George Yacik

Receiving Wide Coverage ...Opening bid: The Justice Department has proposed that Deutsche Bank pay $14 billion to settle a series of mortgage-backed securities investigations dating back to the financial crisis, "a number that would rank among the largest of what other banks have paid to resolve similar claims and is well above what investors have been expecting," the Wall Street Journal reported. The figure is preliminary, and it's unclear how much of that proposed amount would be paid in cash and how much might be in consumer relief. Regardless, the bank said it "has no intent to settle these potential civil claims anywhere near the number cited. The negotiations are only just beginning," adding that it expects to settle at a "materially lower" amount.

Receiving Wide Coverage ...Wells probed: Federal prosecutors in at least three districts have begun investigating Wells Fargo's sales practices in the wake of last week's $185 million settlement. The Wall Street Journal reported that federal prosecutors in Manhattan and San Francisco sent subpoenas to the bank. The investigation "is focusing on whether someone senior within the bank directed employees to falsify documents in conjunction with the opening of accounts and products without consumers' knowledge or authorization," the Journal reported. "Prosecutors are also focusing on whether there was willful blindness to sales practices on the part of executives at the bank."

Receiving Wide Coverage ...Blame game: Wells Fargo CEO John Stumpf and CFO John Shrewsberry both tried to deflect blame for the company's phony accounts scandal. In an interview with the Wall Street Journal, Stumpf "appeared to lay blame for the problems with the employees involved than with any flaw in Wells Fargo's systems or culture."

Receiving Wide Coverage ...Stumpf to the Hill: The Senate Banking Committee plans to question Wells Fargo CEO John Stumpf as pressure on the bank grows in light of the unauthorized accounts scandal. Several Wells executives are scheduled to brief panel members Tuesday prior to the hearing, which is scheduled for September 20. "Clearly there is a disconnect between whatever Mr. Stumpf was telling the public and what was actually going on at Wells Fargo — and that's putting it politely," Andrew Ross Sorkin writes in the New York Times DealBook section.

Receiving Wide Coverage ...It ain't over...: Wells Fargo's settlement last week didn't end its woes. While the bank was making apologies, officials were assessing the situation. Sen. Jeff Merkley, D-Ore., a member of the Senate Banking Committee, called on the panel to hold hearings to find out exactly what happened. A member of the Federal Reserve Board also weighed in. "What I have seen is that too many banks, instead of putting in place a comprehensive system for assuring that all their employees understand what is legal and ethical across the board, only respond when there is a particular problem," Fed Governor Daniel Tarullo said in an interview with CNBC. New York Times, Washington Post, American Banker

Receiving Wide Coverage ...Incentive to cheat?: Wells Fargo was hit with the largest penalty in the history of the Consumer Financial Protection Bureau to settle charges that thousands of employees created unauthorized bank and credit card accounts for customers in order to collect bonuses for themselves. The company fired 5,300 employees as a result. The bank agreed to pay a $185 million regulatory enforcement action plus another $5 million in customer remediation. Wells' own analysis found that thousands of its employees had signed up customers for more than 1.5 million deposit accounts and more than 565,000 credit card accounts without their knowledge or consent. They also issued debit cards without customers' approval, including issuing PINs and creating phony email addresses. "The settlement underscored incentives and sales goals led employees to illegally open new accounts," American Banker reports.

Receiving Wide Coverage ...Two heads...: JPMorgan Chase said Mark Leung, head of its Asia Pacific equities business since 2014, and Jason Sippel, global head of prime services, will together run the bank's global equities division. The two replace Tim Throsby, who left to run Barclays' corporate and international division. Wall Street Journal, Financial Times

Receiving Wide Coverage ...Leaving: Tim O'Hara, the head of Credit Suisse's global markets division for just the past 10 months after a 30-year career at the bank, is leaving. He will be replaced by Brian Chin, co-head of credit. The unit has suffered heavy losses over the past year. Wall Street Journal, Financial Times

Receiving Wide Coverage ...Barclays expands team: Tim Throsby, JPMorgan's global head of equities, is moving toBarclays as head of its corporate and international division and chief executive of its corporate and investment bank. He is the latest JPM executive to join CEO James E. Staley, himself a former JPM veteran, at the British bank. Previous JPMorgan hires include Paul Compton, who was named Barclays group chief operating officer in February, and CS Venkatakrishnan, Barclays' new chief risk officer. Throsby is expected to join Barclays early next year. Wall Street Journal, Financial Times, New York Times

Editor's note: Morning Scan will not publish on Monday, Sept. 5 in observance of Labor Day. We'll be back on Tuesday, Sept. 6.

Receiving Wide Coverage ...Call for consolidation: Deutsche Bank CEO John Cryan called for more consolidation in the profit-challenged European banking industry, just after a German magazine reported the bank had considered amd rejected a bid for rival Commerzbank. "It is undeniable that Europe's banks are stuck in a fundamental dilemma," he said in remarks prepared for delivery at a conference in Frankfurt. "We have become significantly more secure since the financial crisis. We maintain more capital and liquidity with fewer risks in our balance sheets. However, we are also far less profitable today." Cryan said the European Central Bank's below-zero-rate monetary policy has made it hard for banks to make money.

Wall Street JournalAML clarification: U.S. banking regulators issued a "Fact Sheet" that tries to clarify anti-money-laundering rules that some critics say are forcing banks to cut off access to innocent countries, businesses and individuals for fear of being penalized. The report is intended to "dispel certain myths" about the rules, which have caused some banks to refrain from serving customers in island nations, emerging-market countries and those in drug-ridden areas, such as the U.S. border with Mexico. In a blog post accompanying the report, senior Treasury officials said regulators resolve "about 95 percent" of compliance failures without penalties and that banks are not required to vet the customers of their foreign bank clients.

Wall Street JournalCutting out banks: Transferwise, the global money transfer startup that has so far worked indirectly with consumers through its bank partners, wants its own independent licenses, eschewing banks. The five-year-old London-based company currently partners with Barclays in the U.K. and Community Federal Savings Bank in New York. It has licenses in 37 states, and can operate independently in three states that don't require licenses. The company's CEO says having its own licenses will enable it to cut costs and offer more features. "This is the latest example of the evolving and complex relationship between aspiring fintech disruptors and traditional banks," the Journal writes.

Wall Street JournalDifferent strokes: As trading revenues shrink and more stringent regulations and higher capital requirements pinch their top and bottom lines, Goldman Sachs and Morgan Stanley "have turned to more basic banking businesses, betting that the cachet of their brand names can overcome relative lack of experience in dealing with the deposits and loans of middle-class Americans."

Wall Street JournalMore sales at Barclays: Barclays is ready to announce three separate asset sales as it trims its balance sheet. The British bank is expected to announce the completion of the sale of its Italian retail business in the next few days, followed soon after by its Iberian credit cards unit and its Egyptian franchise.

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