Big banks chase Schwab; Bramson readies Barclays fight

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Failure fallout
The abortive merger discussions between Deutsche Bank and Commerzbank “underscores the uneven recovery between lenders on either side of the Atlantic and how decisions made during the financial crisis are reverberating today.” The combination of Germany’s two biggest banks “was supposed to put Deutsche Bank, a global player in trading and investment banking, on a path toward profitability and stability. Instead, the firm is now left vulnerable as its core global businesses continue to lag behind those of its U.S. competitors.”

But Deutsche Bank’s chairman Paul Achleitner says its investment bank “doesn’t need a fundamental strategic overhaul” following the merger talk collapse.

Wall Street Journal

Leader of the pack
“After years of ignoring the threat,” Wall Street banks have been “forced to respond” to Charles Schwab Corp. “They’re moving down market and cutting fees across the board, eating into what was once a vital source of income and transforming the business of personal financial services into something that looks more like a commodity business. Once barely noticed by the denizens of Wall Street, Schwab has amassed a stockpile of client assets that dwarfs those at Bank of America’s Merrill Lynch, Morgan Stanley’s brokerage arm and UBS Group’s Americas unit.”

Financial Times

Show time
Edward Bramson, the activist investor who owns a 5.5% stake in Barclays, will “try to force his way” onto the bank’s board at the company’s annual meeting this week. “If successful, his campaign could herald the demise of Britain’s last remaining global investment bank.” However, “the scale of the challenge facing Mr. Bramson at Barclays is greater than anything he has faced before, but his polite, solicitous style is just as unorthodox as it was when he started out. While U.S. activists such as Carl Icahn and Bill Ackman use the media to wage high-profile wars against their targets, his campaign against the bank has taken place almost entirely behind closed doors.”

Still the same
Vernon Hill “was not chastened by his brush with U.S. regulators” when he owned Commerce Bancorp. “He appears to have brought the same approach to his chairmanship of Metro, the fast-growing U.K. challenger bank. He has built his career making sure that his customers get their way while insisting that he gets his own. The sometimes-uneasy balance between the two have made the 73-year-old banker one of the most controversial figures in his industry.” Hill is being sued in a Delaware court by former business partners, whom he "forced out" of their positions.

Failure to act
The head of the European Commission’s financial regulatory body wants the European Banking Authority “to overhaul its money-laundering safeguards” after the EBA voted to close an investigation into Danske Bank’s money laundering failures without adopting any findings. “It is disappointing that the board of supervisors of the EBA did not act on one of the biggest money-laundering scandals in Europe,” said Valdis Dombrovskis, EC vice president for financial services policy.

Washington Post

Bad joke
Stephen Moore, President Trump’s presumptive nominee for a seat on the Federal Reserve Board, apologized for some of his past writings denigrating women, dismissing them as “humor columns” that “weren’t funny,” but said those shouldn’t be held against him. “I’m not saying I’m an angel, but I’m just saying that these kinds of things don’t have a lot to do with whether I’m qualified to be on the Federal Reserve Board and setting interest rates,” Moore said.

Quotable

“He brought to banking a merchandiser’s mindset. He could grow deposits when no one else could grow deposits.” — Hedge fund billionaire Steven Cohen, about Commerce Bank and Metro Bank founder Vernon Hill

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