A tale of two CEOs; OneMain deal near?

Receiving Wide Coverage ...
Best men for the job?: Despite his faults, John Cryan remains the best hope for leading Deutsche Bank, the Heard on the Street column argues. “Deutsche Bank still has a long journey to good returns and it won’t get there quicker by changing its chief executive,” it says. “No other leader would escape Deutsche’s shackles more swiftly. A change would only risk delays.”

Peter Frommenwiler/Bloomberg

Cryan isn’t the only head of a big European bank who’s under a lot of heat. Barclays CEO Jes Staley “is facing growing pressure on two fronts,” the Financial Times writes. Stockholders are losing patience “with his investment banking strategy and sluggish share price, while regulators prepare to decide whether he should be allowed to stay in his job.”

And the Nobel goes to...: University of Chicago Professor Richard H. Thaler, “whose work has persuaded many economists to pay more attention to human behavior, and many governments to pay more attention to economics,” according to the New York Times, was awarded the Nobel Prize in economics Monday.

Thaler “helped to advance automatic enrollment in retirement-savings plans and automatic increases in contributions to these plans, a major shift in how Americans save money,” the Journal noted. He also “upended the longstanding notion that individuals make rational decisions about their futures and finances and helped to develop policies intended to nudge people toward altering their choices.” Wall Street Journal, New York Times, Washington Post

Wall Street Journal
Where’s the growth?: Despite the promise of President Trump’s pro-business policies, the growth rate in bank lending to corporations has shrunk to 2.1% from 8.1% since last November, according to the Federal Reserve.

For sale: OneMain Financial, the subprime lender formerly owned by Citigroup, is “in advanced discussions with a number” of prospective buyers, the paper reports. If a deal occurs, “it would be one of the biggest financial industry transactions at a time when the bank mergers and acquisitions sector is relatively muted,” it adds.

The company, which Citigroup sold to rival Springleaf two years ago, has about 1,700 branches and 2.2 million customers, making it one of the largest players in the subprime niche. Fortress Capital owns about 55% of OneMain’s shares.

Passing grades: The European Central Bank said 111 banks passed stress tests, suggesting they could withstand a repeat of the financial crisis, including sharp interest-rate increases or other rate shocks.

Maybe we should care: While many, if not most, people probably could care less about whether bitcoin and other digital currencies are in a price bubble, the paper argues maybe they should start worrying. “As the bubble grows, analysts say, a crash has a greater chance of affecting investor sentiment about stocks, especially in the technology and financial sectors,” the paper says.

“Any product that blows up, there’s always collateral damage,” Joe Kinahan, chief market strategist at TD Ameritrade, told the paper.

New York Times
Dodd-Frank overhaul: The Treasury Department released a report Friday that recommended “a vast reworking” of the Dodd-Frank financial reform law, including giving “companies more access to capital and investors more places to put their money,” the paper reports. “The ideas were welcomed on Wall Street, where banks complain that Dodd-Frank rules have needlessly hobbled growth,” it says. “But they attracted skepticism from consumer groups and others, who consider the suggestions a dangerous relaxation of checks against a cavalier financial system.”

Quotable
“In order to do good economics, you have to keep in mind that people are human.” — University of Chicago Professor Richard H. Thaler after winning the Nobel Prize for Economics.