Breaking News This Morning ...
Earnings: Wells Fargo
Receiving Wide Coverage ...
Alibaba IPO Looms: Chinese e-commerce firm Alibaba plans to hold its initial public offering within the next few weeks, according to the Wall Street Journal. Alibaba's hotly anticipated IPO could raise more than $20 billion. The Financial Times takes a more dramatic approach to the news: Alibaba's "self-imposed deadline is in danger of slipping as the company gets close to the moment when it will have to decide whether to go ahead with an international marketing trip involving its top executives," the paper writes, citing two anonymice. Alibaba hoped to take executives on a roadshow promoting the IPO starting "as early as July 21," but the clock is ticking.
Fischer on the Fed: New Federal Reserve vice chairman Stanley Fischer recommended that banking regulators receive an official mandate to maintain financial stability in a Thursday speech. Fischer clarified his position on several other hot topics in his debut speech as vice chairman. He's pro-Volcker rule, anti-breaking up the banks, and doubtful that the too big to fail problem has been solved. He also suggested he might support a plan to require the largest U.S. banks hold extra capital beyond the levels mandated under Basel III. Wall Street Journal, New York Times, Washington Post
Wall Street Journal
"Africa's biggest bank has joined China's largest securities firm in suing to get control of stocks of metals in Chinese warehouses that lenders believe may have been fraudulently used as collateral for loans," the Journal reports. African lender Standard Bank Group and China's Citic Resources Holdings have thus far been stymied in their efforts to get to the bottom of the suspected fraud.
Wells Fargo may not be the first bank that comes to mind when you think of a local lender, but the Journal seems to think it's a fitting designation for the San Francisco-based company when compared to the worldly JPMorgan Chase. Wells' position as the country's biggest bank not to mention its lead spot in earnings season reports is evidence that "global enterprises are out of favor, more-focused lending operations are in," according to the paper.
The usual glum predictions for big banks' second-quarter earnings get a colorful twist in Friday's Journal: lenders are "slogging through a malarial coastal swamp" in the current economic environment, according to banking analyst Chris Kotowski.
The current monitor of HSBC is launching a compliance-focused consulting firm called Exiger. "I don't have to explain to you how hot this sector is," Mike Cherkasky, who was appointed to serve as "the eyes and ears of the Justice Department" in the aftermath of its $1.9 billion settlement with HSBC in 2012, tells the Journal.
Wells Fargo is trying on a new look: fashion financier. The company's newly opened "apparel banking office" in New York City, which will target the apparel industry, "comes as Wells Fargo is challenged with diversifying its businesses away from mortgage banking, which has suffered from the broader drop off in refinancing."
BNP Paribas' $8.9 billion settlement with the U.S. government is evidence of a growing rift between stateside regulators over how to determine sanctions penalties, according to the FT. That duty typically falls to the Treasury Department's Office of Foreign Asset Control, but in BNP's case, "other agencies ratcheted up their penalty in unprecedented ways." Foreign banks that are next in line for deals to settle charges of sanctions violations, including Germany's Commerzbank, may be feeling nervous about this development.
Barclays is overhauling the duties of its 6,500 bank cashiers, giving them "new positions focused on giving customers advice on managing their finances rather than processing simple transactions." Several commenters suggest these new responsibilities are likely more about selling products than giving advice.
Goldman Sachs has hired consultant and Give and Take author Adam Grant to help the company better appeal to and mentor young talent. The move is characteristic of a banking industry concerned it lost caché with bright recent graduates in the aftermath of the financial crisis, according to the FT.
The Federal Reserve is considering changing the way it determines the Federal funds rate, which measures overnight U.S. interest rates. The Fed may take "into account a wider range of loans between banks, making [the Fed funds rate] more stable and reliable."
New York Times
House Republicans are pushing to sap the Federal Reserve's power with several bills. The most noteworthy one "would require the Fed to set interest rates based on a published rule like the Taylor Rule, a formula written by the Stanford University economist John B. Taylor that specifies the appropriate level of interest rates based on the pace of inflation and the gap between actual and potential economic output." While the bills would die in the Democrat-controlled Senate, "they highlight ideas that Republicans are likely to revisit if they win a majority in both houses of Congress in the midterm elections."
Payday lender Ace Cash Express has reached a $10 million settlement with the Consumer Financial Protection Bureau over its allegedly abusive debt-collection tactics. "Ace was so intent on squeezing money out of customers that its training manual included a graphic of a step-by-step loan process that could trap delinquent borrowers in a cycle of debt," the Washington Post reports.