HSBC’s plan draws a yawn; Offering credit in real-time

Receiving Wide Coverage ...

On the mend: Lawrence Kudlow, President Trump’s top economic adviser, suffered a “very mild” heart attack on Monday in Washington. The White House said he is in good condition and expected to make a “full and speedy recovery.” Wall Street Journal, Financial Times, New York Times, Washington Post

Nothing to see here: HSBC CEO John Flint’s announcement Monday that the bank will be investing $15 billion to $17 billion in growth and technology businesses was “somewhat underwhelming,” the Wall Street Journal’s Heard on the Street column comments. “When you’re already one of the world’s biggest banks it is hard to find enough new business to add up to something that makes a difference.”

The Financial Times says basically the same thing about the “supertanker of British banking,” which has $2.5 trillion of assets, 230,000 employees and 3,900 offices in 67 countries. “Anyone expecting Mr. Flint to unveil radical changes was kidding themselves.”

Not on our cards: Wells Fargo has joined JPMorgan Chase, Bank of America and Capital One in prohibiting its customers from using their credit cards to buy bitcoin. The bank said its decision is “in line with the overall industry.”

Bitcoin and other cryptocurrencies dropped sharply over the weekend after a small South Korean exchange said it was hit with a “cyberintrusion,” in which several alternative versions of bitcoin appeared to have been stolen.

Wall Street Journal

Real-time credit: Synchrony Financial, one of the largest issuers of private-label credit cards, is using analytics to enable its retail partners to grant credit to customers in real time at the store. For example, the company helped Walmart build mobile technology “to let customers apply for a credit card from within the retailer’s shopping app. If approved, customers can use the new account immediately to pay for items in their virtual cart. In a separate project, Synchrony’s innovation team is developing a system to let shoppers at physical supermarkets use self-checkout terminals to apply for a credit card as they scan items.”

“Our goal is to help partners drive sales because that’s good for us, too,” said Carol Juel, Synchrony’s chief information officer.

Tightening up: French regulators are tightening banks’ capital requirements “to mitigate the risks of a future credit crunch, an early sign of tighter borrowing conditions emerging across Europe.” Both French and foreign banks operating in the country will be required to hold capital equal to 0.25% of their risk-weighted French assets.

“The purpose of the buffers is to force banks to accumulate additional capital while the economy is strong, making them more resistant during subsequent times of stress,” the paper says. “The move means France is aiming to reduce risks in the banking system while the European Central Bank continues to spur lending by pumping in liquidity with asset purchases and subzero interest rates.”

Financial Times

Welcome to the machine: Citigroup’s investment bank says it will shed up to half of its 20,000 technology and operations workers over the next five years as machines replace humans. The forecast, by Jamie Forese, Citi’s president and head of its institutional clients group, “was the starkest” among senior investment bankers interviewed by the paper. He said operational positions, which make up about 40% of the investment bank’s workers, were “most fertile for machine processing.”

“If replicated across the industry, the potential job losses would represent a steeper rate of cuts than in 2007-2017, when almost 60,000 jobs were cut from eight of the world’s top 10 investment banks,” the paper says.

Seeking justice: The head of JPMorgan Chase’s Mexico operations and a former managing director of the bank were served with arrest warrants by a judge in Acapulco for alleged fraud involving a 2007 loan to a Mexican real estate developer. The bank responded the “accusations are baseless. We are dismayed and are working hard with our lawyers to respond to this suit and to ensure justice is done.”

Elsewhere

Cash at a bank. Who knew?: A parliamentary committee in Sweden wants to require the country’s biggest banks to handle customers’ cash transactions. “The move is a response to Sweden’s rapid transformation as it becomes one of the most cashless societies in the world. That’s led to concerns that some people are finding it increasingly difficult to cope without access to mobile phones or bank cards. There are also fears around what would happen if the digital payments systems suddenly crashed.”

Quotable

“I don’t think Dodd-Frank is changing a great deal, just to put a pin in it.” — Securities and Exchange Commission Chairman Jay Clayton, who said the vast majority of the law will remain in place.