Wall Street Journal
Volatility in currency markets should give a boost to banks' first-quarter earnings. Currency market volatility rose 18% from Jan. 1 to mid-March, according to Deutsche Bank. However, not every bank will glean a benefit from the currency volatility. Citigroup is expected to report a decline in trading revenue because of its exposure to the Swiss franc. The irony is that JPMorgan Chase, Citigroup and others remain at the center of government probes into alleged rigging of foreign-exchange rates.
UBS will open a research-and-develop lab focused on the blockchain technology that forms the basis of Bitcoin. UBS wants to explore using blockchain for other financial-services transactions, such as clearing securities and making cross-border payments. Other banks, such as Barclays, have launched financial-technology R&D labs, but UBS is one of the first banks to go public with its plans to use the blockchain concept.
Financial Times
Britain is turning to faith to restore the people's trust in banking. Dame Colette Bowe, chair of the Banking Standards Board, named Rev. David Urquhart, the bishop of Birmingham, to the board, which was created last year to promote "high standards in the sector." Bowe also named Baroness O'Neill, a philosopher, and Sir Brendan Barber, a trade unionist to the board.
New York Times
Silicon Valley Bank is envied by many large, traditional banks for its secure position in the technology start-up universe. But the bank's tight relationship with many tech companies, raises concerns that the Santa Clara, Calif., bank is "vulnerable if the industrys explosive growth turns out to be a bubble." The bank is now attempting to keep firms it used to let "graduate" to larger financial institutions by expanding its services. (Silicon Valley Bank even is willing to work with companies involved with Bitcoin and other virtual currencies.) For now, however, Silicon Valley's loan portfolio is growing rapidly and its share price has more than doubled from its high before the financial crisis.
The "PayPal Mafia" is profiled by the Times. These former PayPal employees, have landed posts on boards, as investors, advisers, executives, or a combination of all those roles, in many of the most valuable Silicon Valley start-ups, including apartment-rental site Airbnb, big-data provider Palantir, payments disruptors Square and Stripe. One of the PayPal alumnus quoted in the story, Max Levchin likens the group to a former military squadron whose destinies were formed in the trenches of battle. Another ex-PayPaler, is equally impressed with the PayPal Mafia's accomplishments: "We went from this bunch of misfits to the center of the ecosystem," said Keith Rabois, now a partner at Khosla Ventures.
Is HSBC being a good bank, or a naughty bank? HSBC had previously been commended by the Justice Department for trying to change its ways after it agreed to a deal following a 2012 criminal prosecution. HSBC had been accused of internal problems that led to its involvement in money laundering for drug cartels, and the transfer of funds to Iran. Now, an independent monitor, in a court filing in federal court in Brooklyn this week, said HSBC has been slow to change and it's failed to spot suspicious transactions, in large measure because its anti-money laundering technology still needs updating.
Washington Post
Citizens Financial Group will offer parents of college students a loan product with fixed interest rates lower than federal loans. The Citizens loan will have a rate as low as 6.6%, below the 7.21% federal Parents Plus loan rate. Citizens Bank also won't charge fees on the product.
Elsewhere ...
Reuters: Why is Bank of America siding with an individual homeowner in a Supreme Court case? It may have to do with B of A's desire to preserve its ability to appeal adverse rulings in future cases. B of A filed a friend-of-the-court brief siding with Louis Bullard in his case against Blue Hills Bancorp in Massachusetts; Bullard is battling the bank over a bankruptcy plan. Bullard's lawyer was surprised when B of A sided with his client, and the justices were surprised as well. Justice Anthony Kennedy asked why "some of the very major creditors in the country" had sided with the debtor. B of A wrote in its brief that allowing appeals when bankruptcy plans are rejected would assist with "the orderly and uniform development of bankruptcy law," which would benefit creditors as well as homeowners.
