Noose tightens on Swedbank; Barclays investment bank chief quits

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GSE plan coming
President Trump directed the Treasury Department and Department of Housing and Urban Development “to begin drafting plans to overhaul Fannie Mae and Freddie Mac to reduce the government’s footprint in housing finance.” The president’s memo calls on the two agencies to come up with a plan to promote “competition in the housing finance market and create a system that encourages sustainable homeownership and protects taxpayers against bailouts.” Wall Street Journal, Financial Times, American Banker

The Senate Banking Committee held a hearing on GSE reform.

The screws tighten
The money laundering scandal at Swedbank continues to get worse. Swedbank fired CEO Birgitte Bonnesen on Thursday and replaced her with CFO Anders Karlsson on an acting basis. “The developments during the past days have created an enormous pressure for the bank. Therefore, the board has decided to dismiss Birgitte Bonnesen from her position,” Swedbank Chairman Lars Idermark said. Bonnesen was head of the bank’s Baltic region when the alleged money laundering took place. Wall Street Journal, Financial Times

The Swedish Economic Crime Authority, which raided the bank on Wednesday on suspicions it broke insider information rules, has broadened its investigation to include aggravated fraud as well. At the same time, “the New York State Department of Financial Services wrote to Swedbank last month saying it was looking into seven separate matters involving the Swedish bank,” the Financial Times reports. Wall Street Journal, Financial Times

“Anybody wanting a blueprint for how not to handle a money laundering scandal" has one, the FT says.

Time to go
Barclays announced “the surprise departure” of Tim Throsby, the head of its investment banking division, “in a reshuffle that puts Chief Executive Jes Staley directly in charge of the embattled unit of the British lender.” The bank said Throsby “decided to leave after it stripped away his role overseeing the bank’s global markets, global banking and corporate banking businesses.”

Throsby’s departure “sent shockwaves through the U.K. lender’s trading floors only weeks before an activist investor will attempt to force his way on to its board.” Sherborne Investors has taken a 5.5% stake in Barclays “in hopes of helping drive a turnaround following persistently low returns at the corporate and investment bank.” Wall Street Journal, Financial Times

Financial Times

Unfinished business
Women at JPMorgan Chase’s U.K. operation earned 26% lower salaries than their male counterparts and received 41% smaller bonuses last year, unchanged from a year earlier. The bank employs about 10,000 people in the country. “We have more work to do, not only to increase women’s representation at all levels, but to advance more women into management and leadership positions across the firm,” human resources executive Julia Meazzo said.

Fined
Goldman Sachs was fined £34.3 million by the U.K.’s Financial Conduct Authority for misreporting more than 220 million transactions over 10 years.

Elsewhere

Slipping
While Wells Fargo’s consumer bank shows “signs of recovery” from its phony accounts scandal, the bank’s corporate unit “has struggled to expand its customer base,” with revenue falling 4% last year, compared to average annual growth of 6% before that. “It’s been a little bit more challenging for us to bring in new customers,” corporate bank head Perry Pelos told Reuters.

No problem
The inverted yield curve is not a problem for banks, Barry Knapp, managing partner at Ironsides Macroeconomics, said on CNBC.

Quotable

“It is time for the United States to reform its housing finance system.” — President Trump, in a memo directing the Treasury Department and HUD to develop a plan to expand the private sector’s role in the residential mortgage industry.

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