Receiving Wide Coverage ...
Prepping for Stress Tests: The Financial Times and Wall Street Journal each serves up a curtain raiser on next year's Fed-conducted stress tests, playing off the instructions the Fed released on Thursday, as well as the European Central Bank's stress test results that are due to be released on Sunday. Among the stressful scenarios to which U.S. banks will be theoretically tested are oil prices rising to $110 per barrel, and increased spreads on assets, such as leveraged loans. The Fed's emphasis on an extreme deterioration on corporations' financial well-being is a new wrinkle. More guidance will be issued to banks next week on how they are to assess their risk management on leveraged loans.
Does this sound familiar? Banks are closing hundreds of branches and eliminating thousands of jobs to cut costs and move to a digital business model. It's not the U.S. banking industry, but the British banking industry. Lloyds Banking Group, for one, is going to cut about 9,000 jobs. The FT's fairly lengthy story touches on many of the same issues in retail banking that are common on this side of the Atlantic. Regular American Banker readers know what those are bitcoin, peer-to-peer lenders, online alternative lenders, Apple Pay, etc.
Two former HSBC investment bankers sued the company, saying they were retaliated against for reporting a colleague was being sexually harassed by bank executives.
New York Times
Columnist Floyd Norris criticizes the final version of the QRM rule, saying it completely drops the notion of risk retention for residential mortgages. Plenty of groups fought the principle and share the blame for it being killed, but one of the main criticisms was the idea that it would be too burdensome for lenders to develop two sets of criteria for approving mortgage loans. That argument is hard to believe, considering there remains a wide variety of loan types, Norris writes. Norris quotes former House Banking Committee chair Barney Frank and former FDIC chair Sheila Bair to back up his assertions.