Receiving Wide Coverage ...
Wall Street's Pay Crackdown: Regulators have put forth a proposal to revamp how bankers are paid, a long awaited response following the 2008 financial crisis. Caught firmly in the crosshairs of the newly proposed rules are bonuses. The highest-paid employees at banks would need to wait at least four years to receive portions of their annual pay, and individuals who make risky choices that lead to losses could be forced to return their bonuses. Executives, in fact, could be liable for losses for as long as seven years. Importantly, the rules don't only apply to executives, but a wide range of employees at large banks as well as investment advisers, brokers and credit union employees. As of now though, some folks in the industry appear to be spared due to how their assets are classified, including employees at hedge funds and mutual-fund companies. In all, tens of thousands of people in the financial services industry would be subjected to conditions of the new rules, with those working for the largest institutions facing the toughest requirements. Some on Wall Street believe the rules will lead to more top employees receiving their pay in stock and salary rather than in bonuses. Some even think the rules could lead to raises, given the deferred bonuses. Nevertheless, for certain employees nothing compares to bonuses – and that has some folks on Wall Street concerned that the new rules could give a leg up to other competitors for top talent such as Silicon Valley.
Wall Street Journal
Speaking of proposals from regulators, the Consumer Financial Protection Bureau appears set to put forth a final plan to limit arbitration clauses on May 5. The proposal is designed to expand consumers' ability to sue banks and other financial institutions. The final proposal comes on the heels of an outline the CFPB put forth in October that was met with major criticism from financial companies. The plan at that time didn't outright ban arbitration, but did disallow companies from including arbitration clauses to block class-action suits. These clauses currently are common for many financial products such as credit cards, payday loans and private student loans.
But before you get ahead of yourself, everything isn't going the CFPB's way. A federal judge ruled that the consumer watchdog agency had gone too far when it tried to proceed with an investigation of the Accrediting Council for Independent Colleges and Schools, a group that accredits for-profit schools. Some of those schools are being investigated for violating fair lending practices.
Small credit unions have scored a big win as the National Credit Union Administration has decided to back off from a proposal that required the institutions to operate out of commercial locations. The workplace guidelines were made with the safety of NCUA examiners in mind, some of whom had complained about the conditions they faced when going to home-based credit unions. But the rule was a major threat to the 85 home-based credit unions across the country, which are generally very tiny with assets that pale in comparison to even a single bank branch.
And in another tale of financial institutions scoring wins against regulators, banks have reason to celebrate as the Basel Committee on Banking Supervision dropped plans to require them to hold more capital due to the risk posed by interest rates. The committee instead has left the determination regarding this capital to each country's banking regulator. The paper notes that the Basel Committee had previously calculated that roughly 15% of capital at a bank should be asset aside for interest rate risk.
The US-led crackdown on tax evasion has created trouble for Swiss banks. With a Swiss bank account no longer existing as the safe havens they once were, demand for their services has collapsed just as regulations have ramped up. Some Swiss banks received mentions in the Panama Papers, and others have been red-flagged by Swiss regulators for money laundering risks. Since 1995, the number of Swiss private banks has shrunk from 350 to 150. Adding to Swiss banks' troubles is the competition they now face, especially from American private banks. To solve their problems, some banks are looking to grow their business overseas and improve their product offerings. The question is whether it will be enough or simply too little too late.
A troubling statistic: only one major company in North America named a woman as its chief executive in 2015. That woman was Andrea Greenberg, CEO of MSG Networks, the company spun off from Madison Square Garden. It was the third straight year in which the rate of new female CEOs declined, according to PwC. Currently, just 4% of S&P 500 companies have women in the top job, and only 19% have women represented on their boards.
Business Insider: Everyone's getting a bit overeager when it comes to bitcoin and blockchain technology, according to a new report from Morgan Stanley. The investment bank acknowledged that some of the enthusiasm was justified – for instance, blockchain technology could reduce costs at banks. But Morgan Stanley said the excitement may be coming a bit prematurely, since widespread use of the technology is still years away.
Forbes: It appears though that the Republic of Georgia missed Morgan Stanley's memo. The country is teaming up with bitcoin mining firm BitFury and Peruvian economist Hernando DeSoto to pilot a land-titling project based in blockchain technology. Citizens will be able to register their property with the government using the blockchain, which will provide the land titles with security and make it a real-time process. The project is landmark among non-Western countries, where land titling is uncommon.