Receiving Wide Coverage…
U.K. to Sell $3B Stake in Lloyds: The British government is planning to sell its stake in Lloyds Banking Group as it prepares to exit its ownership of the lender next spring. Proceeds of the sale will be used to pay down national debt, the Treasury has said. About $3 billion of shares are being offered to the general public at a 5% discount, and there will likely be a sale to institutional investors to allow the Treasury to completely exit. The government owned more than 40% of Lloyds after it bailed it out for roughly $25.7 billion during the financial crisis. It has been divesting its holdings since 2013 and last month reduced it to just 12%. Wall Street Journal, New York Times.
Wall Street Journal
Lawmakers are looking to Fed member banks to finance highway infrastructure, the Journal reports. A proposal already passed by the Senate would cut dividends received by private bank Fed shareholders with more than $1 billion in assets, from 6% to 1.5%. Last year, member banks' payouts totaled almost $1.7 billion – that includes $310 million to Bank of America and $250 million to Citigroup. The cut could save $17 billion over 10 years that would be put towards highway construction. The proposal has been met with concerns by Janet Yellen, the OCC and the ABA. The House has yet to act on it, but if it doesn't soon, funding for highways could break off by next summer.
As solutions to climate change becoming increasingly challenging, Citigroup is cutting financing ties to coal mining companies, the paper reports. Coal mining accounts for 43% of energy-related carbon dioxide emissions, according to research Citi published in August. The bank has scaled back its credit exposure to these companies since 2011 and says it is committed to continuing the trend through. The new policy reflects that decline, as well as Citi's “commitment to managing environmental and social risks and opportunities associated with client transactions,” it said. Bank of America made the same pledge earlier this year.
The International Monetary Fund and G20 leading nations should strive to improve the financial system by building the resilienceof its members. Bankers can teach economists a thing or two about that why it's important to build resilience into the system, the German finance ministry's chief economist writes. Efforts to repair the economy haven't been as convincing as efforts to repair the banking system, and that banks seem more robust than they were in the days of Lehman Brothers and before is evidence of the resiliency behind increased capital and regulatory reforms.
New York Times
Cameron and Tyler Winklevoss are set to launch their Bitcoin exchange, Gemini Trust Company, later this week. The New York State Department of Financial Services has given them the green light to operate under a limited purpose trust charter – the third it has issues this year. Gemini is marketed as a platform for institutional investors to buy and sell Bitcoin, holding customer funds in federally insured bank accounts. The Winklevosses revealed their plans more than a year ago but had been committed to remining as compliant as possible under New York Bank Law. You can check out American Banker's take on the regulatory aspect, too.