Receiving Wide Coverage ...
Wider settlement: Wells Fargo said it will expand its previously announced settlement of a class action lawsuit over its phony accounts scandal to include customers going back an additional seven years. The bank will now offer compensation to customers hurt by the bank's sales practices as early as May 2002. The expanded settlement will add $32 million to costs, raising the total payout to $142 million. Wall Street Journal, Financial Times, American Banker
Wells still has to face shareholders at its annual meeting Tuesday, and it's not looking good for some bank directors. "As of Sunday, votes already placed had left several directors at risk of losing re-election," the Wall Street Journal reports. While nonexecutive Chairman Stephen Sanger doesn't appear to be in danger of losing his seat, Enrique Hernandez, head of the bank's board risk committee, "is vulnerable." Some large institutional investors aren't expected to place their votes until Monday.
"If directors get less than 80% of the vote for re-election, it would send a clear message to the San Francisco bank that shareholders are seeking bigger changes after its sales-practices scandal," the Journal says.
Two shareholders, in a BankThink article, argue for a "rigorous review" of the bank's practices and a plan to address shareholder concerns.
Wells Fargo isn't the only bank facing a shareholder revolt. According to the Financial Times, many of Credit Suisse's shareholders are upset over compensation paid the bank's top managers, despite the bank's executive board agreeing to a voluntary 40% cut in bonuses. Why? The bank failed to take into account last year's $5.3 billion settlement with the U.S. over the sale of toxic mortgage securities when deciding on the bonus amount. Urs Rohner, the bank's chairman, said the criticism from investors "was more than I expected."
Wall Street Journal
At the helm: Former BlackRock executive Craig Phillips, a Hillary Clinton donor, "has emerged as a central figure in [President] Trump's understaffed Treasury Department, helming the administration's plan for financial deregulation and serving as a key point of contact with the financial industry."
Transparency: Goldman Sachs is rolling out a new employee review system in which workers can get ongoing feedback from their managers and peers. Edith Cooper, Goldman's head of human capital management, told the paper the goal is to supplement the bank's annual review process. "Our employees want to know where they stand at all times," a memo to employees said.
Patience: "Blockchain has the potential to transform our economic and social systems, but such a transformation is still many years away," Irving Wladawsky-Berger, an IBM employee for 37 years and a strategic advisor to Citigroup, writes in an op-ed. "Like the internet, blockchain is a foundational technology, whose adoption process is gradual, incremental and steady. Foundational transformations must overcome many barriers – technological, organizational, governance, political – which is why they take a long time to play out."
A report from Allied Market Research has a different, and more bullish take. It says blockchain usage is expected to grow to $5.43 billion by 2023, up from just $228 million last year, a compound annual growth rate of 57.6%. North America is expected to generate the most revenue, with financial services and the supply chain industry the earliest adopters.
Not your usual banker: The paper profiles Bob Wilmers, chairman and CEO of M&T Bank in Buffalo, whom it describes as "an 83-year-old cheapskate with an air of grandeur." According to the article, Wilmers, who has been with the bank for more than 30 years, "stuffs his office with accouterments from his award-winning vineyard in France's Bordeaux region; rides to work on a decrepit bicycle with mismatched tires; and lambastes whomever he believes is threatening his bank or small-business customers, be it the government for overreach or private-equity firms for greed."
"To the extent you consider me unusual, there's nothing unusual about the bank," says Wilmers. "We just try to be good at what we do."
New York Times
Maybe cash isn't so bad: "Only a sucker would pay with concrete, tangible, material cash. Especially when there are so many forms of money available that, simply by using them earn us more money," writes cultural critic Lee Siegel in a piece entitled, "Cash is King No More." However, he warns, there could be a big price to pay for that attitude. "The process of indebting ourselves is so stylish, so convenient, so fun when we use our gadgets, and so far removed from the actual, physical process of handing over money for merchandise or services, that we don't in any way feel part of a cold transaction. It is all too easy to lose a fortune."
Quotable ...
"In too many of these organizations, there are rewards for cheating and punishments for calling out the cheaters. As long as that's the case, the biggest financial institutions will continue to put their customers and the economy at risk." – Sen. Elizabeth Warren, D-Mass.
