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morning scan

Morning Scan: Wells Fargo Eyes GE Business Loans; Chip-and-Pin Mayhem

Breaking News This Morning ... Earnings: Fifth Third, Synovus Receiving Wide Coverage ... Bank Tax Backfire? British banks HSBC and Standard Chartered are considering fleeing the land of tea and crumpets for Asia in order to avoid the U.K.'s steep bank taxes. The discussion comes at the behest of shareholders rattled by Britain's decision last month to increase the bank tax by a third. (The tax has been hiked eight times since it was implemented in 2010, according…

Morning Scan: Deutsche to Ditch Postbank; Does the DOJ Give Banks Sweetheart Deals?

Receiving Wide Coverage ... Putting Postbank to Pasture: One way or another, Deutsche Bank plans to ditch its Postbank retail unit. The German megabank is leaning toward selling a majority stake in Postbank over the next year and a half whilst unloading a fifth of its investment-banking assets. But it's also considering the more drastic measure of getting out of retail altogether. The latter move has been recommended by some analysts, who say Deutsche should attempt…

Morning Scan: Bloomberg Terminal Failure Delays Trading; Fed Rate Worries

Receiving Wide Coverage ... Bloombergs Go Kaput: Add another name to the list of companies deemed systemically important: Bloomberg LP. The financial-data provider's terminals went down in Asia and Europe overnight, or perhaps even worldwide, leading the U.K.'s debt-management office to cancel a scheduled transaction to buy back government debt. The total system failure prompted Louis Gargour, chief investment officer at LNG Capital, to say, "a global outage like this is systemically important to markets all…

Morning Scan: Bernanke to Join Hedge Fund Citadel; B of A's Weak Returns

Breaking News This Morning ... Earnings: Citigroup, Key Corp, Goldman Sachs New York Times Former Fed chairman Ben Bernanke is set to take a job as an adviser to hedge fund Citadel. Banks had recruited Bernanke, he told the paper (without naming his suitors), but he declined their offers. It's a well-worn path between the Federal Reserve and the private sector, particularly hedge funds. Former Fed chair Alan Greenspan worked as a consultant to hedge fund…

Morning Scan: BNY Mellon Fined by U.K. Regulator; Target, MasterCard Discuss Settlement

Breaking News This Morning ... Earnings: Bank of America, PNC, U.S. Bancorp Receiving Wide Coverage ... Custody Bank Fined: Bank of New York Mellon has been fined £126 million, or about $185 million, by a U.K. regulator for failing to keep client money separate from its own proprietary accounts in its London office. The rules are intended to protect client assets if the bank were to became insolvent. BNY Mellon failed to implement sufficient governance measures to prevent…

Morning Scan: Citi CEO Succession Plan Set? Pot Bank's Exit Strategy

Breaking News This Morning ... Earnings: JPMorgan, Wells Fargo Wall Street Journal Citigroup's reshuffling of executives announced on Monday included the appointment of a clear number two executive behind CEO Michael Corbat. Citi named Jamie Forese its sole president, making him the likely successor to Corbat should he step down, unnamed sources told the paper. Forese's promotion was not mentioned in a letter Corbat sent to Citi employees on Monday. Forese is currently head of Citi's investment bank…

Morning Scan: GE Capital Sale Kicks Off; Wells Fargo Expands Investment Banking

Receiving Wide Coverage ... GE Turns Off Bank Switch: Plenty of digital ink was spilled late Friday and over the weekend about General Electric's decision to sell its GE Capital unit. The Wall Street Journal suggests in one of its takes the exit decision represents a chance for banking and non-bank companies to acquire assets that could transform a company. The largest piece of the business up for sale is GE's $74 billion-asset commercial lending and…

Morning Scan: GE Out of Banking; Rand Paul Takes Bitcoin, Natch

Receiving Wide Coverage ... A Farewell to Banking: For General Electric, the banking business has lost its allure. The company plans to sell or spin off the bulk of its finance unit, GE Capital, over the next two years, returning to a focus on its industrial manufacturing business. Although the $500 billion-asset GE Capital brought in roughly half its parent company's earnings, it also came with a slew of regulations and risks that apparently weren't worth…

Morning Scan: Dimon Rattles Regulators' Cages; Prosper's Fresh Funding Round

Receiving Wide Coverage ... Dimon Throws Down: Outspoken JPMorgan Chase chief Jamie Dimon isn't afraid to raise some hackles — and that tendency is on full display in his annual letter to shareholders. The Financial Times and Bloomberg both focus on Dimon's prediction that regulatory requirements will be to blame for the next financial crisis. His letter argues that capital and liquidity rules have limited banks' ability to withstand market turmoil, and predicts the next crisis…

Morning Scan: Against 'Audit the Fed'; Ex-Bankers Learn to Love the Startup Life

Wall Street Journal When bankers leave Wall Street to chase their own startup dreams, they're bound to face a lifestyle adjustment. The paper interviews several "Wall Street exiles" about the transition "from a relatively coddled life of chauffeured town cars and teams of junior staffers to days filled managing the books and picking the office furniture." One anonymous interviewee admits to mourning the loss of his old firm's shoe-shine service, while another says taking the subway…

