More problems for Deutsche A group of Democrats in the Senate wants the Federal Reserve to investigate whether Deutsche Bank complied with anti-money-laundering laws after former bank employees said they told higher-ups that several transactions involving President Trump and his son-in-law, Jared Kushner, were potentially suspicious. The request was made in response to a May 19 article in the New York Times that said senior officials at the bank ignored the employees’ warnings. New York Times, American Banker
At the same time, the European Commission is reviewing money-laundering cases at European banks over the past six years “to assess what went wrong and decide possible tweaks to rules, an EU official said, citing Deutsche Bank and Societe General as among the screened lenders," Reuters reports. "The review is part of a broader plan to improve the European Union’s approach to combating money laundering after a string of the bloc’s banks … were embroiled in scandals. While it is normal for the EU to examine industrial practices before deciding possible rule changes, the assessment of money-laundering cases shows the scale of the problem and the questions facing regulators, given many of the cases erupted after a series of legislative reforms.”
Separately, German prosecutors have launched a criminal investigation into about 70 current and former Deutsche Bank employees — including Garth Ritchie, its investment banking chief and a deputy to CEO Christian Sewing — over their “potential involvement in trades handled by the bank that were used by clients to trick tax authorities into refunding dividend tax that was never paid.”
Graf “steered the company through a period of growth and product rejuvenation. His successor will face the challenge of maintaining the company’s growth pace and solid balance sheet while continuing to diversify its revenue streams.”
Freed Citing “substantial improvements” in the bank’s risk management and internal auditing controls, the Federal Reserve said it lifted requirements imposed six years ago on JPMorgan Chase following the so-called London Whale scandal, which cost the bank about $6 billion in trading losses and more than $1 billion in fines.
Financial Times
Sanctioned The Fed has publicly sanctioned a former Goldman Sachs quantitative analyst who brought home confidential and proprietary information from the bank’s office. According to the sanctions, Youlei Tang, also known as Alex Tang, “must now disclose the breach to any future regulated employer, must notify the Fed of any future employment in the industry and must undergo training.” Goldman fired Tang last August when it discovered his actions and assisted in the Fed investigation. He now works for Barclays.
Going mobile Nearly half the adults in the U.K. used mobile banking in 2018 and one in 10 “now chooses to live a near-cashless life,” according to a report from UK Finance, a trade association. “More and more customers are now opting for the speed and convenience of paying with their contactless cards, or using mobile banking to check their balances and make transfers while on the move,” said Stephen Jones, the group’s CEO.
Running and banking Why are so many bankers addicted to running? "The easy answer is that both attract 'type A' personalities. The intense preparation demanded by a marathon isn't that different from what it takes to win a big client. Similarly, the stamina to keep going when your legs have given up is the same trait that powers investment analysts through 16-hour days."
Cost cutter Barclays' new chairman Nigel Higgins, in the job barely a month, "has wasted no time trimming excess at the U.K. lender."
Change of plans Digital Asset Holdings, the firm previously headed by former JPMorgan Chase executive Blythe Masters, is backing off its “grand plan to apply blockchain technology to the world of securities and trade settlement” and instead “switching its focus to so-called ‘smart contracts,’ which use similar code to that used in automated transactions such as direct debits and standing orders. The paper notes, "The shift comes as Germany’s central bank expressed doubts about blockchain’s potential, relative to existing technologies.”
Blockchain digital illuminated shape. Big data node base concept. 3d rendering illustration
Denys Rudyi - stock.adobe.com
Washington Post
Landmark case JPMorgan Chase’s recent agreement to pay $5 million to settle a class-action lawsuit brought by male bank employees claiming they were denied the same access to parental leave as women “could serve as a wake-up call to companies that may now see a pattern of legal questions being raised. The size and scope of JPMorgan Chase, combined with the communications reach of the American Civil Liberties Union,” which represented the plaintiffs, “has already brought the issue much attention,” not to mention the $5 million settlement. “Some experts believe the high-profile case could have a big impact.”
Quotable
“Only by conducting a thorough review of the full range of this activity can we better understand what happened in these cases; what practices, procedures, or personnel may need to be changed at the bank; and what regulators should do to ensure the Federal Reserve’s ability effectively to monitor compliance with anti-money-laundering laws.” — A letter from several Democrat senators calling on the Fed to look into what they believe may be suspicious transactions at Deutsche Bank involving President Trump and Jared Kushner
A budget bill passed by the House Financial Services Committee would eliminate the Public Company Accounting Oversight Board and cap the Consumer Financial Protection Bureau's budget at roughly $249 million.
As the banking-as-a-service model has evolved over the last decade amid widespread consent orders and BaaS partnership failures, the number of sponsor banks has dwindled, leaving fintechs to compete for the business of those that remain.
First Savings Financial Group could have bailed out of SBA lending after the departures of key executives and loan officers. Instead it retooled the unit, and it's now reaping the benefits.
Citizens Financial Group's promotion of Brendan Coughlin to company president comes at the same time as CFO John Woods prepares to leave for State Street. Both executives have been viewed as potential successors to CEO Bruce Van Saun.
