Receiving Wide Coverage ...
Sold: Wells Fargo is selling the mortgage servicing rights on $39 billion in loans to Ocwen Financial Corp. Terms of the deal were not disclosed. The move is par for the course these days as more and more large traditional banks offload mortgages to nonbank lenders to comply with new rules requiring them to hold more capital against the loans they service. Wall Street Journal, New York Times
Enforcement Update: Standard Bank (not to be confused, of course, with Standard Chartered) has been fined $12.6 million by the U.K.'s Financial Conduct Authority for lax anti-money-laundering policies and procedures. Meanwhile, an anonymouse tells the Journal Credit Suisse could wind up paying more than $800 million to the U.S. Justice Department in the first half of the year as it attempts to settle allegations that the bank helped Americans evade paying taxes.
Tougher Rules for Foreign Banks: Switzerland is doubling the amount of capital its banks must hold against the mortgages they lend in an attempt to cool its booming housing market. But analysts tell the Journal "the government's move was unlikely to put the brakes on housing-price rises because it probably wouldn't add much to the cost of a mortgage." Meanwhile, Dealbook looks at U.S. regulators' attempt to finalize foreign bank rules that would require overseas banks to abide by parts of Dodd-Frank. "If the rules do have teeth, it will end an intriguing game of cat and mouse, in which some overseas banks have taken elaborate steps to escape the reach of regulators," the article notes.
China's Shadow Banking Problems: The Chinese government is taking steps to avert the default of China Credit Trust Co., "a so-called shadow lender" in trouble after making a loan to a now-defunct coal mining company. (The company is being allowed to restart one of its mines as part of the attempt to avert default.) But some analysts tell the FT "a default would help raise awareness of risk across the financial system. Many products have been bought on the assumption that even bad investments will ultimately somehow be made good."
A Glut of Payments News: Watch out, PayPal. Payments startup Stripe has raised about $80 million in new funding this week from venture-capitalists and is now worth $1.75 billion. Meanwhile, T-Mobile has entered the ever-growing prepaid market with what else? a product geared toward the underserved. (BTN has more on whether this move is a game-changer.) And the Washington Post reports that the government made $24 million just by sitting on all the Bitcoin it seized in the investigation of alleged Silk Road kingpin Ross William Ulbricht.
New York Times
At the World Economic Forum in Davos, Paul Singer, founder of the hedge fund Elliott Management, voiced skepticism that banks "unquestionably understand" the potential risks on their balance sheets. Unsurprisingly, two banking executives Douglas Flint of HSBC and Antony Jenkins of Barclays disagreed with him.
Fabrice Tourre is seeking leniency as the Securities and Exchange Commission attempts to collect more than $1 million in penalties after a jury convicted him of defrauding investors in a mortgage deal last year. Tourre is hoping to pay no more than $65,000.
Columnist Edward Hadas argues Bitcoin is a fool's gold standard: "The underlying problem is the belief that Bitcoin's independence from government is a good thing. This libertarian notion could hardly be more wrong. Money is a common good for the whole society, and in the contemporary world governments are the pre-eminent social guardians."