Wall Street Journal
Sen. Elizabeth Warren, D-Mass., isn't running for president (as of yet) but her presence is certainly being felt in the C-suites of the largest banks. Seven executives from JPMorgan Chase, Goldman Sachs and other banks met at Bank of America Tower in New York on March 31, or dialed into a conference call, to discuss how to counter the campaign-trail argument that banks are bad, according to unnamed sources and emails obtained by the Wall Street Journal. Their effort won't result in a new ad campaign or lobbying program. The group discussed which of the messages on the campaign trail are most troubling for banks, and how banks could emphasize their positive role. Yes, other candidates, including Vermont Sen. Bernie Sanders, have criticized banks, and former Florida Gov. Jeb Bush has said the biggest banks are still probably too risky. However, "more worrying still for Wall Street is the pressure being exerted on [Hillary] Clinton by Warren and the many progressives who continue to press the Massachusetts senator to join the race." Goldman executive vice president John Rogers and Bank of America's head of communications and public policy, James Mahoney, organized the meeting. Other banks in attendance were Citigroup, Morgan Stanley, Bank of New York Mellon and State Street. Wells Fargo's invited executive was on vacation.
Fed data shows banks are shifting to loans from Treasuries. Total bank holdings of U.S. Treasuries declined in February and March, the first drop since September 2013. The rate of seasonally adjusted loan growth at the 25 largest banks is at its highest level in six years. The shifts should mean better net interest margins for banks.
Nasdaq is testing the use of blockchain technology to handle the sales and transfers of shares in pre-IPO trading of private companies.
A neuroscientist blames the colossal amounts of personal debt held by Americans to the short-term thrill provided by making a large purchase. Total indebtedness of U.S. households soared to $11.8 trillion at the end of 2014, according to the Federal Reserve. Easy credit is an enabler to the special tingling that you get when making a large purchase.
Financial Times
U.S. corporations clearly prefer to hoard cash. Five companies Apple, Microsoft, Google, Pfizer and Cisco are sitting on a total of $439 billion in cash. The 50 largest U.S. companies are holding a combined $1.1 trillion in cash. The majority of the cash is being held overseas.
Lending Club, Prosper and other alternative lenders may be providing great returns to their investors now, but just wait til a downturn hits.
New York Times
Investing in high-tech startups has picked up the pace. Startups like Slack, Uber and Zenefits have raised money at heretofore unseen speed. No longer do nascent firms wait a year or two between financing rounds. Now it's more like a few months. They're raising the money because they can, even if they don't necessarily need it. The money is coming from hedge funds, strategic investors and traditional venture capital firms.
Dodd-Frank is working, Paul Krugman writes in a column. The Consumer Financial Protection Bureau is having a major impact on reeling in predatory-lending practices. Large financial institutions that are filed under the heading too big to fail are being forced to put up more capital; as a result, shadow banking is in retreat. But the forces of Wall Street have conspired to repeal Dodd-Frank.
The Federal Reserve Bank of New York should not lose its permanent place on the Federal Open Market Committee, writes David Zaring, a professor at the University of Pennsylvania's Wharton School. The proposal to strip the New York Fed of its permanent vote would be cheered by some liberals, community bankers and libertarians. But it wouldn't change monetary policy much in the short term.
Elsewhere ...
Charlotte Observer: In the quest to reinvent the bank branch, the role of the teller has been drastically redefined and downsized, if not outright eliminated. Maybe banks need to tap the brakes on that strategy. Some shareholders at last week's Bank of America annual meeting took the microphone to complain about the lack of tellers at some branches. "I went in one of our busiest branches. They had one teller on the inside, one teller on the drive-in, and the line was out of the door," Robert Henry, a retired B of A employee from Greensboro, N.C., told CEO Brian Moynihan.
