Receiving Wide Coverage
More Regulation: The Federal Reserve plans to revive a 2011 proposal Friday that’s been sitting on the back burner after the plan received criticism from Wall Street. The measure aims to limit credit exposure of the largest U.S. banks to other financial firms and is based on interconnectedness instead of size. The original proposal, an outcome of Dodd-Frank, would have restricted credit exposure to 10% of capital. Regulators have focused their attention largely on other high-profile rules tied to capital, liquidity and other risk-taking controls, but now, financial institutions are watching to see how lenient regulators will be in defining and calculating credit exposure. They will have the opportunity to comment on the proposal before the Fed makes its final decision later this year. Wall Street Journal, Bloomberg
Wall Street Journal
Banks are experimenting with location-based antifraud services by tracking customers’ cell phones. U.S. Bancorp has conducted a number of tests that showed cell phone tracking could help identify fraudulent purchases. Discover and USAA have each said they’re interested in offering the service to their cardholders, the Journal reports, but have not yet indicated a timeline for the plan. Payments giants Visa and Mastercard already offer the service to card issuers – Visa says it can reduce unnecessary transaction declines by up to 30% – but banks have been more wary of it for two main reasons: the boundaries of “tracking” are a gray area, and many banks don’t even know their customers' cell phone numbers to be able to use the technology. Further, it’s unclear whether banks would retain data from the service, for how long, and whether they would sell them to third parties.
New York Times
Goldman Sachs’ millennial employees just aren’t motivated as much by money as they used to be. Increased pay, more time off and less menial work have not been enough incentive for young analysts to stay in their once coveted jobs, the Times says, as they seek meaning and purpose in their work. On Thursday, Goldman announced it expanded its philanthropic fund and launched the Analyst Impact Fund program, a competition amongst employees with winners receiving grants of up to $100,000 for a charity of their choosing.
Former Barclays CEO Bob Diamond is eying a big slice of the Barclays Africa empire he helped build before he was ousted in 2012 over the Libor rigging scandal. The British banking giant announced earlier this week that it would sell its 62.3% interest. Diamond, who also created Atlas Mara as an investment vehicle for African banks after his exit from Barclays, has been in preliminary talks with investors about a potential takeover bid for the Barclays assets. It’s a good opportunity for a comeback, if Atlas Mara can raise the money for the purchase. Its market cap is a mere $325 million compared to Barclays’ $2.1 billion. With few strategic buyers for the 62.3%, and an expected block by regulators against a merger with a local rival, Barclays might have to offload its stake to institutional investors.
Bloomberg: Goldman Sachs and Bank of America are planning some job cuts in their trading divisions as cost-trimming measures after the market proved volatile at the beginning of the year. Goldman Sachs, which usually eliminates its bottom 5% performers at this time, plans to make even deeper cuts than that, though the bank said it wouldn’t go beyond 10%. B of A, which has sought to lower costs for months now and eliminated 200 trading and investment employees in September, will let 150 more go next week.