Wrong move: Barclays CEO Jes Staley's attempt to find out the identity of a whistleblower at the British bank "not only can have negative ramifications for the company, but it serves as a prime example to other companies of what not to do when it comes to handling whistleblower complaints," according to two attorneys interviewed by the Wall Street Journal.
Any adverse action taken against the employee will be assumed to be retaliation, whether it is or not, said one of the lawyers. Not only that, but companies could wind up undermining a culture of integrity they've built.
On a similar note, the Financial Times says that Staley's action puts his reputation at risk, which could undermine his ability to make the changes he wants to make at Barclays. "If you stand up now to a room full of people and say 'ethics are very important,' are they going to query you?" asked the bank's former head of talent. Current bank employees told him that they're worried that Staley is "a bit damaged by this internally."
Approved: The U.K.'s Competition and Markets Authority has approved MasterCard's £700 million acquisition of Vocalink. The acquisition raises MasterCard's position in the British payments market. Vocalink was previously owned by a group of 18 U.K. banks and building societies, including Lloyds, Barclays, HSBC and Royal Bank of Scotland. Wall Street Journal, Financial Times
Wall Street Journal
Changes unveiled: House Financial Services Committee Chairman Jeb Hensarling, R-Texas, released changes to his proposal to roll back the Dodd-Frank Act, including promising regulatory relief for banks if they hold enough capital. Separately, President Trump hurled yet another brickbat at the 2010 financial reform law. "We are doing a major elimination of the horrendous Dodd-Frank regulations. Keeping some obviously, but getting rid of many," the president told a meeting of CEOs at the White House.
Representative Jeb Hensarling, a Republican from Texas and chairman of the House Financial Services Committee, right, speaks as Representative Ann Wagner, a Republican from Missouri, listens during a news conference after attending an executive order signing by U.S. President Donald Trump, not pictured, at the White House in Washington, D.C., U.S., on Friday, Feb. 3, 2017. Trump signed two directives aimed at staring the process of rolling back the regulatory system put in place after the financial crisis. Among the targets are rules that protect against predatory lenders, force brokers to lower fees for retirees and ban proprietary trading. Photographer: Andrew Harrer/Bloomberg
Andrew Harrer/Bloomberg
Welcome to earnings season: The bank stock rally may be over, but strong first-quarter earnings and a positive outlook for the rest of the year could give them another lift, the Journal's Heard on the Street column says. Three of the biggest American banks, JPMorgan Chase, Citigroup and Wells Fargo, all report first-quarter earnings on Thursday.
The Journal examines five things to watch from this week's bank earnings announcements.
Failure to launch?: The Journal looks at bitcoin, which, after its birth eight years ago, "has failed to emerge as a mainstream payment method among consumers." And while many people and financial institutions are working hard to adopt the technology behind bitcoin, blockchain, "it is mostly to transact in items besides bitcoin."
Financial Times
Feud heats up: MoneyGram rejected claims by Euronet, which is trying to elbow out Ant Financial from buying MoneyGram, that Ant's bid poses a risk to U.S. national security. On Sunday, Mike Brown, Euronet's chief executive, told the FT that Ant Financial — whose investors include companies owned by the Chinese government and Jack Ma, the founder of Alibaba — would fail to win U.S. security clearance because many MoneyGram vendors are located near American military bases. Alex Holmes, MoneyGram's CEO, said those claims are "simply untrue." Euronet has offered to buy MoneyGram for $940 million, well above Ant's $880 million bid.
Quotable
"It is very seductive for people within organizations to want to find out and hunt down whistleblowers but inevitably it ends badly for the organization." — Jordan Thomas, a partner at law firm Labaton Sucharow.
Amid healthy first-quarter loan growth and improving credit quality, Discover Financial Services slashed its profits by $800 million to offset remediation costs from a 16-year period when it overcharged certain merchants.
Federal Reserve Governor Michelle Bowman said she believes there is a feasible path forward for the revised capital reform proposal, emphasizing the importance of making broad changes informed by industry feedback to achieve broad consensus among Federal Reserve board members.
From the early uncertainty and illness associated with Covid-19, to subsequent wars, supply chain issues, rising prices, inflation and layoffs, there has been a lot to deal with. And workers are in the doldrums right now.
The Office of the Attorney General in New York says the bank violated the state's Exempt Income Protection Act, illegally transferring customers' money to debt collectors.
