Morning Scan: Banks May Rue Tax Cuts; Looking for Space

Receiving Wide Coverage ...

Suspended: Prudential Financial said it suspended sales of its MyTerm life insurance policies through Wells Fargo following allegations that Wells employees wrote policies without customers' permission and withdrew money from their bank accounts to pay the premiums. Many of the victims did not speak English, according to a suit filed by three former Prudential employees, who claim the company tried to hush up the scandal. Prudential said Monday it would reimburse any customers who said they were charged for policies they did not ask for. California and New Jersey insurance investigators are looking into the matter. Wall Street Journal, Financial Times, New York Times, American Banker

It's official: As expected, President-elect Donald Trump formally appointed Goldman Sachs president and COO Gary Cohn as director of the National Economic Council, a position that Trump said would make Cohn his "top economic adviser." Wall Street Journal, Financial Times, New York Times

Wall Street Journal

Thriving: Indian mobile-payment companies say the government's recent move to take most of the country's paper money out of circulation has been a boon to their business. "If we continue at this pace, within a month or two we will have made more progress than since our inception" in 2009, said MobiKwik founder Bipin Preet Singh. "The government is creating large-scale awareness and basically doing advertising for us."

Not good enough: Disgraced former baseball star Jose Canseco, has eyes on becoming chairman of the Federal Reserve. Canseco tweeted to President-elect Trump, "give me control of the Fed and we will make the economy great again. Dow at 40k in 4 Years." But as the Journal's Heard on the Street column notes, promising to double the market "would be more like a bloop single compared with past Fed chairs." For example, the Dow more than tripled under Paul Volcker in the 1970s and 1980s and nearly quadrupled under his successor, Alan Greenspan.

Space race: With many leases set to expire, several big financial services firms are "cranking up searches for office space" in New York City. "Real-estate executives said at least some of the activity, anticipated next year, is being inspired by a sense that the financial-services sector will expand if Mr. Trump moves to cut corporate taxes and trim business regulation as he has said," the Journal reports. "At the same time, banks are keeping a keen eye on expenses, looking to put more people into less space and opting for cheaper neighborhoods and cities for less essential functions."

Financial Times

Not so fast: While banks should be thrilled about the prospect of a big corporate business tax cut proposed by President-elect Trump, the FT's Lex column says certain banks may find it less than they hoped. For one thing, some banks – it uses Citigroup as an example – may lose part of the value of the huge tax-loss carryforwards they've built up since the financial crisis. A lower tax rate may also affect how much regulatory capital they have to set aside.

New York Times

Wrong target?: Andrew Ross Sorkin, the founder and editor-at-large of the Times's DealBook section, calls out Sen. Elizabeth Warren for accusing hedge fund manager Whitney Tilson of being "thrilled by Donald Trump's economic team of Wall Street insiders." It turns out Tilson, who runs Kase Capital, not only "happens to be one of the few financial executives who publicly fought Mr. Trump's election and supported Hillary Clinton," but he's also donated money to the Massachusetts senator. "Ms. Warren appears to suffering from the same affliction that Mr. Trump's critics accuse of him: a knee-jerk, fact-free reaction to something she had read in the news," Sorkin writes.

Quotable ...

"We stand behind the MyTerm product but have decided to suspend sales of that product through Wells Fargo's retail banking franchise until we have all the facts about whether it is being distributed properly and in the best interest of customers." – Steve Pelletier, chief operating officer of Prudential's U.S. businesses