Wall Street Journal
Keep it simple: Three banking regulators told Congress they are developing a plan that would simplify capital rules for small banks, "sending a signal that they will be making the rules easier for local lenders to follow," the paper reported. The changes proposed by the Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency will address capital rules affecting commercial real estate, mortgage servicing and other areas.
Introspection: Wells Fargo plans to survey all of its 269,000 employees about its culture as it continues to deal with last year's sales scandal. The bank said it is working with an unnamed academic "who specializes in this area" to conduct the 20- to 30-minute surveys, which will start in May. "Our goal is to uncover our culture's positive attributes and its potential weaknesses, so our leaders can understand how best to foster an ethical, inclusive, and customer-focused culture," CEO Chief Executive Timothy Sloan told the company's employees. The bank will also use an ad campaign to try to boost its image.
Citing the Wells Fargo scandal, Federal Reserve Bank of New York President William Dudley said banks must make more progress on changing their culture. "The public sector must continue to shine a spotlight on the issue, and the industry must continue to demonstrate that it is taking responsibility for its culture," Dudley said in prepared remarks for a Banking Standards Board event in London.
He also said bankers should admit their own mistakes if they want to improve their internal cultures, adding that transparency in ethics and culture findings should be encouraged.
Rocky road: Auto lenders are facing a bumpy road ahead. Defaults are rising at the same time used-car prices are falling, which makes leasing less profitable by lowering the residual value of the car when the lease ends.
Japanese car makers, which have been among the most aggressive in leasing vehicles, stand to get hit the worst. Leases account for about 30% of sales at Toyota, Honda and Nissan. "The problem so far isn't with customers defaulting on leases but with the recovery value the finance companies get when they sell the vehicles after the lease term," the Journal reports.
Still the king: JPMorgan Chase retained its crown as the world's biggest investment bank by revenue last year, "after making particularly strong gains in equities, including derivatives, prime brokerage and futures and options," according to industry monitor Coalition. Total global investment bank revenues fell 3%. Looking ahead to this year, George Kuznetsov, head of research at Coalition, forecasts an overall increase in revenues in the single digits.
Movin' out: Two of the world's biggest investment banks are firming up plans to move some of their operations out of London as Brexit is set to begin next week. Richard Gnodde, chief executive of Goldman Sachs International, told CNBC the bank has begun implementing its contingency plans, while Morgan Stanley President Colm Kelleher said his company would "certainly" have to move some people out of London over the next two years as Brexit negotiations proceed. "You may see some business gravitating back to New York," Kelleher said.
"There was a serious mismatch between the values Wells Fargo espoused and the incentives that Wells Fargo employed. It is sufficient to note the powerful role — for good or for bad — that incentives can play in an organization." — Federal Reserve Bank of New York President William Dudley