More problems Deutsche Bank, which already has its hands full with scandals in multiple countries, now finds itself in the cross-hairs in the U.S., where two Democrat senators want the Senate Banking Committee to launch a “thorough, detailed bipartisan committee investigation” into the German bank. “The compliance history of this institution raises serious questions about the national security and criminal risks posed by its U.S. operations,” senators Elizabeth Warren of Massachusetts and Chris Van Hollen of Maryland wrote in a letter to Mike Crapo, R-Idaho, the committee’s chairman.
Deutsche Bank AG signage sits on the side of a branch in Hamburg, Germany, on Saturday, Feb. 13, 2016. Deutsche Bank plans to buy back about $5.4 billion of bonds in euros and dollars as it seeks to allay investor concerns about its finances. Photographer: Krisztian Bocsi/Bloomberg
Krisztian Bocsi/Bloomberg
Tax relief for foreign banks The Treasury Department has proposed rules that would provide relief to foreign banks in dealing with last year’s tax law. “Treasury offered banks relief from the tax on interest payments made to comply with a regulation requiring them to hold long-term debt in reserve. In addition, the tax won’t apply to certain payments foreign banks make from their U.S. subsidiaries to U.S. branches that are technically part of the foreign corporation.”
Giant partnership BlackRock and Microsoft plan to work together to build technology tools to help workers plan and invest for retirement. The proposed technology platform would “provide digital financial-planning tools and new BlackRock funds offering guaranteed retirement income to employees through their workplace saving plans.” BlackRock, the world’s largest money manager with $6.4 trillion under management, currently has no marketing channel to sell funds directly to retail investors.
Financial Times
No more ‘window dressing’ The Basel Committee wants to make it harder for some international banks to “window-dress” their earnings by “flattering their accounts just before quarterly reporting periods. Supervisors have been concerned for some time that banks can make their balance sheets look better by reporting an overly optimistic leverage ratio … just before quarterly reporting dates,” making them look less risky. The problem is not an issue for American banks, which are required to report daily averages.
Bailing out Some Wall Street banks are bailing on the leveraged loan market, selling loans “at discounted prices and demanding that borrowers accept less advantageous terms, as they move to protect themselves from rapidly weakening demand in a previously hot corner of the credit market. The development reflects mounting concern from investors about the quality of loans used to finance private equity buyouts, following a series of warnings from central bankers this year.”
New York Times
End of the line? Does the growing government crackdown on the cybercurrency market “spell the demise of digital currencies and the end of initial coin offerings?” the Times’ White Collar Watch column asks. “For the naysayers of cryptocurrencies and initial coin offerings, this is the anticipated end of a speculative bubble. That does not necessarily mean that this type of investment will disappear, but greater government scrutiny will raise the costs for trading platforms and could effectively eliminate initial coin offerings if they must be registered with the S.E.C.”
Elsewhere
Error reduction A group of banks, including Goldman Sachs, JPMorgan Chase and Citigroup, have invested $17.5 million in AccessFintech, an Israel-based startup that helps financial firms better deal with business errors. The company’s technology “will help reduce the time and resources needed to resolve these issues by helping financial institutions communicate with each other. It will also reduce the risks associated with the errors.”
The San Francisco-based firm's Anchorage Digital Trusted Liquidity and Settlement network, better known as Atlas, will allow clients to settle a range of cryptocurrency transactions.
Consumer spending slowed and charge-offs rose during the first quarter, but Bread Financial said a pending late-fee rule may not be as devastating to its revenue as the Columbus, Ohio-based firm initially feared.
The FDIC board debated and ultimately withdrew two separate proposals to address asset managers' control over banks, but acting Comptroller of the Currency Michael Hsu said he couldn't support either and called for more research and debate about how asset managers' control over banks impacts safety and soundness.
The state's comptroller of public accounts is one of several notable non-depositories with access to the Fed's payments system, along with the Chicago Mercantile Exchange and the Tennessee Valley Authority. So why do they have accounts while some neobanks don't?
Mortgage rates rose 7 basis points this week, Freddie Mac said, and more increases are likely following a weaker than expected gross domestic product report.
