Pandit makes a big card bet; two senior Goldman execs to leave
Receiving Wide Coverage ...
Goldman handshake: Pablo Salame and Isabelle Ealet, two of three executives who oversee Goldman Sachs’ securities division, are retiring from the bank next month, leaving Ashok Varadhan as the sole head of the unit. The division “typically prefers multiple co-heads,” the Wall Street Journal notes.
Their departure caps “a period of turmoil for a division that was once the bank’s biggest and most powerful growth engine” but which “has struggled more than peers such as JPMorgan Chase, Citigroup and Bank of America,” the Financial Times adds. The fact that the two executives, both of whom are in the early or mid-50s, are retiring “underscores the pressure bubbling up from below, as younger traders compete for their share of shrinking profit pools.”
Wall Street Journal
Back in the game: The Orogen Group, the investment firm headed by former Citigroup CEO Vikram Pandit, is investing $100 million in Fair Square Financial, which issues credit cards under the brand name Ollo and targets consumers with less-than-perfect credit. Pandit, who has served on Fair Square’s board since its founding in 2016, said the company will be targeting consumers with midrange credit scores, as big banks focus on affluent customers and smaller issuers focus on those with weak credit. “There was a large group in the middle that seemed very underserved,” Pandit said.
Hearing on the Hill: Richard Clarida, President Trump’s nominee to be vice chair of the Federal Reserve, will tell the Senate Banking Committee Tuesday that financial regulatory policies should “preserve the far greater resiliency and stability of the financial system that has been achieved as a result of the significant reforms that have been put in place since the financial crisis,” according to his prepared remarks.
But Fed nominee Michelle Bowman, who would represent community banks on the panel, is expected to criticize some of those regulations at her confirmation hearing.
Opening soon: GreenSky, the 12-year old financial technology company that operates a lending platform in which banks make loans to merchants, is planning to go public with an equity offering that would raise more than $700 million.
Not interested: Steve Eisman, the money manager who made a fortune betting on the housing collapse, portrayed in “The Big Short,” isn’t placing any bets on cryptocurrencies. “I don’t see the purpose of it,” he said at a conference in Hong Kong. “What value does cryptocurrency actually add? No one’s been able to answer that question for me.”
Watching Mr. Big: The situation involving Barclays CEO Jes Staley, who was penalized $1.5 million for trying to unmask a whistleblower at the bank, points out the need for corporate boards to be aware of misconduct in the C-suite. “Nobody else controls the C-suite,” said Scott Killingsworth, a compliance attorney. “The board has got to do it; it’s a nondelegable duty.”
New York Times
Impact investing: The upcoming emergence from bankruptcy of Remington Outdoor, one of the oldest and largest gun manufacturers, offers an opportunity for commercial banks to make a “social impact” by backing an investor “willing to buy Remington with a plan to transform the company into the most advanced and responsible gun manufacturer in the country,” columnist Andrew Ross Sorkin suggests. “They could create a profitable model for the rest of the industry using technology and sound sales policies to reinvent the modern-gun manufacturer.”
Bank of America, which has a big social impact policy, “could be a perfect candidate to take a piece of Remington,” he suggests. JPMorgan Chase also “has been a big proponent of impact investing.”
“I have witnessed firsthand how the regulatory environment created in the aftermath of the crisis has disadvantaged community banks. If confirmed, I will bring this perspective to my work at the Board to ensure that rules preserve the resiliency of the financial system, but are appropriately tailored to the size, complexity and risk of an institution.” — Michelle Bowman, one of President Trump’s nominees to join the Federal Reserve Board of Governors, in her prepared testimony at her Senate Banking Committee confirmation hearing Tuesday.