ING (NYSE:ING) offers to buy back and exchange $7.7B of debt in an effort to bolster its reserves. The deal is complex but will allow the bank to improve its capital levels without raising additional funds. The Dutch bank follows competitors such Lloyds, BNP Paribas and Commerzbank to exchange their own debt at discounted values and use the gains to strengthen capital.

Bank of America’s (NYSE:BAC) cost to insure its debt with credit default swaps has sometimes surpassed that of Spring 2009. The Street’s David Reilly writes: “There is a growing feeling support may not be there, as it was in 2009, if trouble strikes… [that] investors aren’t so sure too-big-to-fail banks will always deserve that moniker.”

Don’t Miss: Global Factors Hitting Gold and Silver.

Jefferies’ (NYSE:JEF) workforce has been cut by 11%, but shares are outpacing other banks (NYSEARCA:XLF) as CreditSights says JEF is considering increasing its level of disclosures made through its financial reports to address concerns about exposure to riskier credits. CreditSights echoes Fitch in saying JEF should be able to weather recent problems.

Cullen Frost Banker (NYSE:CFR) says it’s acquired Stone Partners, a human resource consulting firm specializing in compensation, benefits and outsourcing services. The amount was undisclosed.

Investing Insights: Barron’s Top 10 Stocks for 2012: Time to Redeem Last Year’s Choices.

Bank of America (NYSE:BAC) and Barclays (NYSE:BCS) are being sued for breach of contract by Lehman, in order to prevent the former parties from selling a 26.5% stake in real estate firm Archstone to Equity Residential (NYSE:EQR) for $1.33 billion. Lehman currently owns 47% of Archstone and wishes to attain control of the company in order to divest it for no less than $6 billion.

In an effort to raise its Tier 1 common capital by $3.9 billion,Bank of America (NYSE:BAC) has finished exchanging preferred shares for common stock and debt. Due to more rigorous worldwide standards, the company has been making efforts to raise capital. Additionally, Bank of America has an interest in quelling  concerns over significant mortgage losses.

Don’t Miss: Fitch Downgrades Major Banks.

Discover Financial (NYSE:DFS) has been upgraded from Hold to Buy by Stifel Nicolaus, with a $29 target price. Stifel Nicolaus cites FQ4 results as verification that Discover is exceeding other credit card companies on numerous fronts, including impressive credit, spending and receivable growth. Stifel recommends DFS as an appealing entry point.

Lender Processing Services (NYSE:LPS) shares have tumbled following Nevada’s AG filing suit against LPS for consumer fraud.

Following an announcement of pricing on $175 million of its convertible senior notes, Amtrust Financial Services (NASDAQ:AFSI) has dropped 9.7%. Nearly $169 million in proceeds from the sale are projected, to then be utilized for general corporate purposes.

Investing Insights: Goldman Sachs Loves These 9 Tech Stocks.

European banks (NYSEARCA:KBE) will have to raise nearly €200B in new capital, or cut their balance sheets by almost 20%, in order to satisfy Basel III requirements that go into effect in 2013, suggests a new study. With credit markets growing tighter, this will be a major challenge. U.S. and Asian banks face a combined shortfall of less than €70B.

Investing Insights: Is Gold’s Bull Market Over?

The news will affect these top European Banks: UBS(NYSE:UBS), Deutsche Bank (NYSE:DB), Barclays(NYSE:BCS), Royal Bank of Scotland (NYSE:RBS), Lloyd’s(NYSE:LYG), and Credit Suisse (NYSE:CS).

Morgan Stanley (NYSE:MS) is poised to eliminate 1,600 jobs in Q1 of 2012, Bloomberg reports. The company has in the neighborhood of 60K employees worldwide. Shares +2.9% premarket.

It looks like Citigroup (NYSE:C) may avoid being fined for offenses including trying to manipulate the Tokyo interbank offered rate, but the WSJ reports it has been told to temporarily halt mutual-fund sales and interest-rate trading businesses in Japan. On the heels of the high jinks, Citi plans to make some changes to its management in the region.

Don’t Miss: Steve Cohen Claims Inside Information is a Gray Area.

Morgan Stanley (NYSE:MS) has reportedly had to return around $700M to investors in its flagship global real-estate fund. It has been forced to cut the fund’s fees following lackluster performance. The concessions have persuaded investors to give the fund an extra year, until June 2013, to invest.

Charles Schwab (NYSE:SCHW) lowers Q4 EPS expectations after average daily trading volume plunged 15% in November, and E-Trade (NASDAQ:ETFC) says its average trading volume dropped 10%. November was tough on discount brokers, after volume had been increasing for much of the year on surging market volatility.

Don’t Miss: Is Gold’s Bull Market Over?

Goldman Sachs (NYSE:GS) has lost 37 partners in 2011 according to Bloomberg in the wake of its worst year for profits and share performance since 2008. The firm’s partners have much of their wealth tied up in sagging GS stock, and are collectively the firm’s biggest stakeholder with a 13.8% piece of the pie.

Pushing higher despite a weakening stock market is Progressive (NYSE:PGR) is pushing higher despite a weakening stock market. The market reports November net income of $0.20/share vs $0.17/share a year ago, with net premiums written during the month rising 6% Y/Y to $1.07B.

Discover Financial (NYSE:DFS) clings to positive territory after Credit Suisse ups estimates ahead of its Q4 due to lower charge-off rates. In September and October DFS trust net loss rate improved 34 bps to 3.26%. The firm raises Q4 EPS estimates to $1.00 from $0.84 to up the improvement, and FY11 EPS estimates to $4.10 from $3.95. Separately, CLSA recommends closing Discover, saying the company will beat expectations.

Investing Insights: SmartMoney’s Top 10 Stocks for 2012.

Deutsche Boerse (DBOEY.PK) and the NYSE (NYSE:NYX)formally offer to sell the London-based derivatives exchange, Liffe. They are doing so as an effort to get their deal past the antitrust concerns of European regulators. They will also license the Eurex trading system to a 3rd party and give rivals better access to their clearinghouse.

Citigroup (NYSE:C) sells its remaining stake in Primerica (NYSE:PRI). It is offering up 8M shares in a public offering. A subsidiary of Citigroup will receive all of the net proceeds. Citigroup Global Markets Inc. will act as sole book-running manager.

Investing Insights: Here’s the Worst Bank for Customer Satisfaction.

Morgan Stanley (NYSE:MS) entered into a settlement withMBIA (NYSE:MBI) concerning several lawsuits over credit default swaps. The settlement is expected to lead to a $1.8B pretax charge for MS but also frees up capital. The settlement “better positions the firm for Basel III by resolving outstanding legacy exposures and releases capital to reinvest in our client-focused businesses.”

According to the latest American Customer Satisfaction Index, respondents chose Bank of America (NYSE:BAC) as the least-satisfying big bank for consumers. Citigroup (NYSE:C) andWells Fargo (NYSE:WFC) tied at the top with 73 out of 100. Overall ratings for big banks keep falling further behind credit unions and smaller banks.

Don’t Miss: Retailers to Credit Card Giants: Your Study is Wrong.

Get Your FREE Special Report: 4 Things You Must Know About the US Economy Now!