Unsafe practices Société Générale agreed to pay $1.3 billion to settle claims by U.S. and New York state authorities that it processed and concealed billions of dollars in transactions in countries under American sanctions, including Iran, Cuba, Libya and Sudan. The transactions took place between 2003 and 2013. The penalties are the second largest imposed on a bank for violating U.S. sanctions, second only to the $8.9 billion penalty levied against BNP Paribas in 2014. Wall Street Journal, Financial Times, American Banker
The Societe Generale SA logo sits on a sign outside the bank's headquarters in La Defense business district in Paris, France, on Tuesday, Aug. 4, 2015. Societe Generale, France's second-largest bank by market value, reported the highest profit since the financial crisis on a surge in equities revenue and announced plans for fresh cost cuts. Photographer: Jason Alden/Bloomberg
Jason Alden/Bloomberg
Going up John Williams, the president of the Federal Reserve Bank of New York, said he expects the Fed will continue to gradually raise interest rates. But Williams, who is also vice chairman of the Federal Open Market Committee, the Fed’s interest rate setting panel, “didn’t offer much in the way of specific guidance about the outlook for rates.”
Separately, Randal Quarles, the Fed’s vice chair for supervision, is set to become the head of the international Financial Stability Board. He will replace Bank of England Governor Mark Carney, whose term ends this year. Klaas Knot, president of the Dutch Central Bank, is expected to be named vice chair of the FSB.
Wall Street Journal
More are welcome Vanguard Group is lowering to $3,000 from $10,000 the minimum investment size on nearly 40 of its biggest index funds, “the latest salvo in its push to lure investors from rivals as asset managers come under pressure to slash the costs of funds.” The new minimums apply to the funds’ admiral shares, which carry lower fees than its regular investor classes. “The funds make up the majority of Vanguard’s index funds that are available to individual investors and include some of the industry’s largest stock and bond index funds.”
Financial Times
Whistleblower speaks The whistleblower in Danske Bank’s massive money laundering scandal told Denmark’s Parliament that as much as $150 billion of the more than $230 billion that was laundered through the bank’s tiny Estonian branch flowed through the “U.S. subsidiary of a European bank.” Howard Wilkinson declined to name the lender but it is understood to be Deutsche Bank. “The revelation leaves Deutsche Bank vulnerable as it is still being investigated by the U.S. Department of Justice for its own part in moving massive amounts of money out of Russia through dubious ‘mirror trades.'”
The paper presents an updated timeline of events in the Danske Bank scandal.
Elsewhere
Upheld The U.S. Circuit Court of Appeals in Manhattan ruled Barclays is not liable to investors who bought its U.S.-traded stock prior to the 2008 financial crisis. The court upheld the dismissal of claims against the British bank and the underwriters who sold $2.5 billion of American depositary shares for Barclays in April 2008.
Quotable
“I don’t want to be here. I think it’s pretty shocking that four-and-a-half years on I need to be here because this disgrace is still being investigated.” — Danske Bank whistleblower Howard Wilkinson, in his first public testimony before the Danish Parliament.
The payment company is expanding the Afterpay buy now/pay later network and offering a Cash App mobile plan as it tries to draw consumers from legacy financial institutions and rival payment firms.
Senators from both parties criticized banks over overdraft fees, though populist Republicans and their more establishment conservative colleagues were split over whether blame for the problem lies with banks conduct or the consumers.
Insurance companies are increasingly shifting their assets into offshore vehicles, where they are being used for…what exactly? We don't know, and that's the problem.
Kasisto developed one of the first conversational AI chatbots for banks, and the deal brings its technology to Backbase's new AI-based bank operating system.
The Federal Reserve's new chair wants to change the way the central bank communicates with markets and the public. What those changes ultimately amount to could represent a major shift in an agency that has made transparency a guiding light for decades.
