Editor's note: Morning Scan will not publish on Monday, Oct. 10 in observance of Columbus Day. We'll be back on Tuesday, Oct. 11.
Receiving Wide Coverage ...
Deutsche's battle plan: Embattled Deutsche Bank said it was cutting another 1,000 full-time positions in Germany, on top of the 3,000 cuts it announced back in June.
Separately, the Financial Times reports Deutsche is working on a public spinoff of a minority stake in its asset management division in order to boost capital. Any IPO would come only after it reaches a settlement with the U.S. Department of Justice over allegations it sold toxic mortgage-backed securities and would likely not happen before the first half of 2017.
Banks cut down: The Federal Reserve said big banks have sharply cut back on their use of short-term debt to fund their operations ahead of rules governing money market mutual funds set to go into effect on October 14. The rules require institutional prime funds to abandon their stable $1 share price and float in value like other mutual funds. In recent months, in response to the impending rule change, investors have moved more than $800 billion out of prime funds and into government funds, which are allowed to maintain a stable share price. In response, "banks have cut back on their issuance of commercial paper—securities that prime funds used to buy in droves – as investors have shunned prime funds," the Journal said.
Wall Street Journal
Fees replace commission: Bank of America's Merrill Lynch unit said retirement customers will have to pay a fee based on a percentage of their assets and will no longer have the option of instead being charged commission on each transaction they make. "Merrill is the first major brokerage to eliminate a commission-based account option for retirement investors who want to work with a broker," the Journal said. "The announced move, coming six months since the unveiling of the Obama administration's fiduciary rule requiring brokers to put the interests of retirement savers ahead of their own, is roiling firms across the investing world as they look to comply and even capitalize on the changes." The rule change takes effect April 7.
Separately, BofA named Andy Sieg as the next chief of its Merrill Lynch unit, replacing John Thiel, who is moving up to vice chairman of the global wealth unit. Sieg is currently the head of retirement solutions at Merrill. The changes take effect January 1.
New York Times
Indecent: Big banks had hoped to use Wells Fargo's reputation as a "decent" bank to fight regulatory proposals to curb executive pay and ban merchant banking. But the bank's phony accounts scandal not only weakens the bank's ability to lead the charge, but has fueled calls for even harsher action, writes Gina Chon, Washington columnist at Reuters Breakingviews. "The bank's effective neutering as a bulwark against new regulation is a big blow to the industry," Chon says. The bank's "small Wall Street presence allowed it to avoid virtually all the troubles that have bedeviled its peers since the financial crisis." Not anymore.
Lacy Harber, an 80-year-old businessman and philanthropist from Texas, has joined the fight against Wells Fargo, and in a most public way. Harber, who owns real estate in Las Vegas and several small banks and marinas, took out ads in four large newspapers, including the New York Times, denouncing the bank. "The recent disclosures about Wells Fargo are only the tip of the iceberg," the ad says. Harber has an ax to grind, apparently. He sued the bank after sustaining a $5 million trading loss for 2015 stock trades that went against him, for which he blames the bank's investment brokers. Wells said Harber "has chosen to use the current media focus on Wells Fargo as a means to draw attention" to his case. Wells Fargo said it is "strongly defending [itself] against his claims."
