Scharf’s first day at Wells Fargo; Zuckerberg readies to face the Hill

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A new day at Wells Fargo

The Charles Scharf era at Wells Fargo began on Monday. “Big changes could follow. Scharf, who previously ran Bank of New York Mellon and Visa, is the first outsider to run Wells Fargo in decades and the fourth person to lead the bank since a fake-account scandal in 2016 left its folksy image in tatters. The firm is still in hot water with overseers, who have curbed its growth and slapped it with fines. Scharf must also grapple with the more humdrum tasks of reversing revenue declines and cutting costs. Top regulators believe Scharf is likely to reshuffle the bank’s executive ranks. He is expected to review the firm’s business strategy, though he has said he needs to get to know the bank better before making any big decisions.”

Another of Scharf’s challenges will be trying to run “San Francisco-based Wells Fargo while keeping his home in New York.”

Facing the critics

Facebook CEO Mark Zuckerberg is scheduled to “make his case for Libra,” the company’s proposed cryptocurrency, before the House Financial Services Committee on Wednesday. “He will have to make it clear to the politicians that Libra presents opportunities, not just threats,” the Financial Times said. “It will be a tricky job — in part because of fundamental tensions at the heart of the project.”

“How it is possible to bring the great swell of unbanked onboard and at the same time satisfy all the sanctions compliance and money laundering rules that come along with transacting in the big currencies? If Zuckerberg can't convincingly answer that on Wednesday, the bankers' grim prophecies may well be proved right.”

Last week, in anticipation of the hearing, “Facebook executives fanned out in the capital to court lawmakers and regulators" on the project, the New York Times reports. Zuckerberg met with the committee’s Democrat chairwoman, Maxine Waters of California, and its ranking Republican, Patrick T. McHenry of North Carolina. David Marcus, who heads Libra, also met with committee members, and gave a speech at the World Bank and the Group of 30. “All told, Facebook has dedicated at least eight lobbyists to Libra since the project was publicly introduced in June.”

“But it’s not clear that the charm offensive is having much of an impact. While executives were knocking on doors in Washington, the Group of 7, representing some of the most powerful governments in the world, issued a highly critical report that warned about the potential dangers of cryptocurrencies.”

Separately, Ralph Hamers, the CEO of Dutch bank ING, told the Financial Times that “banks might have to cut ties with Facebook if the social media giant launches its Libra digital currency without fully addressing financial regulators’ money laundering fears.”

Wall Street Journal

Late stage money

PayPal founder Peter Thiel’s venture capital firm, Founders Fund, is looking to raise nearly $3 billion, “and in a switch from the company’s usual script, much of the war chest will be poured into the swelling ranks of technology startups that have stayed private for years. The push includes Founders’ first dedicated fund for late-stage companies, which the firm intends to use to plow new money into existing investments like payments business Stripe and data-analysis company Palantir Technologies.”

Making it permanent

Frank Nazzaro, Freddie Mac’s acting chief information officer, “is taking on the role permanently as the mortgage-finance company looks to digital technology to increase loan approvals for a wider group of qualified home buyers.”


Identity switch

Unicredit, Italy’s largest bank, is looking to become “less Italian” in order to try to “distance itself from its home country’s stagnating economy and fractious politics by putting some of its most prized assets under one roof in Germany.” CEO Jean Pierre Mustier will unveil on December 3 “a scheme to set up a new sub-holding company in Germany to house the bank’s foreign operations. By keeping its assets … away from Italy, UniCredit could reduce their Italian identity - and associated credit rating - making their funding cheaper. The new plan is an indication of Mustier’s belief that the Italian economy is holding back UniCredit’s share price and risks pushing up the bank’s funding even more if the economic outlook deteriorates.” Although UniCredit “operates in 14 countries and makes just over half of revenues outside Italy, it is still essentially perceived by investors as a risky Italian institution.”


“Even if we spent 10 years outreaching, you’d still hear the same thing.” — David Marcus, the head of Facebook’s cryptocurrency effort, about the company’s troubles explaining Libra to regulators and other critics.

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Consumer banking Cryptocurrencies Venture capital Marketing Charles Scharf Wells Fargo Facebook UniCredit Freddie Mac