Wall Street Journal
AML clarification: U.S. banking regulators issued a "Fact Sheet" that tries to clarify anti-money-laundering rules that some critics say are forcing banks to cut off access to innocent countries, businesses and individuals for fear of being penalized. The report is intended to "dispel certain myths" about the rules, which have caused some banks to refrain from serving customers in island nations, emerging-market countries and those in drug-ridden areas, such as the U.S. border with Mexico. In a blog post accompanying the report, senior Treasury officials said regulators resolve "about 95 percent" of compliance failures without penalties and that banks are not required to vet the customers of their foreign bank clients.
Big writeoffs: China's four largest banks wrote off nearly $20 billion of bad loans in the first half, up 44% from the year earlier period, as they try to clean up their balance sheets even as new loan demand shrinks in the face of weaker economic growth. The International Monetary Fund says China's nonperforming-loan ratio is 15%, nearly 10 times the official government figure of 1.75%. Second-quarter profit at Chinese banks rose 3.2%, half the pace of the previous quarter.
Stop the hyperbole!: Some observers are calling for a cease fire in the growing number of metaphors and overstatements that have been used to describe global central bank monetary policies since the financial crisis. "Sink-throwing has joined sledgehammers, bullets, firepower and dry powder among the metaphors proliferating like kudzu around central-bank policy," the Journal reports, which has some people worried about the inaccuracies they spread. "Here's the problem I have with metaphors," one German banker said. "Sometimes you don't give a true picture of what's happening. I'm worried that it's reinforcing a view that central banks can do something about the situation we are facing."
Financial Times
No middleman: Goldman Sachs is rolling out a program that lets investors trade U.S. corporate bonds directly without having to go through the investment bank. The "Goldman Sachs Algorithm," or GSA, as it is called, provides buy and sell prices on high-grade corporate bonds that are "dynamic and respond to other trades and market conditions," according to the FT. Orders are executed immediately. The service caters to odd lots, or trades of less than $1 million, not large institutional-type orders.
Leaving: David Azema, the Bank of America executive who handled the French government's holdings in private companies, is leaving the bank to join Perella Weinberg Partners. Azema, whose title at BofA is chairman of global infrastructure, is leaving in November to join Perella's London operation. His hiring follows the retirement last year of Bernard Gault, a key French partner at the boutique bank.
Brain power: UBS is using a group of "psychologists, data scientists, shipments specialists and pricing experts" to help its research team come up with better investment recommendations for clients. Juan-Luis Perez, the bank's global head of research in London, said the intention of the effort is to help researchers "ask better questions." Psychologists, for example, help bank analysts "think about their topics differently, and pinpoint more precise and insightful research questions." Once the questions have been selected, UBS uses an "Evidence Lab" to answer them. The bank says the changes have more than doubled readership of its research reports the past two years.
