Wall Street Journal
Preparing for cyberwar: Eight of the largest U.S. banks, including JPMorgan Chase, Bank of America and Goldman Sachs, have joined together to tackle the growing threat of cyberattacks. The banks expect group members to share more information with each other about threats, prepare comprehensive responses and conduct "war games." The financial services industry ranked third in the number of cyberattacks last year, after health care and manufacturing.
Big whistleblower awards: Harry Markopolos, who sounded the alarm about Bernard Madoff's Ponzi scheme, and a forensic accounting team he put together could reap a combined $100 million from federal government settlements with State Street and Bank of New York Mellon. Markopolos assembled and advised a team of former bank employees who blew the whistle on the banks' alleged overcharging of foreign currency traders.
Credit in riskier hands: Total household debt rose by $35 billion to $12.3 trillion in the second quarter, driven to a large degree by a rebound in credit card lending. But a growing percentage of that new debt is owed by people with low credit scores.
According to the New York Fed survey, the percentage of people with credit scores between 620 and 660 that had a credit card rose to 58.8% in 2015 from a low of 54.3% in 2013. Among those with scores below 620, the number of people with a credit card increased to 50% from a low of 45.6% two years ago. Recent results in the U.K. showed a similar increase in riskier borrowers.
Too many banks?: TIAA's planned acquisition of EverBank raises a question: Why are there still so many American banks? There have been 122 bank acquisitions so far this year, but that's "more a steady stream than a deluge," leaving 6,000 independent banks. One reason for the relative dearth of buyers is "underwhelming financial results" at banks caused by low interest rates. Then there are regulations, higher capital requirements, technology issues and competition from non-traditional operators.
War against oligopoly: The U.K.'s Competition and Markets Authority is embarking on a "cyber war against the UK's oligopoly in retail banking," the FT reports. The CMA wants financial institutions to adopt common standards for the exchange of product and customer data, including the building of financial apps. That could both help and hurt big commercial banks.
"Banks hope that financial technology will bolster their depleted margins by cutting staff costs," the paper says. "Implicitly, the CMA hopes fintech will have the opposite effect by increasing competition."
New York Times
What really happened?: Banker turned writer William D. Cohan has mixed feelings about the aftermath of the 2008 financial crisis, now coming up on its eighth anniversary. On one hand, the billions of dollars Wall Street firms have paid in fines and penalties "still feel to me more like extortion than justice." But at the same time, the settlements have "allowed the big banks to obfuscate the extent of the wrongdoing."
There's a lot we don't know "about the bad behavior and deception that occurred inside the big Wall Street banks that helped to cause it," he writes. But thanks to two separate court maneuverings in recent weeks, "we may yet discover more about what happened on Wall Street that caused, exacerbated or tried to cover up the unfolding crisis," Cohan writes.