Receiving Wide Coverage ...
Ch-Ch-Changes: Fintech will be shaking up the banking industry for years to come, according to a report from the World Economic Forum and Deloitte. The wide-ranging report instructs banks to prepare themselves for a state of near-constant disruption as tech firms alter consumers' expectations by making financial services faster and cheaper. The Wall Street Journal notes the reports' authors also arranged meetings between old-school behemoths like Visa and JPMorgan Chase and upstarts like Lending Club and Coinbase so the former group could get a sense of "where they can compete with the new players, and where they can collaborate." Bankers will find Reuters' interpretation of the report less reassuring. The publication says the WEF predicts an end to the full-service banking model and the beginning of "an era of growing specialization while relying online partnerships to deliver non-core services."
The Latest on Greece: Greek Prime Minister Alexis Tsipras is willing to give in to the bulk of creditors' demands, he said in a letter sent Tuesday night, raising hopes in the markets the country may yet be able to work out a bailout deal and stay in the eurozone. The Financial Times, which first reported news of the letter, cautions that European officials may yet balk at Tsipras' few lingering conditions. These include a more gradual rollout of reforms to the country's pension system and preserving the Greek islands' 30% tax discount on the value-added tax system. The Journal is more dismissive of Tsipras' proposal, reporting three European officials say it "appears to fall short of creditors' demands." In any case, the practical effect of Tsipras' letter may be limited since European officials say no deal can be reached before the Greek referendum Sunday, the Associated Press reports. And the New York Times points out since Greece's bailout deal expired at midnight on Tuesday, "an entirely new arrangement would have to be negotiated."
Meanwhile, Greece defaulted on a $1.7 billion payment to the International Monetary Fund Tuesday, but the Journal says it shouldn't cause too many waves for large U.S. banks. Since the Greek crisis has been unfolding for years, banks have had plenty of time to offload much of the Greek debt once held on their balance sheets. However, trading revenue may head south depending on investor reaction to the default. The FT takes a sympathetic look at Greek banks' position. They've raised capital and cut costs over the past five years, but that's no protection against the threat of bank runs and "the eurozone's convoluted set-up." A separate Journal article reports Greek citizens are flocking to both gold and to Bitcoin as they prepare for a possible exit from the euro.
Wall Street Journal
A former trader accused of conspiring to manipulate the London interbank offered rate didn't see what all the fuss was about, according to emails and interviews read aloud at the trial of ex-UBS and Citigroup employee Tom Hayes. He told authorities in May 2013 that he was above-board with UBS about what he was up to: "UBS paid a brokerage firm to provide him with a 'Libor service' and his manager knew Mr. Hayes had made an agreement with a trader at another bank on rate submissions."
MasterCard has cut off payment-processing services for ads purchased on the controversial classifieds website Backpage.com at the request of the Cook County sheriff's office. The site's adult-services section has come under fire for allegedly facilitating prostitution and online sex trafficking.
Big banks appear to have made progress in lowering their derivatives exposure as determined by one important measure, according to "Heard on the Street." "Combined, the top-four banks' derivatives holdings have dropped by nearly 40% over the past four years," writes David Reilly.
An op-ed by Jason L. Riley of the Manhattan Institute argues the Supreme Court's decision to uphold the "disparate impact" doctrine under the Fair Housing Act "could compound disparities in the name of reducing them."
Banco Santander is launching an investment fund with mobile-money group Monitise that aims to identify promising fintech startups with which to partner. Each company will funnel up to £10 million in capital to the fund over the next two years.
Forget about mortgage fraud: checking account fraud is the new crime of choice for identity thieves. A new Experian report finds that 89 out of every 10,000 requests to open checking accounts were fraudulent, compared to 83 out of every 10,000 mortgage applications.
The paper takes a broad look at Wall Street's growing interest in blockchain technology. The article is occasioned by Nasdaq's announcement last week that it plans to use distributed ledger technology from the startup Chain to issue and transfer securities on its new private market.
Forbes: Investor David Dreman says he's bullish on bank stocks in the new issue of Forbes: loan demand is up, the regulatory picture looks stable, and U.S. banks have comparatively low loan-to-capital ratios which should put more money in shareholders' pockets. He's particularly favorable about Wells Fargo, Fifth Third Bancorp and PNC Financial.