Receiving Wide Coverage ...
Moynihan Under the Microscope: The drumbeat to force Bank of America chief executive Brian Moynihan to give up his additional role as chairman keeps getting louder. The Financial Times reports proxy adviser Glass Lewis is recommending shareholders vote against the board's decision to combine the chairman and CEO role. Major B of A investors including Norges Bank Investment Management and two public pension funds have also come out against the merged roles. A victory for the naysayers at the special meeting and vote on September 22 would be an "embarrassing defeat" for B of A, according to the FT. Meanwhile, Moynihan offered up some thoughts on ethics in banking during a discussion at a Charlotte, N.C., church on Wednesday. "The danger in banking, and where it got messed up ... is we lost the purpose — which was people said, 'We'll just make money,'" he said in explaining the root causes of the financial crisis.
Ready or Not: The Oct. 1 deadline for merchants to install equipment compatible with chip-enabled cards is fast approaching, but there are still plenty of security holes for fraudsters to exploit. The Wall Street Journal reports the gas pump is a particularly hot destination for credit-card fraud, since gas stations have until 2017 to update their technology. Criminals can simply wander up to an unattended pump and use a stolen card, or else attach "skimming" devices to the pump to capture card data and create counterfeit versions. A separate article in the paper notes lots of other small-business retailers have yet to update their systems, despite the fact they will be held liable after the October deadline for some losses related to counterfeit cards. Some small merchants just don't know about the deadline, the paper reports, while others say the risk of credit-card fraud at their stores is so low they're willing to take their chances.
Wall Street Journal
Deutsche Bank's outgoing co-chief executive Jrgen Fitschen lent credence to rumors the bank could scale back its 20% stake in the Chinese lender Hua Xia Bank. "It is obvious that [foreign companies in general] exit minority stakes in China," Fitschen saidin a speech earlier this week, although he added Deutsche plans to continue to have a presence in the country.
The stock market may be up and down, but banks these days are looking pretty steady, observes David Reilly. He points to banks' second-quarter earnings (up 7.3% from the previous year), the low rate of failures (just one last quarter), and loan growth across all four major categories.
New York Times
Venture capitalists have gone gaga for cybersecurity startups in the past year or two, but now some investors are wondering if Silicon Valley's hottest industry actually makes money. The paper reports investors are becoming increasingly aware cybersecurity is a crowded field and there are too many startups that perform the same function — namely, identifying suspicious behavior in real time and taking steps to ward off attacks.
European Central Bank president Mario Draghi has a lot on his plate. The paper reflects on the major issues influencing policy at the central bank in advance of its Governing Council meeting, which include China's economic slowdown, recent stock market volatility, concerns about deflation in the eurozone and the possibility the Federal Reserve will soon start raising interest rates.
United Commercial Bank was the first bank to receive bailout money during the financial crisis, only to fail less than a year later. Now one of its former executives has received another unappealing distinction: he's become one of the only high-level bankers to face jail time for his actions during the crisis. Former chief credit officer Ebrahim Shabudin was sentenced to eight years in prison for concealing mounting loan losses from auditors and investors.
A new study supports the idea that people save more when bank accounts make it tough for them to dip into cash. Study participants saved more of their pay in accounts with larger withdrawal penalties, suggesting "sometimes the factors that have the biggest influence over financial habits are psychological, not economic," according to the paper. That said, the article notes people often have valid reasons for withdrawing funds — so the best course of action may be to build up emergency savings, then start socking away cash into harder-to-access accounts.