Receiving Wide Coverage ...
Profit booster: The lower corporate tax rate included in the Trump administration's tax reform proposal "should immediately boost banks' own profits," the Wall Street Journal reports. "Bankers expect some pain points, but are confident the benefits will outweigh them."
"Any fillip in economic growth could potentially help reverse a decline in business-loan growth experienced since late last year," the Journal noted. "Smaller banks could also reap bigger gains since they have relatively high effective tax rates." The Trump proposal also calls for retaining the deduction for mortgage interest, which would spare the home loan business.
But the proposal would do away with the deduction for "carried interest" that mostly benefits hedge funds and private equity managers. "The president made it clear to the tax writers in the Congress that that is his position," Gary Cohn, the head of the president's economic council, said on CNBC. "That was his position during the campaign and he continues to support the position that carried interest is one of the loopholes we talk about when we talk about getting rid of loopholes that affect wealthy Americans."
Wall Street Journal
Not yet ceding to our robot overlords: Count Morgan Stanley CEO James Gorman on the side of human financial consultants over robotic advisers. Although the company is piloting a robo adviser later this year as a low-cost option for clients with smaller portfolios, Gorman "is betting that most of the firm's 3.5 million clients will still want to talk to a live adviser, especially for questions on complex topics like estate planning and taxes," the Journal reports. "While technology can facilitate that relationship—through video chats, digital access and electronic trade processing—it won't replace it, he says."
SEC New York chief to leave: Andrew Calamari, the head of the Securities and Exchange Commission's New York office, is planning to leave the agency next month after 17 years. After joining the agency in 2000, he took over the New York office in 2012. He oversaw enforcement cases against Citigroup, among other firms.
Buy their love: The Journal's Heard on the Street column suggests Barclays—whose stock is down a "shocking" 13% this year compared to an 11% gain among European banks—should return capital to shareholders if it wants to regain their love, rather than invest it in "nonexistent" growth.
Difference of opinion: South Korea joined China in banning initial coin offerings, warning that penalties for violating the ban will be "stern."
In Japan, however, the country's Financial Services Agency granted licenses to 11 exchanges to trade digital currencies, while 17 others are being considered. The move "further solidifies the upstart currency's status in the world's third-largest economy," the Journal commented.
New York Times
Help from an unlikely source: A group of institutional investors holding the defaulted bonds of Puerto Rico's power authority are offering to help the hurricane-ravaged island rebuild its electrical system. The bondholders, including big mutual funds and hedge funds, have offered to lend Puerto Rico $1 billion to pay for immediate repairs and to forgive $150 million of outstanding debt. "Because of how it is structured, the proposal by the bondholders could help them even as it helps Puerto Rico," the Times said. Their offer would allow the commonwealth to apply for federal grants that would not have to be repaid.
Elsewhere
He won't stand for it: The owner of a Tennessee payday lender and pawn shop company said he is pulling his television advertisements during National Football League games to protest players not standing during the national anthem. Allan Jones said he is pulling all commercials for his companies Check Into Cash, Buy Here Pay Here USA, and U.S. Money Shops for the rest of the season.
Quotable
"Where judgment, trust, emotion play a big role…it's hard to imagine humans not being at the core of that. The more sophisticated the [client] the more they will need a human being in their relationships. People talk about 'digital' like it just arrived. It makes no sense to me at all." Morgan Stanley CEO James Gorman on the use of computers versus human financial advisers.
