Receiving Wide Coverage ... Settled: HSBC’s Swiss Private Bank agreed to pay €300 million ($352 million) to resolve a French investigation into tax-related issues involving the unit’s clients. The agreement includes no finding of guilt against the bank. Wall Street Journal, Financial Times
Wall Street Journal Still vulnerable: The departing chairman of the Federal Deposit Insurance Corp. warned against loosening banking restrictions enacted in the wake of the financial crisis, saying such a move could put the financial system at risk of another meltdown. Martin Gruenberg, whose term expires at the end of this month, said in prepared remarks for a speech at the Brookings Institution, the financial system remains vulnerable to a downturn if capital requirements and other restrictions are eased.
Softer tone: Penalties imposed by the Securities and Exchange Commission dropped 15.5% during the latest fiscal year to a four-year low, “showing how a more friendly tone from regulators and the transition of political power can yield relief for Wall Street,” the paper reports.
“Enforcement against Wall Street has softened,” said Urska Velikonja, a Georgetown University law professor who prepared the statistics for an article scheduled to be published next year in the Notre Dame Law Review. “There are fewer cases against Wall Street firms during this period and when there are, the fines are lower.”
Fed possibilities: Mohamed El-Erian, the former CEO of Pimco and a former deputy director of the International Monetary Fund, is a candidate for vice chair of the Federal Reserve, the paper says. The Trump administration is also reportedly considering Kansas bank commissioner Michelle Bowman for the Fed board of governors seat reserved for a community banker or community bank regulator.
Mohamed El-Erian, chief executive officer and co-chief investment officer of Pacific Investment Management Co. (PIMCO), speaks during a Bloomberg Television interview in New York, U.S., on Tuesday, Sept. 27, 2011. Policy makers in Europe "finally" understand the severity of the region's sovereign-debt crisis and the actions that need to be taken, according to El-Erian. Photographer: Emile Wamsteker/Bloomberg *** Local Caption *** Mohamed El-Erian
Emile Wamsteker/Bloomberg
Easing fees: Wells Fargo is making it easier for customers to avoid overdraft fees. The bank’s “Overdraft Rewind” automatically reverses overdraft fees if the customer makes a direct deposit covering the shortfall by the next morning. Wells also said it will no longer charge overdraft fees for any transaction of $5 or less.
On the down side, Wells laid off about 50 salespeople in its merchant services unit, which processes credit card transactions for small-business customers. The bank said it is reducing the number of employees in the business “to better align with current volumes” and that it is trying to find other jobs within the company for those laid off.
Catch us if you can: Bank of Tokyo Mitsubishi UFJ, a unit of Japan’s biggest bank, converted to a federal banking charter even as it was being investigated by its prior regulator, the New York State Department of Financial Services. The switch has the approval of its new regulator, the Office of the Comptroller of the Currency, the paper reports, but not New York, which still insists it has authority over the bank, although the bank is challenging that in court.
Financial Times Keep an open mind: Another day, another divergent opinion on digital currencies. This time it’s UBS Chairman Axel Weber, the past president of Germany’s Bundesbank and once a candidate to head the European Central Bank, who says central banks should be more open to creating digital versions of their currencies. “Whilst the official sector very often looks at the risks of these new means of payment, the private sector tends to look at the opportunities they offer,” he told the paper.
Investing in Big Brother: Citigroup has invested $20 million in Behavox, a three-year-old fintech company that uses artificial intelligence software to monitor what employees do. The investment by Citi “is the latest sign that providers of artificial intelligence software to monitor the phone calls, emails and electronic chats of bankers are riding a wave of surging growth,” the paper comments.
The Conference of State Bank Supervisors says the OCC's 2011 preemption rules are out of step with Supreme Court rulings and unfairly disadvantage the state banking system.
Incentive pay for investment bankers at major firms is expected to fall this year by 13% from 2021 levels, according to a consulting firm's report. But stock traders may reap the rewards of market volatility.
The 2020 case, in which the Securities and Exchange Commission tried to hold Ripple accountable to securities law, offers little clarity for the regulation of crypto tokens.
Credit risk transfers, which gained traction in 2022 and 2023 as banks sought to manage their capital levels, may now become a solution for lenders looking to reduce their exposure to commercial real estate loans.
Research from American Banker finds banks are top AI users and plan to stay at the top for the future. But can rising costs hurt chances for positive results?
Federal Reserve Gov. Michael Barr said global supply chain disruptions and inflation caused by tariffs could weigh heaviest on small businesses, especially those with little access to credit.
