Receiving Wide Coverage ...
Nixed: U.S. banking regulators rejected Wells Fargo's revised living will as inadequate and imposed new sanctions on the bank: preventing it from setting up overseas entities and buying nonbank companies. Wells was one of five big banks – the others were JPMorgan Chase, Bank of America, Bank of New York Mellon and State Street – whose living will plans were rejected last April; Wells was the only one whose revision did not pass muster. The bank has until March 31 to submit a third plan; if that one is also rejected, the bank could be hit with more sanctions, including higher capital requirements. "This the first time that regulators have imposed penalties since the country's biggest banks were required to submit 'living wills' starting in 2012," the Wall Street Journal notes. Wall Street Journal, Financial Times, New York Times, Washington Post, American Banker
Fallout also continues in related services. Wells said it has temporarily stopped sales of renters' insurance provided by Assurant while it conducts "a complete review of our online insurance product referrals." The growing scandal "highlights the risks that insurers run as they experiment with different distribution methods," the FT says.
Outlawed: In what seems to be becoming a trend, Venezuela is taking nearly half its paper money out of circulation. Starting Wednesday, Venezuelans will have just two days to deposit more than six billion of now outlawed 100-bolivar notes into banks or have them become worthless. Although there is a grace period, sort of: people who want to exchange the notes after that have 10 days to submit them to the central bank, although they'll first have to submit to questioning by the secret police. The move is designed to combat contraband along the country's borders. India, you may remember, confiscated most of its paper money to fight tax evasion and black marketeering. Wall Street Journal, Washington Post
Wall Street Journal
Tapped: The Journal reports Goldman Sachs plans to name David Solomon, co-head of the bank's investment banking division, and CFO Harvey Schwartz as the top lieutenants to CEO Lloyd Blankfein, replacing Gary Cohn, who is joining the Trump administration as its chief economic advisor. The paper calls the promotions "the most significant top-level management change at the firm in a decade." Technology chief R. Martin Chavez is expected to replace Schwartz as CFO.
New York Times
Too late: A group of big banks have asked the U.S. Supreme Court to rule that regulators took too long to file suit over tens of billions of dollars of mortgage-backed securities. The banks, including Wells Fargo, Credit Suisse and Deutsche Bank, have asked the high court to review a lower court ruling that the regulators filed their claims on time; the banks argue there should have only been a three-year window, which was missed. But the Justice Department says the banks' argument lacks merit and asked the court not to hear the case.
The case involves the August 2009 failure of Colonial Bank of Alabama, one of the largest bank failures in American history. The FDIC sued the banks that issued or underwrote $300 million in mortgage-backed securities Colonial purchased that led to its demise, claiming that the disclosures on the bonds contained false or misleading information. The suit was filed in 2012, about five years after Colonial bought the securities, the banks say.
Quotable ...
"Not good, but it could have been much worse." — Ian Katz, director of the policy analysis group Capital Alpha, commenting on the Wells Fargo regulatory sanctions
