DTCC moving to the blockchain; Goldman's new tech chief

Receiving Wide Coverage ...

Acid test: The Depository Trust and Clearing Corp., the world's main data repository for credit derivatives deals, is moving its database to the blockchain, "the first big test case for whether the emerging technology can be employed across the finance industry," the Financial Times said. The DTCC, which processes more than $1.5 trillion of securities a year, will use technology from IBM and blockchain start-ups R3 and Axoni. Work on the project is expected to begin later this month and go live in about a year.

"The decision marks a further advance into global markets by blockchain" and "represents an acid test for the technology that will be closely watched by a banking sector looking to make cost savings in an era of low interest rates and tougher regulation," the FT said. "The announcement is one of the most advanced steps yet in Wall Street's continuing effort to harness the technological concepts underlying Bitcoin," the New York Times commented. Financial Times, New York Times

New gig: Goldman Sachs named Elisha Wiesel, currently the chief risk officer in its securities division and the son of Elie Wiesel, the late Holocaust survivor and human-rights advocate, as its new chief information officer and top-ranking technology officer. He replaces R. Martin Chavez, who was named Goldman's next chief financial officer. "Technology has become more central to Goldman since the financial crisis," the Wall Street Journal commented, "It is powering new businesses — such as the bank's foray into consumer banking, which lives online only — and has made existing ones more efficient, helping to preserve trading share with clients." Wall Street Journal, Financial Times, New York Times

Wall Street Journal

Divided: Donald Trump's economic team is split between "market-oriented advisers from the Washington and Wall Street establishment on one side and free-trade adversaries on the other," the Journal reports. "That could lead the White House in unpredictable directions as it tries to steer the U.S. toward faster growth." But Trump officials say the president-elect likes a diverse range of views to help "flesh out his unique brand of economic nationalism."

Fighting back: China's mobile-payments market is dominated by tech firms such as Ant Financial and Tencent, which together control nearly 90% of the $4 trillion market, while the country's state-owned banks have largely been left on the sidelines. Now, however, "through a combination of new regulation and increased efforts to launch mobile-payments platforms, the state sector is fighting back," the Journal reports.

Virtual terror money: Indonesia said Islamic militants in the Middle East are using bitcoin and online-payment services such as PayPal to fund terrorist activities in the country. "They used virtual money because that would make it harder for us to track the transaction," said the chairman of the Indonesian Financial Transactions Report and Analysis Center.

Financial Times

Down, down, down: Wells Fargo is expected to its report its fifth straight quarterly profit decline this week as it continues to take on expenses to deal with the aftermath of its phony accounts scandal. Operating costs are expected to rise by nearly $700 million compared to the year-earlier quarter, the FT said, including increased legal and investigation costs. Wells has also hired more risk professionals to improve oversight and more customer service employees to handle customer complaints. The bank may also make provisions for potential additional penalties and litigation.

Short-changed: The Federal Deposit Insurance Corp. is suing Bank of America for more than $500 million in unpaid insurance premiums. The agency claims that over a five-year period the bank "failed to assess its own risks correctly and thus short-changed the Deposit Insurance Fund," the FT said. According to the FDIC, "BofA under-reported its counterparty exposures by tens of billions of dollars each quarter by failing to consolidate them properly at the holding-company level," the paper said. "As a result, it paid much less in premiums than it should have paid."

Quotable ...

"This is a real tangible step into what could be a very different future for Wall Street." — Michael C. Bodson, chief executive officer of the DTCC, on the company's move to the blockchain