My bad: Barclays CEO Jes Staley apologized to the bank's shareholders at its annual meeting, admitting that he tried to uncover the identity of a whistleblower. "I feel it is important that I acknowledge to you, our shareholders, that I made a mistake in becoming involved in an issue which I should have left to the business to deal with. I have apologized to the board, and I would today like to apologize to you as well, for that error," he said. Financial Times, New York Times
Several shareholders called for Staley's firing. But the bank's chairman John McFarlane, who has not been shy in the past about firing top executives, stood by his CEO. Staley may have "gone through a red light," he acknowledged, but "when you go through a red light you don't lose your license."
James "Jes" Staley, chief executive officer of JPMorgan Chase & Co.'s investment bank, speaks during an interview in New York, U.S., on Monday, Dec. 19, 2011. JPMorgan Chase & Co. still views U.S. Treasuries as the world's safest asset and expects that view to continue, Staley said. Photographer: Scott Eells/Bloomberg *** Local Caption *** James "Jes" Staley
Scott Eells/Bloomberg
"You know me. If I believe he should go, you know he would go," McFarlane said.
While Staley may think that winning 97% of the votes cast at the meeting "was a ringing endorsement of his leadership of the bank," the FT notes about 14% of shareholders abstained. "In the language of investors, that means a fair few Barclays' holders are unsure that Mr. Staley exudes the right tone from the top," the paper commented.
In other Barclays news, the Securities and Exchange Commission said the bank will pay more than $97 million to resolve claims it overcharged clients by nearly $50 million. The allegations concern the bank's American wealth management business, which was sold to Stifel Financial in 2015.
AXA spinoff: French insurance company AXA said Wednesday it plans to sell a minority stake in its U.S. operations, including its American life insurance unit and AllianceBernstein, its asset management business. The move follows the firing two weeks ago of AllianceBernstein CEO Peter Kraus and the majority of the unit's board of directors. Wall Street Journal, Financial Times, New York Times
Woe is Wells: Wells Fargo is reportedly investigating three of its senior vice presidents in Chicago who may have inappropriately steered business toward certain people in its private-banking unit. The three executives were suspended as the bank looks into the matter. According to the Wall Street Journal, the three executives may have "steered Wells Fargo clients toward certain individuals within Wells Fargo's private-banking unit and away from other employees, such as brokers, who may have been better equipped to handle certain client needs."
Separately, Wells Fargo CEO Tim Sloan is scheduled to hold an invitation-only "special investor day" in San Francisco with some of the bank's major investors. The Financial Times looks at some of the big questions Sloan will need to answer at the meeting.
Wall Street Journal
Alone: In his first interview since taking the job three days ago, acting Comptroller of the Currency Keith Noreika told the paper "the nation's main national bank regulator could act on its own to give banks relief from the Volcker rule trading ban."
Branching out: The Consumer Financial Protection Bureau is looking to broaden its regulatory reach beyond consumer financial products and services and into small business lending. The agency has launched an inquiry into whether small companies, specifically those owned by women and minorities, have sufficient access to credit, a move that raises some concern among bankers.. If the agency does decide to move forward, "it could have a significant impact on online lenders, many of which cater to small-business customers," the paper noted. But "whether the CFPB could eventually roll out a brand new rule is uncertain, given efforts by Republican lawmakers and the White House to curb its authority."
In another CFPB matter, it looks like an attempt by some Senate Republicans to kill the agency's new rule requiring increased disclosures and protections on prepaid cards has run short of support and time. The prepaid card regulation, rolled out in October, is now set to go into effect in April 2018.
Leveraged: HNA Group, the Chinese conglomerate that has emerged as Deutsche Bank's biggest shareholder, paid for a large part of its nearly 10% stake in the German bank by borrowing to "protect itself against potential losses on the position," the paper reported. "Bankers and analysts said the disclosures suggest a heavier reliance on financing than they would consider typical for most large investors building a similar holding," the paper said.
Home repairs: The Senate Banking Committee has begun behind-the-scenes work on how to restructure Fannie Mae and Freddie Mac.
The Jackson, Mississippi, company will use proceeds from the sale of its Fisher Brown Bottrell Insurance unit to restructure its investment portfolio, moving $1.6 billion of low-yield securities off the balance sheet.
The store-branded card issuer is raising annual percentage rates and adding fees for paper statements to compensate for lost revenue. The Consumer Financial Protection Bureau's new regulation is scheduled to take effect on May 14.
At the banks' annual meetings, shareholders at both companies struck down proposals that would have split the board chair and CEO roles. Two other proposals also failed to win shareholder support, one concerning energy financing and another on pay gap analysis.
Congressional Review Act resolutions are ramping up ahead of the 2024 election cycle. Experts say that, although none are likely to become law, the resolutions are still powerful messaging and political tools.
The ABA is testing an information-exchange network to allow banks to share their fraud data with each other. Companies including Baselayer are also building solutions.
Republicans on the House and Senate Small Business committees are accusing the SBA of being irresponsible in granting Funding Circle permission to participate in its flagship loan-guarantee program.
