Receiving Wide Coverage ...
More risky: Citigroup, Bank of America and Wells Fargo pose greater systemic risks to the global financial system than they did last year and had their capital requirements increased by regulators. The Financial Stability Board, which ranks the most systemically important financial institutions annually, also said Industrial and Commercial Bank of China presented more risk than last year. But HSBC, Barclays and Morgan Stanley—which sold all or part of their riskier businesses or reduced the size of them—were all deemed to be less systemically risky and had their capital requirements reduced. Globally, 30 banks are considered systemically important and subject to extra capital requirements. Financial Times, New York Times
The European Union will propose new rules Wednesday requiring large foreign banks to hold extra capital and liquidity inside the union. "If adopted into EU law, the commission's proposals would force U.S. investment banks such as Goldman Sachs and JPMorgan to have additional capital and liquidity in the EU so their subsidiaries can better withstand a crisis and be separately wound up if needed by European authorities," the Financial Times explained. Wall Street Journal, Financial Times
Wall Street Journal
Getting tougher: The OCC is considering placing tougher restrictions on large banks' ability to govern themselves if they violate banking laws. Under the proposal, banks would be required to get OCC approval before changing senior executives or board members, limit golden parachutes to departing executives, and go through a longer approval process before changing their business plans. The proposed changes follow last Friday's decision by the agency to revoke parts of its regulatory consent order with Wells Fargo and extend it to other banks that violate the law. "The OCC's tougher stance follows a wave of criticism from the public and lawmakers, who have called the settlement with Wells Fargo inadequate," the Journal said.
Cramming: U.S. financial regulators "are scrambling to complete a series of unfinished rules designed to rein in Wall Street" before Donald Trump becomes president, the Wall Street Journal reports. The CFPB, for example, is working to finish a "contentious measure" that could make it easier for consumers to sue banks rather than use mandatory arbitration.
Ally settles: Ally Financial said it agreed to pay $52 million to the U.S. Justice Department to settle mortgage-backed securities claims against its former Residential Capital subprime mortgage unit. The unit filed for bankruptcy in 2012 after mortgage-backed bonds it issued went bad.
Goldman quits R3 group: Goldman Sachs quit the R3 blockchain consortium that was put together last year to find ways to use the technology behind bitcoin to improve bank payments and settlements. Goldman's decision to leave the group is "a sign of tensions emerging as the big banks try to place their chips on a technology that could cut tens of billions of dollars of costs from the financial sector," the FT reported. Goldman was one of nine original members of R3, which has since grown to more than 70 fee-paying members. According to the Times, Goldman wanted more operational control and was unwilling to invest money in the venture with dozens of co-investors.
New York Times
Bright side for the small guys: Big Wall Street banks aren't the only ones who stand to benefit from a Trump presidency. Small community banks see "a chance not just for regulatory relief, but for a reordering of priorities away from the wealthy interests of the big cities and toward the rural and blue-collar communities" they serve. Community bankers' support for Trump "has been pervasive and consistent," with roughly 84% of them saying they supported him, according to a survey conducted by the industry's trade group.
While Donald Trump will have a friendly Republican-controlled Congress to work with come January, he'll still have to deal with that nemesis of Wall Street and architect of the CFPB, Senator Elizabeth Warren, D-Mass., who is moving to fill the post-election power void in the Democrat Party. (Politico)
"Tell your editors that they need to run a headline that says 'Main Street Won.'"
— Rusty Cloutier, president of MidSouth Bank in Lafayette, La., to a New York Times reporter about Donald Trump's victory.