Morning Scan: Turmoil at Bitcoin Foundation; Bank Service on Wheels

Receiving Wide Coverage ... Dudley Do-Rate: Rate hikes remain on the horizon for 2015 despite Friday's disappointing jobs report, according to New York Fed head William Dudley's Monday speech, as interpreted by the media. Dudley attributed sluggish economic results for the first quarter to "temporary factors," including a rough winter and the strong dollar's drag on exports. But he "expects inflation to firm and wages to pick up later this year," according to the Wall Street…

Morning Scan: Big-Bank CEO Pay Ain't What It Used to Be; Of Rabbis and Wall Street

Wall Street Journal Big-bank CEOs still make plenty of dough — but the job's not as lucrative as it used to be. Pay for the top bananas at the five largest Wall Street firms "remained well below pre-crisis levels" at a collective $92.5 million last year, the paper reports, down 47% from pooled earnings of $173.6 million in 2006. Meanwhile, the average bank employee's paycheck reached a new high of $148,740 last year. "The dichotomy shows…

Morning Scan: Silicon Valley Bank's Enviable Spot; Currency Volatility to Help Earnings

Wall Street Journal Volatility in currency markets should give a boost to banks' first-quarter earnings. Currency market volatility rose 18% from Jan. 1 to mid-March, according to Deutsche Bank. However, not every bank will glean a benefit from the currency volatility. Citigroup is expected to report a decline in trading revenue because of its exposure to the Swiss franc. The irony is that JPMorgan Chase, Citigroup and others remain at the center of government probes into…

Morning Scan: New Credit Score for the Underbanked; Ex-Chargers Linebacker Sues B of A

Wall Street Journal Fair Isaac is developing a new credit score that's aimed at the millions of people who currently don't have credit scores and are cut off from auto loans, credit cards and mortgages. About 53 million Americans are now unable to qualify for most types of bank-issued consumer credit because they don't have a credit history. The product "is largely a response to banks’ desire to boost lending volumes by increasing loan originations to…

Morning Scan: Federal Agents Nabbed in Silk Road Heist; JPMorgan Execs Deposed

Receiving Wide Coverage ... When Nob Met Dread: Two federal officials assigned to investigate Silk Road, the digital marketplace for drugs that only accepted payment via Bitcoin, have been charged with illegally using the defunct black-market service to enrich themselves. An agent with the Drug Enforcement Administration and a Secret Service agent have resigned and been charged with money laundering and wire fraud. The DEA agent, named Carl Mark Force IV, has also been charged with…

Morning Scan: Mortgage Foreclosure Cases May Soon End; Barney Frank's Autobiography

Wall Street Journal In a review of former Sen. Barney Frank's new autobiography, "Frank: A Life in Politics From the Great Society to Same-Sex Marriage," the Wall Street Journal recounts what former House Speaker Tip O'Neill told his colleague: Frank could have been the first Jewish Speaker of the House of Representatives, had he not been gay. James Kirchick's review says little about Frank's work on banking matters, and doesn't mention the Dodd-Frank Act. "Many readers'…

Morning Scan: CFPB-Payday Loan Grumbling; Porat's Worth to Google

Receiving Wide Coverage ... Too Much or Not Enough: Depending on who you ask, the Consumer Financial Protection Bureau's newly proposed restrictions on payday lenders may be characterized as a prime example of regulatory overreaching or as a milquetoast response to toxic practices. Both consumer advocates and payday lending supporters are disappointed by the CFPB's proposals, according to the New York Times. "A chorus of consumer groups said that loopholes in the proposal could still leave…

Morning Scan: Payday Loan Reforms Previewed; Amex Is Mum on Plans

Wall Street Journal The Journal takes a look at the Consumer Financial Protection Bureau's upcoming rules for payday lenders, set to be released today, as did American Banker in today's edition. The Journal's piece includes a quote from Lauren Saunders at the National Consumer Law Center, who said the CFPB's proposal doesn't go far enough. "The CFPB has taken an either/or approach: prevention or protection. But borrowers need both," Saunders said. The Journal also quoted Dennis…

Morning Scan: Is Silicon Valley Winning the Battle for Talent?

Receiving Wide Coverage ... Go West, CFOs: Ruth Porat's move from chief financial officer at Morgan Stanley to the same position at Google has sparked a surge of think pieces on Wall Street's diminished lure compared to the creative yet lucrative jobs in Silicon Valley — and more than a few contrarian responses. The New York Times' Neil Irwin cheers Porat's decision as an indicator that the tech sector has dibs on the country's top talent,…

Morning Scan: Foreign Banks' Living Wills Get Thumbs Down; NYSE May Delist Ocwen

Receiving Wide Coverage ... Living Will Letdowns: When it comes to living wills, banks face a tough crowd. So it may not come as a total shock that regulators rejected the living wills of foreign banks BNP Paribas, HSBC and Royal Bank of Scotland Group, instructing them to address deficiencies in their wind-down plans for U.S. units by the end of the year or face possible sanctions. Eleven U.S. banks received similar orders from the Federal…

Morning Scan: Would More Skin in the Game Make Banks Safer?

