Receiving Wide Coverage ...
Hedges hurting: Eric Mindich, the youngest ever to make partner at Goldman Sachs before he went out on his own, is closing his $7 billion hedge fund, Eton Park Capital Management, "the latest sign of how mounting troubles for hedge funds are hurting even stars of the business," the Wall Street Journal intoned. Mindich, who joined Goldman right out of high school and made partner at 27, earning himself the nickname "Doogie Howser," opened his fund in 2004 "amid frenzied investor interest," taking in $3.5 billion at launch.
But the firm has run into trouble recently, and disappointing returns led to a 50% drop in investor assets since peaking in 2011. The fund reportedly lost 9% last year, versus a 12% return for the S&P 500. The Journal offers an account of Mindich's career. Wall Street Journal, Financial Times, New York Times
Bucking the trend: Bucking the trend at other big global investment banks, Credit Suisse increased its bonus pool by 6% last year despite posting a big loss. The bank said it made "strong progress" in meeting its strategic objectives. Wall Street Journal, Financial Times
Wall Street Journal
Culture is key: Another Federal Reserve Bank president sounded off on the Wells Fargo phony accounts scandal. San Francisco Fed chief John Williams told the paper the incident demonstrates that regulators must examine cultural issues at banks as much as they look at financial risk. On Tuesday, New York Fed President William Dudley said banks must make more progress on changing their culture.
Tech upgrade: The paper's CIO Journal spotlights KeyCorp CIO Amy Brady, who is leading the overhaul of the bank's technology infrastructure following its $4.1 billion acquisition of First Niagara of last year. The effort "includes building new software and discarding old, moving some systems to the cloud, and experimenting with artificial intelligence." The bank says that modernizing IT will save $400 million in costs after the integration.
Room to run: Bank stocks may have hit a recent peak, but the outlook for American banks is still positive, the Heard on the Street column says. "A standout in the postelection rally, banks still offer decent value relative to the rest of the market with good news still coming on rates and regulation."
Going digital: Royal Bank of Scotland said it is closing more than 150 branches in the U.K. as more of its customers switch to digital banking. The bank, which is still majority owned by the British government, said transactions in branches have dropped by 43% since 2010, while online and mobile transactions have jumped more than 400%. British banks have closed a total of 1,000 branches over the past two years in order to reduce costs. Likewise, Citigroup said it plans to close three of its four London branches in order to cut costs and focus on digital services.
Staying put: Unlike two of its American counterparts, Deutsche Bank is committed to London. The German bank has begun negotiations for a new London headquarters it intends to move to in 2023. Earlier in the week, Goldman Sachs and Morgan Stanley said they were planning to move some of their employees out of the British capital in response to Brexit. "The move underlines the bank's commitment to the City of London and the importance it attaches to being an employer of choice in the capital," said Garth Ritchie, Deutsche's U.K. chief executive. The bank plans to consolidate its people in the one location, rather than scattered across several London locations as they are now.
"To me this is just another example of the importance of the soft side of supervision, which is really about management, governance and culture. I think this is going to be the ongoing challenge that we all face." — San Francisco Fed President John Williams on the Wells Fargo scandal