Breaking News This Morning ...
The New York Department of Financial Services is in for a major shake-up. The department’s interim head Anthony Albanese and its spokesman Matthew Anderson have told the office of New York Governor Andrew Cuomo that they will step down. The Wall Street Journal reports their decision to leave the agency comes at a time when the NYDFS has butted heads with the governor’s office more than in the past. Reportedly, Cuomo has attempted to exercise more authority over the regulator in the wake of former superintendent Benjamin Lawsky’s exit.
Receiving Wide Coverage ...
Goldman Sachs to Pay Up: The New York Department of Financial Services is close to finalizing an agreement with Goldman Sachs Group to resolve issues tied to the alleged leaks of information from the New York Fed. The state banking regulator is eying a $50 million fine for the bank, the Wall Street Journal reports, and is currently working on finalizing the language of the agreement. The agreement could also place a three-year ban on Goldman performing regulatory consulting work in the state of New York, the Journal notes, citing an anonymous source.
Goldman Sachs banker Rohit Bansal, who previously worked at the New York Fed, allegedly received confidential government information from New York Fed employee Jason Gross, according to the New York Times, which first reported the leak. Bansal and his supervisor Joseph Jiampietro were both fired, as was Gross, who also plead guilty Monday to a misdemeanor in a deal with prosecutors. The case points to the dangers of the revolving door between government and banking positions, showing how expertise or connections from a public job could come back to haunt you in the private sector.
Wall Street Journal
J.P. Morgan Chase has announced plans to retool its Chase Pay payment product to compete more directly with Apple Pay. As part of the overhaul, the bank will modify Chase Pay with retailer input to make it easier for cardholders to make purchases through retailers’ websites, mobile apps and stores. In particular, retailers will begin to display the Chase Pay logo to signal it as a payment option much like Apple Pay or PayPal. Retailers involved in the overhaul include Wal-Mart, Target and Best Buy.
John Thain’s exit from CIT Group should serve as a sign to other major banks, the paper argues. Thain announced last week he would leave the bank, after making CIT the first intentional systemically important financial institution by crossing the $50 billion-asset threshold with the OneWest Bank deal. Investors reacted favorably to the announcement as it signaled an end to the bank’s quest to grow larger. The bank also announced plans to shed some foreign operations and its commercial air business.
Big changes are coming to Deutsche Bank courtesy of its new chief, John Cryan. The bank plans to ditch its old IT system, which he deemed an utter mess. In particular, the paper says, Cryan took issue with the fact that individual teams and traders can operate on their own platforms, which complicates trades and other transactions. Cryan also has plans to slash tens of thousands of jobs. The Briton also has signaled moves to strengthen the bank’s balance sheet and cut assets.
Venezuela’s central bank has sued an Alabama-based exchange rate website accusing it of cyberterrorism. The South American country’s suit against dolartoday.com alleges the site conspired to weaken the central bank. But observers noted the website was likely just a scapegoat for the country’s own mismanagement amidst its economic turmoil. In particular, the paper cites an IMF forecast that predicts a 10% decline in Venezuela’s economy, making it the world’s worst even amongst the likes of war-torn Ukraine and Syria.
New York Times
Former Deutsche Bank chief Josef Ackermann is working to help fix a bank — and a country — that he undermined. The paper reports Ackermann has become chairman of the Bank of Cyprus, a small bank on the global scale that plays a major role in its country’s economy. Ackermann in 2013 as chairman of the International Institute of Finance orchestrated an agreement for Greek debt relief that led Cypriot banks to seize deposits to cover losses on Greek bonds they held. Since the incident sent the country into a recession, Ackermann and other financial elites have taken to the Mediterranean island country to help execute relief efforts.
Pittsburgh Post-Gazette: The Pennsylvania General Assembly took out its own sort of payday loan. The state legislature has run out of funds as lawmakers stand at an impasse on a new budget. Consequently, the politicians have turned to the banks. The state Senate has borrowed $9 million from PNC Bank to cover salaries for both Republican and Democratic senators and staff. House Republicans meanwhile took out a $30 million line of credit and drew down $5 million of it from a group of five banks led by First National Bank of Pennsylvania. House Democrats' staff have been paid by the state Treasury.