Receiving Wide Coverage ...
Another Day, Another Probe: Swiss regulators are investigating whether seven banks worked together to manipulate precious-metals trading prices. The banks under investigation by the Swiss regulator WEKO are UBS, Julius Baer Group, Deutsche Bank, HSBC, Barclays, Morgan Stanley and Mitsui. Similar probes have already been put underway by U.S. and European Union regulators. Wall Street Journal, Bloomberg, Financial Times.
Wall Street Journal
The Federal Reserve may raise capital requirements for large insurance firms, according to remarks prepared for a speech by Fed governor Daniel Tarullo. Tarullo's speech doesn't delve into details about the Fed's forthcoming rules for insurance firms, but he does say that the current capital requirements fail to "make some of the relevant distinctions" between traditional insurance companies and systemically important ones that engage in derivatives trading and other complex activities.
Fintech firm Aspiration is using a pay-what-you-wish model for financial services that offer "100 times the interest rates provided by checking accounts at banks, no minimum balance requirements, no monthly service fees and free access to ATMs." The paper sounds pretty cynical about this whole "free" concept, raising the memory of a company called Juno Online Services that tanked during the dot-com bubble.
Banks should curb their enthusiasm about presidential candidate Jeb Bush's proposal to roll back the Dodd-Frank Act, according to David Reilly of "Heard on the Street." "Tearing up the rulebook now would lead to fresh changes that could mean further upheaval and disruption within banks," he suggests. What's more, he writes, the Federal Reserve is unlikely to relax capital requirements either way.
Financial Times
Big banks plan to pour cash into longer-term assets in the wake of the Federal Reserve's decision to hold off raising rates, the paper reports. Wells Fargo began implementing this strategy this year with the goal of "earning today rather than maintaining all of that sensitivity for the future," in the words of the bank's chief financial officer John Shrewsberry. (A Dickensian name indeed.)
What if Fed officials are wrong about the strength of the global economy? The paper's Gabyn Davies explores the options available to central banks should a recession arrive sooner rather than later, including quantitative easing, helicopter money and "crypto" money, which would "involve banning physical cash while forcing everyone to use a sort of government-sponsored bitcoin currency."
New York Times
Regulators should tread lightly when it comes to Bitcoin, according to an op-ed by Michael Beckerman, the head of a trade group representing Internet companies. Beckerman is particularly insistent on the importance of avoiding rules that would force modifications to the Bitcoin protocol.
Elsewhere ...
Big banks are violating the terms of the landmark 2012 mortgage settlement meant to help struggling homeowners avoid foreclosure, according to POLITICO's interviews with housing counselors, Legal Aid lawyers and government prosecutors. The issue is that "the settlement deal was crafted in a way that limited oversight and gave banks a wide enough margin of error that they wouldn't be held accountable if they continued their bad practices," according to POLITICO. These bad practices include botching loan modification requests and pushing ahead with the foreclosure process without borrowers' knowledge.
The New York Post reports that banks are attempting to keep a closer eye on employees by partnering with high-tech surveillance firms. Banks' new software programs track "employees' social media, how often they send emails on personal accounts, withdraw money from ATMs, when they enter and leave the building, when they plan private conversations, and what they do on the shadowy 'deep web,'" according to the paper.
