Treasury addresses reform; Can Amazon lend money safely?

Wall Street Journal

Report due: A Treasury Department report that outlines "a reassessment of a broad range of banking rules" could be released as early as Monday. The 150-page report, the Treasury's response to President Trump's February executive order to come up with a reform plan, takes "a more pragmatic path than some Republicans who want to throw out Obama-era financial rules wholesale, although administration officials are still seeking to loosen regulatory restrictions on banks in significant ways," the paper says.

The report "is harshly critical of the Consumer Financial Protection Bureau and recommends that the bureau be stripped of its authority to examine financial institutions," the article notes. The report also contains a big section on the Volcker rule, although it stops short of calling for a repeal, and recommends that banks with less than $10 billion in assets be exempt from it.

The future isn't now: "Invisible payments," which eliminate many, if not all, of the physical steps involved in paying for things, remain "in the early stages of adoption," fintech experts say. In addition, the customer base for such systems "will be very fractured for a long time," according to an American Express executive. Despite the attention of tech giants like Apple and Google, "the future is still very far in the future."

Financial Times

High returns for the common man: Low returns on savings accounts and fears of an overpriced stock market have "paved the way for peer-to-peer lending to emerge as a new asset class for investors wanting higher returns but with some more protection for their money," the paper reports. Investors can earn 6% to 7% on their money "with a degree of certainty that their money will be returned," it says. "The rise of peer-to-peer sites means that lending, which as an asset class has been a monopoly for the banks, is opening up to ordinary investors."

Eastward, ho!: Deutsche Bank Wealth Management is adding 100 managers globally to cater to the super-rich, with a particular focus on the Asia-Pacific region. The unit also plans to invest an additional €65 million in "digital capabilities" to reflect "new demographics in the business."

Time bomb?: Amazon's entry into the small-business lending market isn't likely to engender much sympathy for banks, the paper's editors say. "After a decade of financial scandal and billions of dollars of fines, few will care very much if ecommerce giant Amazon ramps up its loans business at the expense of banks."

But do non-financial companies like Amazon necessarily make smart lenders, especially when it comes to judging credit quality? "Amazon's $3 billion of loans are unlikely to cause it trouble," the editorial notes. "But in a decade's time? Too much money chasing too few borrowers tends eventually to result in poor lending decisions. Banks are cautious about lending to small businesses for a reason: they are risky." Amazon and other fintech companies may find that out, too.

New York Times

Lady in waiting?: The Breakingviews column says JPMorgan Chase "is by no means bereft of alternatives" to replace CEO Jamie Dimon "now that [COO Matthew] Zames is joining the exodus. Trouble is, none of them is an obvious candidate to run the bank long term."

One possibility, it says, is CFO Marianne Lake, "who has shone as finance chief and is well known to investors. She, though, has never run a major business. Handing her the reins to the chief investment office, which she will take over from Mr. Zames, is a start. If Mr. Dimon gives her a larger profit and loss to manage, it will send a strong signal that she is the next anointed one."

Not amused: Bank of America, along with Delta Air Lines, dropped their support of New York's Public Theater production of Shakespeare's "Julius Caesar" following "intense criticism" of the play, which presents "the assassination of a Trump-like Roman ruler." The bank said it would not support this particular showp but would continue its financial relationship with the theater.

Quotable ...

"Paying electronically with no card or no money has to be as easy as possible or people will think, 'Why bother?'" — Warren Yeh, a managing partner at Adapa Partners LLC, which invests in emerging technology firms