Receiving Wide Coverage ...

Good news — or not?: Total American household debt hit a new record of $12.7 trillion in the first quarter, surpassing its pre-crisis peak that occurred in 2008. But some observers are more concerned that the event "signals potential new risks to the economy" rather than showing that consumers have fully recovered from the Great Recession.

"The fear is that growing debt from student loans — as well as auto loans and credit cards — could put many Americans back in a hole, triggering a new wave of defaults, much like what happened in the mortgage meltdown a decade ago," the New York Times said.

However, the Financial Times notes that "the share of debts falling into arrears is now markedly lower than in the lead-up to the recession across a range of types of lending, with mortgage borrowers' finances proving particularly solid."

What does American Banker say? Don't cue the scary music — there is no reason for most lenders to panic.

Wall Street Journal

Not so bad: Treasury Secretary Steven Mnuchin is scheduled to testify before the Senate Banking Committee Thursday, at which time he may add more specifics to the Trump administration's still-vague plan to revamp the Glass-Steagall Act. On Wednesday, however, a Treasury spokeswoman said, "The administration does not support a break of banks from investment banks." Indeed, says the Journal, the administration's "often-stated goal to review the line between commercial and investment banking activities may be very different—and less onerous for big banks—than the industry fears."


Treasury Secretary Steven Mnuchin.
Treasury Secretary Steven Mnuchin. Bloomberg News

Deep dive: Wells Fargo is making greater use of information from polls and focus groups about its brand image among consumers to help guide its marketing. The Journal interviewed the bank's chief marketing officer, Jamie Moldafsky, about what Wells has been doing to repair its brand, such as using data more intensively to find out what its customers want and experimenting with new marketing channels.

Still bullish on banks: Bank stocks were among the hardest hit sectors in Wednesday's stock market sell-off, but the Journal's Heard on the Street column says "solid fundamentals and reasonable valuations mean the outlook for lenders is still favorable."

"There remains a solid bull case for banks, based on trends that were in place even before the November elections," it says, including a stronger economy, which will raise interest rates; large excess capital cushions, which should lead to higher dividends and stock buybacks; and "an emerging consensus, even among Obama-era officials, that financial regulation has become too cumbersome."

That was quick: Digital coins have become a new source of quick funding for tech startups. Gnosis sold out about $12.5 million of tokens in 12 minutes in April through an online "initial coin offering." Golem, a Polish firm that allows companies to rent computing power, raised $8.6 million in half an hour. "The tokens are more like a crowdfunding campaign than traditional venture-capital financing," the Journal reports. "No matter. Buyers are snapping them up." So far this month, companies have raised $27.6 million this way, compared to $3.5 million in all of May last year.

On alert: The Financial Industry Regulatory Authority is cracking down on potentially manipulative trading practices by brokers and looking to add more surveillance alerts by the end of this year.

Financial Times

Playing both sides: Goldman Sachs has moved into the top tier of underwriters of U.S. leveraged loans used to finance corporate acquisitions, an area historically dominated by the likes of JPMorgan Chase, Bank of America and Citigroup, the FT reports. Previously, Goldman typically represented selling companies, but it is now looking to play both sides. The bank ranks third in leveraged loans so far this year, up from eighth last year, behind only B of A and JPMorgan.

Meltdown in the cold: The FT looks at Home Capital Group, Canada's biggest nonbank mortgage lender, whose "fight for survival is sparking fears of a broader meltdown in the country's super-heated property market."

Quotable

"This is not a marker we should be super-excited to get back to. In the abstract, more debt signals optimism. But in reality, families are using debt as a mechanism to pay for things their incomes don't support." — Heather Boushey, executive director and chief economist at the Washington Center for Equitable Growth.

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