Morning Scan: SEC Pick Seen as Street Friendly; Wooing Banks

Receiving Wide Coverage ...

Too friendly?: Jay Clayton, President-elect Donald Trump's pick to run the Securities and Exchange Commission, "is expected to end the streak of aggressive regulators and litigators overseeing the country's top markets," the Wall Street Journal reports, describing Clayton in the headline as "a 180" from the outgoing chair Mary Jo White. The nomination of Clayton, a partner at Sullivan & Cromwell who has represented the likes of Goldman Sachs and Barclays, "signals Republicans prefer an SEC chairman who is attuned to the needs of Wall Street firms," the Journal added. That contrasts with the record of White, "a former prosecutor who presided over the SEC in a period when the agency collected record amounts of penalties and disgorged profits from wrongdoers." Wall Street Journal, Financial Times, New York Times, Washington Post, American Banker

Quick exit: Peter Hazlewood, the head of Deutsche Bank's financial crime and anti-money-laundering unit, is leaving the post after just six months following "an internal budget dispute over his requests to add hundreds of new employees," according to the Journal. "The position is central to the lender's relationships with regulators, as well as its ability to avoid legal pitfalls, at a time when it still faces an array of costly regulatory challenges." His replacement is expected to be named as soon as next week. Hazlewood may remain at the bank in another position. Wall Street Journal, Financial Times

Wall Street Journal

Hush-hush: European governments are moving carefully in trying to woo the continent's major banks to relocate from London following the U.K.'s decision to leave the European Union. "But with elections on the horizon in France, Germany and the Netherlands — and populist parties like Marine Le Pen's National Front gaining in the polls — governments are afraid to publicly court big banks with promises of favorable treatment," the paper reports. "Instead, Paris and other capitals have embarked on a round of quiet diplomacy with the financial industry."

Best hope: The Heard on the Street column says a 2014 bill written by Sen. Mike Crapo, R-Idaho, and former Senator Tim Johnson, D-S.D., still has potential to resolve the Fannie Mae and Freddie Mac dilemma. The bill "stands out for its potential to achieve broad consensus — essential to avoid a potential Democratic filibuster in the Senate."

"The Johnson-Crapo bill would wind down the companies and transfer much of their infrastructure to a new securitization platform cooperatively owned by market participants," the Journal explains. "The mortgage-backed securities issued by the platform would have explicit federal guarantees through an agency modeled after the Federal Deposit Insurance Corp. To introduce private capital into the system, outside investors would be paid to shoulder the risk of the first 10% of losses on mortgage pools before federal insurance kicks in."

Guilty: Jason Katz, a former foreign exchange trader at Barclays, pleaded guilty to conspiring to manipulate currency rates. He is the first individual to be charged in the investigation, which has so far led to guilty pleas by five banks, including Barclays, the paper says.

Financial Times

Concerned: The U.K.'s Competition and Markets Authority has some misgivings about Mastercard's planned acquisition of payments technology company Vocalink and has given the credit card company one week to respond to its concerns before starting an in-depth investigation into the deal. The CMA is concerned that "MasterCard could stifle competition among companies that run Britain's cash machine network," the FT reported, and the merger "would reduce competition in cash machines using Link ATM technology."

Quotable ...

"Jay Clayton is a highly talented expert on many aspects of financial and regulatory law, and he will ensure our financial institutions can thrive and create jobs while playing by the rules at the same time." — President-elect Donald Trump on his nominee to head the SEC