Receiving Wide Coverage ... Playing coy: Consumer Financial Protection Bureau Director Richard Cordray “laid the groundwork for his possible return to Ohio politics, giving an impassioned speech about inequality and his agency’s work” at an AFL-CIO Labor Day picnic in Cincinnati on Monday. But while “the speech took place amid building speculation” that Cordray will soon leave the agency to run for governor, he failed to directly address that subject.
Richard Cordray, director of the Consumer Financial Protection Bureau (CFPB), testifies during a House Financial Services Committee hearing in Washington, D.C., U.S., on Tuesday, Dec. 8, 2015. The Financial Stability Oversight Council's effort to enhance its transparency is "important," Securities and Exchange (SEC) Commissioner Mary Jo White said at the hearing. Photographer: Drew Angerer/Bloomberg *** Local Caption *** Richard Cordray
Wall Street Journal Slipped my mind: Federal Reserve Bank of New York President William Dudley was investigated and subsequently cleared of any wrongdoing for failing to disclose earlier this year that his half-sister worked at Wells Fargo as a product management executive. An investigation by an external law firm found Dudley’s original failure to disclose the connection was “inadvertent,” adding Dudley hadn’t participated in any decisions regarding Wells.
Pouring water on the fire: Chinese regulators Monday declared initial coin offerings illegal, ordering fundraising through digital token sales to “cease immediately.” The move by China, which follows a recent warning by the U.S. Securities and Exchange Commission that it may treat the coin offerings as securities and regulate them, deals “a blow to the latest financial-markets mania” and depressed the prices of bitcoin and ether, the two leading digital currencies, the paper reports.
Financial Times New London hire: Citigroup has hired UBS veteran Jean-Baptiste Petard as co-head of its global services unit, “a move that underscores the U.S. bank’s continued investment in London despite Brexit,” the paper reports. Petard will concentrate business and payments services “where many fintech companies are concentrating their efforts,” it said.
Board changes down under: Commonwealth Bank of Australia, which has been under scrutiny recently for shoddy anti-money laundering practices “that have dented confidence in governance” at the bank, has revamped its board of directors. On Monday Australia’s largest bank said it named Robert Whitfield, a former Westpac executive and the secretary of the New South Wales Treasury, to its board. Two nonexecutive directors will be retiring while a third member’s tenure will end in one year.
New York Times Goodbye SIFI?: The Treasury Department is expected to issue a report next month about raising the bar or doing away with the "systemically important" label (a term which the Times uses interchangeably with "too big to fail") on the nation's biggest financial institutions. "It is unclear whether the White House will move to entirely eliminate the label, a product of the Dodd-Frank financial regulations, but analysts and industry officials predict that its use will most likely be curtailed significantly," the paper reports.
Quotable “People are hanging onto bank stocks hoping for a regulatory reprieve. But from an operating standpoint, there are obviously concerns for banks.” — Justin Wiggs, managing director in equity trading at Stifel Nicolaus, discussing falling bond yields and their negative impact on bank profits.
The Cleveland-based bank is projecting steady growth in net interest income even as credit losses remain manageable. But Chairman and CEO Chris Gorman also said that he thinks a recession is likely.
The first-quarter increase involved commercial real estate loans, including some problematic multifamily loans and an office credit, but none of the criticized loans were to consumers, officials at the Dallas company say. Further CRE deterioration is anticipated.
The Detroit-based company is exploring ways to make more consumer auto loans without running afoul of stricter capital standards that are expected from the Federal Reserve. Possible approaches include more securitizations and the use of credit risk transfers.
The House Financial Services Committee also sent to the full House two bipartisan bills, including one that would prevent large banks from opting out of having to recognize Accumulated Other Comprehensive Income in regulatory capital.
Charge-offs and nonperforming loans rose at the Georgia bank in the first quarter. But it blamed the problem on one large client and said the matter has been resolved.
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.
