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Wall Street Journal
Citigroup's reshuffling of executives announced on Monday included the appointment of a clear number two executive behind CEO Michael Corbat. Citi named Jamie Forese its sole president, making him the likely successor to Corbat should he step down, unnamed sources told the paper. Forese's promotion was not mentioned in a letter Corbat sent to Citi employees on Monday. Forese is currently head of Citi's investment bank and had previously been co-president with Manuel Medina-Mora, who is retiring. Forese is known within Citi as "likable and willing to speak his mind." He's also well-paid; Forese's 2014 compensation of $13.5 million was slightly more than Corbat's pay.
With subzero interest rates, some European banks owe money to borrowers. The unusual interest rate situation has created strange situations. Spain's Bankinter has paid interest on mortgages by deducting the amount from principal owed by the borrower. Other banks have had to rebuild computer software, update legal documents and restructure spreadsheets in order to handle negative interest rates.
Wells Fargo is slowly becoming a global bank. The San Francisco bank is now in 36 countries with a total of 76 foreign offices, and international businesses comprise about 2% of its total revenue. That makes it less-global than the likes of JPMorgan Chase or Citigroup, but it's still a wider global presence than Wells Fargo once had. Some of the locations where Wells Fargo has recently opened offices include: Paris, Frankfurt, Dubai, Toronto, Bermuda and Singapore.
General Electric CEO Jeff Immelt is so eager to exit GE Capital that he's willing to forgo the extensive tax breaks that the unit had delivered for the entire company. The size of the tax breaks that GE will lose is somewhat staggering. GE said it will now have a $6 billion tax bill, as a result of bringing back to the U.S. profits that it had booked overseas via GE Capital.
New York Times
Banking regulators need to be creative to keep open the flow of remittance funds from the U.S. to Somalia, Rep. Keith Ellison, D-Minn., wrote in an op-ed column. Remittances account for about $215 million yearly to Somalia, more than the U.S. aid package of $200 million. And many Somalian-Americans send money back home to provide essential funds for schools and healthcare. But with Merchants Bank of California and other institutions that handle Somali remittances getting out of the business, those funds will be cut off. Ellison suggested that, perhaps, the New York Fed could use its own wire service to process transactions to Somalia and East Africa. Regulators have otherwise been caught flat-footed on the Somalia remittance issue.
The CEO of a Seattle payments company is cutting his salary from about $1 million to $70,000, in order to help fund raises for all employees to a minimum of $70,000. Gravity Payments CEO Dan Price said his decision was based in part on research by a Nobel Prize-winning psychologist into the nature of happiness, as well as the growing disparity between the pay of CEOs and frontline workers.
Laurence Fink, CEO of BlackRock, has sent a letter to the CEOs of the 500 largest U.S. companies urging them to slow the pace of stock-buybacks and dividend payments. Fink wants to discourage the "gambling" mentality of activist shareholders and investors, and encourage long-term value creation. Fink's words carry weight, as BlackRock is the world's largest institutional investor with more than $4 trillion of assets under management.
Denver Post: Other reasons besides compliance costs may have been at play in the decision by $163 million-asset MBank in Gresham, Ore., to exit the marijuana business. Regulators forced MBank to close the accounts of marijuana businesses after they audited the bank's records "over an extended period, eventually downgrading the institution's rating," unnamed sources told the Denver Post. MBank, which had been subject to an earlier enforcement action, had seen the length of its regulatory exams increase from two weeks to six weeks. Jef Baker, chief executive, declined to comment to the Post about the regulatory exams. MBank, which has five offices in Oregon, withdrew its plan two months ago to offer banking services to pot businesses in Colorado.
Buffalo News: The owner of an Amherst, N.Y., call center has sued an ex-M&T Bank loan officer and the bank itself for illegally using collateral secured by his business to make fraudulent loans. Jeffrey Drilling, founder of the company Client Server Direct, sued Mick Whipple last month, as well as M&T Bank and two other executives, asking for $25 million. M&T fired Whipple last year after the FBI began investigating allegations that he arranged millions of dollars in loans to borrowers who did not qualify. Whipple's attorney has said the only victim of his client's actions was M&T itself, but Drilling said his credit rating was hurt by Whipple's actions, caused major customers to stop doing business with him, and forced him to fire all his employees. An M&T spokesman said the bank has worked with customers who did business with Whipple "to ensure that there were no impacts to those customers whatsoever, personally or financially."