Four playing fields The Federal Reserve voted 3-to-1 to approve a draft proposal that calls for looser capital and liquidity requirements on large American banks, "one of the most significant rollbacks of bank rules since President Trump took office." The plan "would divide big banks into four categories based on their size and other risk factors. Regional lenders would be either entirely released from certain capital and liquidity requirements, or see those requirements reduced. They could also, in some cases, be subject to less frequent stress tests. The largest U.S. banks … wouldn't see any significant rule changes." Wall Street Journal, Financial Times, New York Times, American Banker
AIG battered again American International Group reported a $1.26 billion third-quarter net loss following big losses from "Asian typhoons, California mudslides, and Hurricane Florence." Yet the deficit was less than the year-earlier period's $1.74 billion loss, when the company got hit with claims from three major hurricanes. "Excluding the impact of catastrophe claims, the most-recent results showed modest progress in the company's goal of earning an underwriting profit in its core business of selling property and casualty policies to corporate clients." Wall Street Journal, Financial Times
A security guard stands inside the American International Group Inc. (AIG) headquarters office in New York, U.S., on Tuesday, Jan. 29, 2016. American International Group Inc., the insurer being pressured by activist investor Carl Icahn to divest assets, had the outlook on its credit rating changed to negative from stable by Standard & Poor's after announcing plans to sell a stake in mortgage insurer United Guaranty Corp. Photographer: Victor J. Blue/Bloomberg
Victor J. Blue/Bloomberg
Wall Street Journal
Talent competition Capital One finds itself "competing with Silicon Valley for talent in software engineering, artificial intelligence and cybersecurity, as it seeks to deliver on its mission to operate like a nimble tech company under the direction of CIO Rob Alexander." "I think the great separator between the companies that survive in this digital transformation and the companies that are roadkill will be their ability to attract and retain great technology talent," Alexander said.
Talent wars are also raging in the private-equity business, where companies are offering "22-year-old spreadsheet crunchers" starting salaries of $300,000 or more as the industry competes to hire young investment bankers. "The instigator was Thoma Bravo LLC. Word spread quickly to rivals like Blackstone Group, Apollo Global Management and Carlyle Group."
Taking a stake Activist hedge fund Hudson Executive Capital has taken a 3.1% stake in Deutsche Bank, "betting the German lender's new chief executive can revive its sagging profits by pursuing a turnaround strategy investors so far have found unconvincing." Hudson chief Douglas Braunstein calls the bank "misunderstood and undervalued."
Failure to deliver Bitcoin celebrated its 10th anniversary on Wednesday, but not everyone is cheering as the price of the digital currency is down sharply from its late 2017 peak. It also has failed to become "the one thing it was built to be: a payments system." "Apart from the group who are passionate about it for ideological reasons, it hasn't caught on," admits Jeff Klee, CEO of online ticket-booking service CheapAir, which accepts bitcoin for payment.
Quotable
"The proposals before us would prescribe materially less stringent requirements on firms with less risk, while maintaining the most stringent requirements for firms that pose the greatest risks to the financial system and our economy." — Fed chair Jerome Powell on the plan that would relax regulations on some large banks.
"This increases the risk that the taxpayers will again be on the hook." — Fed governor Lael Brainard, who voted against the proposal.
After two successful international expansions, Junqueira aims to bring Nubank's products to U.S. consumers even as the neobank faces strong competition from U.S.-based banks and fintechs.
A group of European banks have formed Qivalis, which expects to launch its coin in early 2026 as a counter to the U.S. dollar-led market. Plus, Singapore regulators give Ripple permission to expand and other news in the global payments and fintech roundup.
Treasury Secretary Scott Bessent said the Federal Reserve Board should reject the renomination of any regional Federal Reserve Bank presidents who have not lived in their districts for three years, signaling a potential confrontation when reappointments come before the board in February.
In a sternly worded letter, Sen. Elizabeth Warren and Rep. Maxine Waters demanded to know why federal agencies haven't provided more guidance since the one-cent coin was discontinued. They accused the Trump administration of making an "abrupt and unilateral decision" without thinking it through.
Royal Bank of Canada now expects to achieve an annual return on equity of at least 17% by 2027, executives said Wednesday, up one percentage point from the bank's earlier goal.
