In the money: A group of 350 current and former Goldman Sachs executives and board members are sitting on stock options they received during the financial crisis that are now worth at least $3 billion at current market prices. Goldman issued 36 million options in December 2008 with an exercise price of $78.78, the stock price at the time, but are now worth twice that. David Solomon, the bank’s next CEO, owns 27,000 of them.
Embrace the new: Morgan Stanley is changing its brokers’ compensation plans to get them “to embrace new technology in a move meant to draw in more clients and a bigger share of their wealth.” The new system is designed to “reward those who use recently launched financial-planning tools that give more visibility into where clients have their money — including funds held elsewhere — and how they spend it.”
Food fight: Foods Co Supermarkets, a Kroger unit that caters to shoppers on a budget, said it will stop accepting Visa credit cards at 21 California stores and five gas stations to protest what it says is the payments company’s high swipe fees. The chain, which said it would continue to accept Visa debit cards, has had ongoing discussions with Visa about the fees but decided to stop taking credit cards on Aug. 14 as a last resort.
Comeback: Credit Suisse is on track to record its first annual profit in four years after its profit for the second quarter more than doubled compared to the year earlier period. “The results largely support Credit Suisse’s decision nearly three years ago to beef up its wealth-management business and scale back on investment banking, which can be profitable but is also volatile and costly to run. Credit Suisse is in the final months of the three-year overhaul engineered by Chief Executive Tidjane Thiam, who joined the bank in the middle of 2015.”
Elsewhere
The road not taken: JPMorgan CEO Jamie Dimon said he talked to Amazon founder Jeff Bezos about a job two decades ago, before deciding to stick with banking. “He was looking for a president and I flew to Amazon after I left Citi — was fired from Citi — and we had a great lunch,” Dimon said on CNBC. “It was just a bridge too far for me to move my whole family to Seattle, at that age, at that time, to something I didn't fully understand, as opposed to I'd been in financial services my whole life.”
James "Jamie" Dimon, chief executive officer of JPMorgan Chase & Co., listens during a forum session on the opening day of the World Economic Forum (WEF) in Davos, Switzerland, on Wednesday, Jan. 23, 2013. World leaders, Influential executives, bankers and policy makers attend the 43rd annual meeting of the World Economic Forum in Davos, the five day event runs from Jan. 23-27. Photographer: Chris Ratcliffe/Bloomberg *** Local Caption *** Jamie Dimon
Chris Ratcliffe/Bloomberg
Loss leader: Square is looking to boost its Cash money transfer platform by providing consumers with incentives to use its card. Called — what else? — Boost, the program offers discounts to customers at popular restaurants for using their Cash card. “Square will presumably lose money on [the program] in the near future,” MarketWatch reports. “The bigger goal, however, is to get (younger) users to conduct more of their spending on Square’s card. In that case, Square might still lose money on these discounts but earn transaction fees on purchases made with the Cash card at other merchants.”
Quotable
“Presidents get a lot of credit [and] a lot of blame for things they didn't do, but the president has done things which accelerated growth. We needed competitive taxes. The way the American public should be thinking of it is: For 20 years, we've been increasingly uncompetitive, driving capital and brains overseas.” — JPMorgan Chase CEO Jamie Dimon.
For the better part of the past decade, the Federal Reserve Board in Washington has played a more active role in presidential searches by regional reserve banks. The shift seems to have made the system more diverse, but some argue at the expense of regional bank independence.
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.