Wall Street Journal Zions Bancorp is a comparatively small and simple fish in the "too big to fail" pond, but it's among the banks that's struggled most with the Federal Reserve's stress tests. The paper implies that Zions' predicament may be indicative of the problems with the $50-billion asset threshold used to determine which institutions are systemically important. The Salt Lake City lender focuses on "meat and potatoes banking," like lending and taking deposits, whereas most…

Morning Scan: BNY Mellon to Pay $714M to Settle Forex Case; B of A's Breakup Proposal

Receiving Wide Coverage ... Not the Best: Bank of New York Mellon agreed to pay $714 million to settle litigation that accused the custody bank of defrauding clients on currency transactions. Stemming from a lawsuit filed in February 2011, the Manhattan U.S. Attorney and the New York State Attorney General said BNY Mellon gave some clients worse prices on foreign currency trades than promised. Put another way, BNY Mellon promised "best execution" of the foreign-currency trades,…

Morning Scan: Banks in Energy Loan Pickle; Fed Flexible on Rate-Hike Timing

Receiving Wide Coverage ... Embrace the Unknown: The Federal Reserve is "patient" no more, but it's not exactly raring for an interest-rate hike. In dropping the word from its statement Wednesday, the Federal Open Market Committee made room for the possibility that it will increase its benchmark rate as soon as June without committing itself to that timeline. "If the strengthening dollar and falling oil prices start to translate into still-lower expectations for future inflation, the…

Morning Scan: Facebook Readies Money-Transfer; Citi, Barclays to Settle Forex Suit

Receiving Wide Coverage ... Facebook 'Likes' Payments: Comes now Facebook to the electronic money-transfer wars. Facebook will let users send money to friends, Romans and countrymen using its Messenger service, the Times, Journal and FT all reported, citing a Facebook blog post. It's Facebook's first foray into peer-to-peer money transfers. The service is free (for now) and a user only has to upload a Visa or MasterCard debit card to her Facebook account. The service will…

Morning Scan: Apple Pay Fraud Questions; Military Members Victimized by Arbitration

Wall Street Journal Citigroup is among at least a dozen companies that have given in to activist shareholders' demands to nominate directors, a strategy known as proxy access. Calpers, one of the largest activist shareholders, describes the trend as a "sea change," while the New York City Comptroller said it's only a matter of time before most companies allow for proxy access. New York Times …

Morning Scan: Rebound in Bank Stocks Not Expected Soon; Stress Test Complaints

Wall Street Journal Tap the brakes on those hopes for a rebound in bank stocks in the near future. The same old worries bank investors know so well are expected to continue this year, analysts and investors told the Wall Street Journal. Low interest rates will continue to compress profit margins. Excessive U.S. regulations continue to drive up costs. Legal bills will also remain elevated. These reasons are cited by analysts and money managers quoted in…

Morning Scan: Mastering the Art of Stress Tests; SEC's Tough Enough, Says White

Receiving Wide Coverage ... Practice Makes Perfect: Have U.S. banks finally cracked the code on stress tests? Whatever your opinion, there's an article that will reaffirm it. The Wall Street Journal suggests the Fed's annual capital review still keeps banks guessing, pointing out that Goldman Sachs, JPMorgan Chase and Morgan Stanley all overshot their proposed shareholder payouts by a significant margin. They collectively shaved off at least $11 billion in payouts in order to meet the…

Morning Scan: Muddling Through Stress Tests; Do Big Banks Need Fresh Blood?

Receiving Wide Coverage ... Stress Test Wrap: All 31 of the biggest U.S. banks managed to pass the Fed's stress tests this year, but for four of them it was less a "flying colors" sort of victory and more about muddling through. Goldman Sachs, JPMorgan Chase and Morgan Stanley received approval for their capital-payout plans only after adjusting them to ensure their capital ratios stayed above minimum requirements. Bank of America got conditional approval to go…

Morning Scan: Boost for Bitcoin; More Stress Test Stress

Receiving Wide Coverage ... Bitcoin's Big Coming Out: So maybe Bitcoin isn't just for money launderers and drug dealers. Some well-placed folks must think Bitcoin has a role in the mainstream. Two examples emerged on Tuesday of new efforts to expand Bitcoin's use by the broader establishment. Blythe Masters, a former JPMorgan Chase executive, has been named chief executive of Digital Asset Holdings, a new Bitcoin trading platform. Masters helped pioneer the credit-derivatives market in the…

Morning Scan: Feds Worried About Nomura Litigation?; Cuomo Blasted

Wall Street Journal An unsigned Journal editorial makes the argument that the feds are scared out of their wits by the potential of going to a jury trial in a case involving mortgage-backed securities. Japanese bank Nomura — one of the 18 banks named in the Federal Housing Finance Agency 's 2011 lawsuit — is willing to fight the government's lawsuit claiming Fannie Mae and Freddie Mac were victimized by the banks, which didn't inform the…

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