Receiving Wide Coverage ...
The bigger they are…: Before the hack of its computer network was announced two weeks ago, CEO Richard Smith had “transformed Equifax from what he once described as a staid, slow-growing credit-reporting company into a data giant,” buying up companies all over the world and boosting the company’s market value to nearly $18 billion, more than four times what it was when he took over 12 years go.
“The breach upended it all,” the Wall Street Journal reports, with its market cap falling by nearly a third since then as the company faces “heated criticism from angry consumers, politicians and its own customers.”
Ironically, much of Equifax’s growth was built on its promise to safeguard customers’ most sensitive information. “It even sold products to help companies hit by cyberattacks protect their customers.” the New York Times notes. “Data breaches are on the rise. Be prepared,” the company said in one pitch. “You’ll feel safer with Equifax.”’
The Times’ “Your Money” columnist Ron Lieber says he’s received about 2,000 “enraged” messages from readers since the hack was announced. While lots of them called for Smith’s head, “the messages also reflected something I had not seen before, not even after the scandals at Wells Fargo and Volkswagen, even though those companies committed similarly egregious offenses,” Lieber writes. “It was a sense of helplessness, the recognition that we are at the mercy of an industry that makes money off our data, treats us with disdain and answers to no one.”
American Banker Editor-in-Chief Rob Blackwell says Smith can learn a lot about what not to do in handling his company’s crisis by reviewing how former Wells Fargo CEO John Stumpf testified before Congress following last year’s phony accounts scandal at the bank.
In the wake of the Equifax hack, Fair Isaac Corp. CEO William Lansing says the breach was a wake-up call for the credit-scoring company. Since the breach, FICO has increased spending on cybersecurity and hired a new chief information security officer.
Maybe next time: The Financial Stability Oversight Council did not announce plans to remove the “systemically important” label from American International Group, following its meeting on Friday, which disappointed some investors. “Neither, however, did the body explicitly confirm the designation. That suggests the FSOC did not reach a decision, and indicates the insurer could yet have a chance of the label being removed at another meeting,” the FT says. Wall Street Journal, Financial Times
Wall Street Journal
Cash or no cash: The paper presents two sides of the debate on doing away with cash. “Supporters say that would crimp criminal activity, among other benefits, because criminals rely so heavily on cash transactions,” it notes. “But others worry that the impact on people who depend on cash for legal activities would be too high a price.”
Cause for worry?: Lending to highly indebted companies in the U.S. and Europe is surging, with leveraged loan volume up 53% in the U.S. so far this year, the paper reports. That puts it on a pace to top the previous record of $534 billion in 2007, just before the global financial crisis, and has some investors concerned. “Even though default levels are currently low, and global growth has been picking up, the lending boom could prove troublesome when market conditions change or the economy slows,” the paper notes.
Hello, Poland: JPMorgan planning to announce its intention to build a global operations center in Warsaw, which would create 2,500 jobs. “The world’s largest bank, one of the most dynamic, will actually set up a base [in Poland],” Mateusz Morawiecki, Poland’s deputy prime minister, said. “It’s like a little Mercedes in the services sector.”
“The move marks a significant expansion for JPMorgan in Poland,” the FT says, noting the bank currently has only a few employees in the country. The new operations center will serve clients from both Europe and Asia.
The blockchain — which is not just bitcoin — is the most important invention since the internet. I’m not sure if that’s consensus among Silicon Valley now, but it’s getting there.” — Balaji Srinivasan, CEO and cofounder of 21 and a board partner at Andreessen Horowitz.