Wall Street Journal
Another shakeup?: The paper reports Jeffrey Urwin, Deutsche Bank's corporate and investment banking chief, is in talks to leave that role, and he may be replaced by finance chief Marcus Schenck. "If the changes occur, they would mark the second major shake-up in the bank's most senior management ranks since John Cryan became chief executive in 2015," the Journal noted. The discussions come at a time when the biggest German bank "has been battling a costly series of legal matters and faced investor uncertainty over its strategy and capital position."
Bitcoin frenzy: Some analysts are worried that Securities and Exchange Commission approval of a bitcoin exchange-traded fund next month might set off a speculative rush into the digital currency. "An easily accessed ETF that tracks the value of bitcoin could cause money to flood into the fledgling bitcoin market," the Journal reports. "Indeed, what some see as a chance for average investors to participate in one of the great financial innovations of recent years could set off a trading frenzy in an already wild market."
"My concern is that the launch of an ETF could lead to irrational exuberance if the price of bitcoin appreciates dramatically," Christopher Burniske, a blockchain-products manager at ARK Investment Management, said.
Refi boom: American companies refinanced $100 billion of loans in January, saving over $1 billion in annual interest costs in the process. That was the largest monthly refi total in at least a decade, according to S&P Global. The refi wave was "propelled by outsize investor demand for bank loans," the Journal said. "The red-hot loan market has enabled many corporations to demand that lenders cut rates or face losing the business to a rival, a sign of how easy financing is enabling large firms to get advantageous terms in debt markets."
Open the vaults: We've written previously in this space about how the largest American banks are likely overcapitalized and may return some of that money to their investors in the form of increased dividends and share buybacks. At a conference in Miami Beach Tuesday, bank executives suggested they are in fact ready to do so.
According to Morgan Stanley, the 18 biggest banks have more than $127 billion of excess equity capital. Citigroup has the most, at more than $29 billion, followed by Bank of America with $21 billion and JPMorgan Chase with nearly $20 billion.
Let's get digital: BNP Paribas, France's biggest bank, said it is planning to invest €3 billion, an increase of 50%, in digital technology over the next three years in order to "transform its business." Jean-Laurent Bonnafé, the bank's CEO, told the FT, "More and more of our clients want to do operations online rather than face-to-face."
Gouging?: Think overdraft fees are expensive in the U.S.? They're even worse in the U.K. A consumer group called Which? found that fees on overdrafts can be almost eight times more costly than payday loans. Some bank customers who borrowed £100 for 30 days through an unarranged overdraft paid £180 in fees, the group found, compared to £24 that would have been charged on a payday loan. As a result, a Labour MP wants a cap put on bank monthly charges. "Decisive action was taken to cap the sky-high charges imposed by payday lenders and the same must now be done to limit the charges imposed by the high street banks," the legislator said.
New York Times
Fannie-Freddie dilemma: Any discussion about the future of Fannie Mae and Freddie Mac "requires a hard acknowledgment that the government is committed to supporting the mortgage market," according to Steven Davidoff Solomon, a law professor at the University of California-Berkeley.
"The government is not willing to fully nationalize Fannie and Freddie because it is unwilling to acknowledge or accept the truth that the current mortgage market depends on government support," he writes in the Deal Professor column. "Privatization of the G.S.E.s raises the same problems. Fannie and Freddie could be recapitalized and set free in the private markets with strict capital controls and restrictions, turning them into quasi-utilities, but they would still have the government's implicit guarantee."
"Probably left to our own devices, we wouldn't hold as much capital as we're holding." — Goldman Sachs chairman and chief executive Lloyd Blankfein