Treasury unveils ‘Chapter 14’; JPM plans new home

Receiving Wide Coverage ...

A new Chapter: The Trump administration is proposing a “Chapter 14” bankruptcy process for financial firms that would shield taxpayers from having to foot the bill in a bank failure. The plan unveiled by the Treasury Department Wednesday would make the process “the resolution method of first resort.” While many of the proposed reforms could be done through the regulatory process, the bankruptcy proposal would require action by Congress. Wall Street Journal, Financial Times, American Banker

Andrew Harrer/Bloomberg

Really rebuilding: JPMorgan Chase said it plans to tear down its current headquarters at 270 Park Ave. in New York City and replace it with a 2.5 million square-foot building. The skyscraper is expected to house 15,000 employees and consolidate offices from various locations. The current facility was designed for about 3,500 workers.

“We are recommitting ourselves to New York City while also ensuring that we operate in a highly efficient and world-class environment for the 21st century,” JPM Chairman and CEO Jamie Dimon said. Wall Street Journal, Financial Times, New York Times

Turnaround promised: Barclays reported a £1.9 billion ($2.64 billion) net loss for full year 2017, compared to a £1.6 billion profit the previous year. Nevertheless, CEO Jes Staley pledged to more than double dividends this year, saying his turnaround plan is about to pay off. “For the first time in five years the bank begins 2018 with a clear operating model,” he said. Wall Street Journal, Financial Times

Wall Street Journal

Banks sued: The Federal Deposit Insurance Corp. is suing 16 large banks — including Bank of America, Citigroup, Credit Suisse and JPMorgan Chase — to try to recover funds for Doral Bank, the Puerto Rican bank that failed three years ago. The agency said the banks’ collusion to fix the Libor rate hindered Doral’s competitiveness by breaching swap contracts they had with the failed bank.

Defense mode: MetLife is fighting off lawsuits from “unexpected problems popping up” in its decades-old structured-settlement annuity business. The insurance company is being accused of not paying people who were due money or paying the wrong people. The company has already publicly acknowledged that it failed to pay benefits to 13,500 retirees whose pensions it assumed many years ago.

Moving on: Peter Tague, Citigroup’s co-head of mergers since 2012 and “one of the most senior deal makers on Wall Street,” is leaving the bank. The business will continue to be run by the unit’s co-heads, Mark Shafir and Cary Kochman. It wasn’t immediately known what Tague’s next move is. Tague was instrumental in boosting Citi’s ranking among advisers last year to fourth place and the division’s revenue to $311 million, the second-highest ever.

Financial Times

You say you want a revolution: Asset managers could save $2.7 billion a year by shifting to blockchain “the laborious manual practices involved in buying and selling funds,” which could “revolutionize” the process, technology company Calastone says.

Quotable

“The bankruptcy reforms that we propose will make the shareholders, management and creditors of a financial company bear any losses from its failure. The policy of this administration is clear: we will not tolerate taxpayer-funded bailouts.” — Treasury Secretary Steven Mnuchin.