Kelly Coffey leaves JPM; real estate debt funds grow

Receiving Wide Coverage ...

Forex probe
American Express said it has received subpoenas from the Justice Department’s civil and criminal divisions, which are investigating how its foreign exchange unit priced currency conversions on its credit cards. The Federal Reserve, the Bureau of Consumer Financial Protection and the Federal Deposit Insurance Corp. have also made inquiries, although the company said it doesn’t believe the matter will affect its operations or financial results. Wall Street Journal, Financial Times, American Banker

One up, one down
Barclays said third quarter earnings jumped more than 70% to £1 billion ($1.3 billion) from £583 million in the year-earlier period, bolstered by improved investment banking profits. “There’s been a comment that European investment banks can’t compete with U.S. investment banks. I just point out that for four quarters in a row we have gained market share,” CEO Jes Staley said. Wall Street Journal, Financial Times

The news wasn’t good at Deutsche Bank, where third quarter profit dropped 65% to €229 million ($263 million) as net revenue fell 9% to €6.2 billion. Still, CEO Christian Sewing said Germany’s largest bank is “on track” to report a profit for the full year. Wall Street Journal, Financial Times

Wall Street Journal

Counting the unbanked
The percentage of “unbanked” U.S. households fell to 6.5% in 2017, down from 7.0% in 2015, the lowest level since the FDIC began its biennial survey in 2009. The FDIC said 8.4 million households, or about 14.1 million adults, don’t have bank accounts.

That's AML, folks
Capital One paid a $100 million fine to the Office of the Comptroller of the Currency over regulatory deficiencies in its anti-money-laundering program. The OCC said the bank “had several weaknesses in its compliance programs and risk assessment and failed to file some suspicious activity reports flagging potentially problematic transactions.”

The paper details how Howard Wilkinson, a British trader at Danske Bank’s Estonian branch, helped blow the lid off its $230 billion money laundering scandal. “The revelations have ignited soul-searching in Europe about the cost incurred by some of its banks to survive the global financial crisis, especially how they welcomed flows of thinly monitored money from countries with weak rule of law. Regulators increasingly wonder whether their defenses against criminal money are broken, given how so much moved through the brand-name bank of a Scandinavian nation.”

Just in time, perhaps, a group of former Treasury Department officials have launched a firm that helps companies and banks with sanctions-related risk. Called Kharon, the firm “hopes to provide major banks, multinational companies, law firms and others with information they believe was previously unattainable when conducting sanctions risk-related management, combining a proprietary technology platform and their collective experience investigating the networks of actors who surround sanctions targets.”

Mo-money
Real estate debt funds at private equity firms have amassed a record $57 billion, “the latest sign that new money is piling up to lend for real estate.” But “this wave of new capital is heightening concerns that lending standards may slip as firms compete to put new money to work, and that some of the weaker borrowers may not be able to repay their loans.”

“Investment firms used to be smaller players in the market,” the paper reports. “But when big banks cut back their real-estate lending after the financial crisis and housing market bust, debt funds and other nonbank lenders stepped into the void.”

Financial Times

Opportunity knocks
Kelly Coffey, a regular on American Banker's most powerful women in banking and “considered one of the most senior women on Wall Street,” has resigned as head of JPMorgan Private Bank "to pursue a new opportunity outside of the firm," the paper says. She had been with the bank for 25 years, the last five in her current role.

Blockchain breakthrough
Setl, a U.K. fintech company, has received a license from French regulators to connect its blockchain-based system to the eurozone’s depository platform. “The approval to run a central securities depository is a further coup for proponents of blockchain technology, who argue it can be harnessed to improve slow and inefficient back-office settlement and cut the amount of collateral held up in global payment systems. Critics argue it is little better than some existing technologies on the market.”

New York Times

Goldman SEC probe
The Securities and Exchange Commission is looking into the 2015 departure of former Goldman Sachs partner James C. Katzman. The former senior investment banker “called Goldman’s whistle-blower hotline in 2014 to complain about a number of practices inside the Wall Street investment bank,” including allegations that “his colleagues had sought to obtain confidential client information and that the bank inappropriately tried to hire a customer’s child.” But he left the firm before his claims were scrutinized.

Quotable

“To me the Fed is the biggest risk, because I think interest rates are being raised too quickly.” — President Trump, renewing his criticism of the Federal Reserve's rate hiking.