumer (D-N.Y.) holds the solution.” http://bit.ly/1Cq6Khg

FINED: J.P. MORGAN, via Vicki Needham: “J.P. Morgan Chase will pay $136 million to settle a joint state-federal investigation over its shoddy credit card debt-collection practices.” http://bit.ly/1CpEqLL

FED MINUTES: ‘CAUTIOUS’ FED WORRIES OVER GREECE, via CNBC: “Federal Reserve officials struck a notably dovish tone in their most recent discussions about monetary policy, while at the same time setting the groundwork for future rate hikes. Minutes released Wednesday from the June Fed Open Market Committee meeting reveal the thinking behind yet another delay in normalizing policy. Members agreed the economy was getting better yet felt unready to exit a policy of zero interest rates that began in late 2008.” http://cnb.cx/1MfWmII

EX-IM WATCH: OVERNIGHT CONVERSATION: JIM JORDAN. I caught up with the chairman of the House Freedom Caucus and here’s his take on the bank: “Congress must step up and take advantage of this unique opportunity to fix a key part of our national infrastructure in a fiscally responsible way, without gimmicks or accounting tricks. We must make sure the highway bill stays focused on funding construction and upkeep of roads and bridges in a way that doesn’t put us further into debt, and that the bill is not used as a vehicle to resurrect the Export-Import Bank. The two have nothing to do with each other.  One is about the future, and the other is about the past.  Attaching an Ex-Im Bank reauthorization to highway funding would poison the legislation.”

CFPB WATCH, via Housing Wire’s Trey Garrison: “More leading mortgage and housing industry trade groups are asking the Consumer Financial Protection Bureau to push back its effective date for the Know Before You Owe mortgage disclosure rule to the end of the year, or at least extend the grace period.

“For now, the CFPB proposes to move the rule’s effective date to Oct. 3, 2015, from its original Aug. 1 date and its subsequent Oct. 1 change. The rule, also called the TILA-RESPA Integrated Disclosure rule, requires additional mortgage disclosure forms and a more complex compliance apparatus for lenders. The required loan documentation consists of two new forms: the Loan Estimate and the Closing Disclosure to ensure compliance.” http://bit.ly/1Hi59pt

GLASS-STEAGALL FALLOUT. I caught up with Richard E. Farley, a partner at the leveraged insurance group of law firm Paul Hastings LLP in New York City. Farley was extremely critical of Sen. Elizabeth Warren’s (D-Mass.) reintroduction of the bill that would reinstate the separation of commercial and investment banking. “Small banks are riskier than big banks, which has been proved time and time again.  Breaking up the largest — and safest — banks will increase systemic risk,” Farley said. “Financial transactions with systemic risk would not go away with a new Glass-Steagall; they will simply move to less regulated, more risky, areas of the market place with less oversight. How ironic that the Financial Stability Oversight Commission just identified the unregulated nature of non-bank leveraged lending as an emerging systemic risk while the Fed and OCC are pushing it out of the regulated banks.”

— YOU READ IT HERE LAST NIGHT, but the industry is concerned that Warren’s bill will reverberate into the 2016 debate. Jaret Seiberg of Guggenheim Securities in a note to clients: “Our concern is that this could become something that a presidential candidate endorses as part of an appeal to the populist anger over the financial crisis that still exists today.”

JACK LEW: STOP SAYING CFPB SHOULD SHUT DOWN, via Government Executive: “The Consumer Financial Protection Bureau, which after five years remains in the cross-hairs of Republican critics, has earned an end to calls for its abolition, Treasury Secretary Jack Lew said on Wednesday. ‘The CFBP is doing important work and was protected with independent funding,’ Lew told a Brookings Institution audience after a speech marking this month’s fifth anniversary of the 2010 Dodd-Frank Financial Reform Act. ‘Those who have concerns should see that the bureau has broad overwhelming support and has done everything in a careful way, listening to all sides. Its track record should be enough to put all that to rest.'” http://bit.ly/1Tm4kUS

FIDUCIARY FIGHT, via Nick Thornton for BenefitsPro: “Fee-based RIAs could face considerable disruption to their businesses if the Department of Labor’s fiduciary rule stands as written, according to analysts at Fitch Ratings. Much of the analysis of the potential impact of a uniform fiduciary standard has been geared to estimating the rule’s affect on the commission-based revenue streams of broker-dealers.” http://bit.ly/1CpHjMx

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