Receiving Wide Coverage ... New to the Citi: Citigroup has hired Karl-Georg Altenburg, a former high-profile investment banker at JPMorgan Chase and Deutsche Bank, as a senior adviser. He joins a new advisory board that includes several senior Citi executives and former European politicians that will help the bank and its clients navigate the post-Brexit European Union.
Citi also named Toby Ali, formerly of Bank of America, as co-head of its leveraged finance business in Europe, the Middle East and Africa (EMEA).
Wall Street Journal Help wanted: The Trump administration is having trouble filling a Federal Reserve board seat with someone who has community banking experience. The reason: “Ethics rules require Fed governors and their immediate family members to divest themselves of holdings in any financial firms to avoid potential conflicts of interest. But many of the country’s small banks are privately held and run by third- or fourth-generation executives.”
Bottom-fishing: Berkshire Hathaway is making a bet on the depressed retail sector, buying a 9.8% stake in Arizona-based Store Capital Corp., a real-estate investment trust. “The $377 million investment from Berkshire is a wager that some types of storefronts will continue to attract shoppers, even as online shopping has forced the U.S. retail industry to close stores at a record pace,” the paper comments.
In the cloud: Bank of America said it has chosen Oracle Corp.’s cloud-based enterprise resource and financial planning software for use in the bank’s international general ledger and broker-dealer systems. The bank expects to run 80% of its technology in the cloud within the next few years, according to Cathy Bessant, BofA’s chief operations and technology officer.
Cathy Bessant, chief operations and technology officer for Bank of America Corp., speaks during a Bloomberg Television interview in New York, U.S., on Wednesday, April 20, 2016. Bessant discussed the bank's digital technology and her outlook for fintech. Photographer: Michael Nagle/Bloomberg *** Local Caption *** Cathy Bessant
Michael Nagle/Bloomberg
New AML regime: The European Union’s Fourth Anti-Money Laundering Directive went into effect on Monday. The directive, which was enacted two years ago, includes new risk modeling and enhanced due diligence. “It tightens things up, and makes it more difficult to introduce illicit money into the legitimate financial system,” said Scott Moritz, a managing director at consulting firm Protiviti.
Taking profits: Investors took profits in cryptocurrencies on Monday following a massive run-up in prices the past few weeks. Ether, the digital currency used on the Ethereum network, dropped 24% and has now lost 41% of its value since gaining more than 4,000% earlier this year. Bitcoin, which had tripled since April 1, fell 7%. “My gut says we are headed for a selloff in the crypto sector,” venture capitalist Fred Wilson writes in a blog post.
The sell-off may have been sparked by false rumors that Ethereum co-founder Vitalik Buterin had died.
Financial Times Happy 50th: On the 50th anniversary of the installation of the first ATM — by Barclays in the north London suburb of Enfield — cash-machine makers are working to make them interact better with smartphones to meet changing consumer needs. “With increased smartphone use, and Silicon Valley companies wading into the payments industry, banks and ATM makers have put interaction with mobile devices at the center of their new machines,” the paper says. “They hope that rather than being subsumed by mobile payments, ATMs will be able to absorb them.”
New blockchain platform: Seven of Europe’s biggest banks have hired IBM to build a blockchain-based trade finance platform for small businesses to finance their cross-border orders. “The move highlights how many bankers see trade finance as an area with the greatest potential to benefit from blockchain technology,” the paper says. The participating banks include Deutsche Bank, HSBC, and Société Générale.
New York Times Prescription for disaster: The proposed repeal of orderly liquidation authority for failing banks and replacement with a bankruptcy system is a “splendid plan, if one desires to return to the Gilded Age, with a financial crisis at least once every decade,” Stephen J. Lubben, a professor at Seton Hall Law School and an expert on bankruptcy, says. Bankruptcy “will be irrelevant for the really big banks and won’t work for medium-size banks," he says. "As a result, we will bail out both in the next financial crisis.”
Washington Post Bigger is better: McMansions may not be cool anymore, but they’re coming back anyway, the paper says. “As Americans have started building and flipping houses again,” they are once again buying these sprawling houses “that typified the boom times before the Great Recession.”
Quotable “We are convinced that blockchain will have a huge impact on banks in the future and that trade finance is one of the biggest areas of potential for the technology.” — Rudi Peeters, chief information officer at KBC.
Many legal experts think the Supreme Court will rule in favor of the Consumer Financial Protection Bureau in a case challenging its funding. Such a ruling would unleash a flurry of litigation that has been on hold pending the outcome of the constitutional challenge.
Lawmakers including one of the original sponsors of the Corporate Transparency Act have filed an amicus brief in the appeal against an Alabama court ruling that the law is unconstitutional, which would throw into question Treasury's newly-established beneficial ownership structure.
The Connecticut bank —a regional traditionally regarded as a cautious lender — said nonperforming loans and leases rose 53% year-over-year. The uptick was in mostly the commercial-and-industrial loan space, although there was one nonperforming commercial real estate loan, executives said.
The two regional banks are anticipating that borrower demand will increase in the back half of the year. High interest rates and economic uncertainty have been muting the appetite for borrowing.
In a letter to Treasury Secretary Janet Yellen last week, the Massachusetts senator highlighted the growing use of cryptocurrencies by malicious organizations abroad and underscored the need for anti-money-laundering and counterterrorism provisions in future proposals.
