Receiving Wide Coverage ...
He's back: Anshu Jain, the former co-CEO of Deutsche Bank, is joining Cantor Fitzgerald as group president, a newly created position, where he will help oversee Cantor's overall strategy and expansion efforts. His appointment comes 18 months after Jain resigned from Germany's largest bank "as concerns mounted over Deutsche's financial health and the many investigations it was facing," the New York Times said. He joined Deutsche in 1995, becoming co-CEO in 2012 before being replaced, along with co-CEO Jrgen Fitschen, by John Cryan. Wall Street Journal, Financial Times, New York Times
Just days before Jain's appointment, the Times looked back at Jain's legacy at Deutsche Bank. "Once a sleepy lender to German car companies," the article says, Deutsche "had transformed itself in just 10 years into a force in financial engineering, selling interest-rate swaps, credit derivatives and opaque tax-slashing investment vehicles to the world's wealthy elite. In the view of one senior executive, it all came down to masterly salesmanship by a single man, Anshu Jain, the chief promoter of the bank's hottest product: risk." It didn't end well. On December 22, for example, the bank agreed to pay $7.2 billion to settle toxic mortgage claims with the U.S. Justice Department, "a fitting coda to a turbulent 21-year run by the trading and banking unit at Deutsche."
Wall Street Journal
Happy New Year?: 2017 is shaping up as a good one for banks, but whether or not that really happens could have a wider impact on the financial markets and the economy at large, the Journal reports. "This year will reveal whether a new economic order will actually emerge, and boost banks' businesses with it," the paper said. "The outcome is crucial for both broader markets and the nation's outlook for growth. Banks' ability and willingness to lend could prove critical to the business boom the Trump administration aims to generate."
Bucking the trend: While the global trend is toward a cashless society, the Swiss prefer the old ways. "The Swiss love cash, and use it regularly to pay for purchases large and small," the Journal reports. "Their affinity shows no sign of abating, and flies in the face of a global trend toward cashless economies and electronic payments that can better track potential fraud." Seveeral reasons were suggested for the Swiss' "affection for cash," the Journal says. "It is a relatively safe country, making robbery or mugging less likely; it is also a predominantly rural place, where transactions have tended to be face-to-face, and money may be seen as a tangible thing to keep on hand." In a country known for neutrality and cleanliness, one wonders if the Swiss may lose their love for money once they learn how dirty cash really is. Scientific American reports on studies "piled up in recent years" that have found U.S. money "bacteria-laden," often with yeast or mold present too.
Ease the squeeze: Even as the incoming Trump administration may try to gut the Consumer Financial Protection Bureau, it plans to propose later this year a new set of rules to restrict overdraft charges on bank checking accounts, a major profit center for many U.S. banks. "Many observers say that this little-regulated corner of the retail banking industry is in need of urgent reform," the FT comments. "They note that annual charges for overdrafts, many of which are inadvertent, now amount to more than certain other forms of credit — pawn shops, payday lenders and tax-refund anticipation checks — put together. Banks have simply been offsetting the profit-sapping effects of low interest rates, they argue, by squeezing consumers."
One of the banks cited for this new urgency to limit overdraft charges is Wells Fargo, where overdraft income increased "at more than five times the rate of its U.S. bank peers in the third quarter," the FT reports in a related story. While overdraft charges at all banks rose by 2.4% in Q3 to more than $3 billion, it jumped by 7.5% at Wells, well above the average 1.3% increase at JPMorgan Chase, Bank of America, TD Bank and US Bank.
Banker charged: Melissa Strohman, a former senior vice president at now-defunct Hopkins Federal Savings Bank in Maryland, was charged with stealing more than $1.8 million from customers over six years. The U.S. Attorney for the District of Maryland alleged the banker used the money to pay her family's mortgages, property tax and credit card bills. She faces up to 30 years in prison if convicted.
"This is a shadow payday lending program by the banks, dressed up in a different name." — Mike Calhoun, president of the Center for Responsible Lending, on bank overdraft charges.