Positive: Credit Suisse said it plans to raise 4 billion Swiss francs ($4.02 billion) in new capital and scrap plans to sell a stake of its Swiss unit as its first-quarter earnings beat expectations. "The upbeat earnings come as a welcome reprieve for the Swiss banking giant, which has been beset by steep losses and uncertainties over its longer-term strategy as it scales back from volatile, but sometimes very profitable, investment banking and moves toward the more predictable business of managing money for wealthy clients," the Wall Street Journal commented. Wall Street Journal, Financial Times, New York Times
Receiving Wide Coverage ...
Survivors: All of Wells Fargo's 15 directors won reelection at the company's "contentious" and "raucous" annual meeting on Tuesday, but some just barely made it, even though they were running unopposed. While CEO Timothy J. Sloan won support from 99% of the shares voted, nonexecutive chairman Stephen Sanger got only 56% and Enrique Hernandez, the head of the bank's risk committee, received only 53%. None of the others seeking reelection got more than 80% of the vote.
"While the re-election of directors is a relief for the bank, the fact that a majority of directors received less than three-quarters support is concerning and suggests Wells Fargo directors may face pressure to make more changes in coming months," the Journal commented. Directors typically receive more than 95% of the votes cast, it noted. Indeed, the "yes" vote, as thin as it was for some directors, may not be the end of it. "There is a serious question as to whether any of the directors who received less than 60% of the vote can stay on," Harvard Law School professor Howell Jackson told the Financial Times. Wall Street Journal, Financial Times, New York Times, American Banker
The mood was a lot friendlier at Citigroup's annual meeting, where shareholders cast 95% of their votes in favor of the bank's executive compensation plan, overwhelmingly rejected a breakup proposal, and voted 98% in support of the directors.
Wall Street Journal
Halted: Banks still view bitcoin exchanges as risky and doing business with them could run afoul of anti-money-laundering laws. Three such exchanges told customers they couldn't process deals in dollars, the paper reports. "J.P. Morgan Chase & Co. prohibits banks it transacts with from dealing with virtual-currency exchanges," the paper says, referring to an internal document it has seen. One exchange official said, The banks "close one account, we open another somewhere else. It's a battle, but it looks like one that we appear to be losing." The Securities and Exchange Commission last month turned down two proposals for bitcoin-based exchange-traded funds, but now it said it will review one of those rejections.
Too hot? Some economists and real estate agents are starting to worry the U.S. housing market is overheating. "A dearth of new construction and strong demand from buyers are pushing up prices twice as fast as the rate of income growth, the latest data show, a level economists said is unsustainable," the paper reports.
Making matters worse, the Trump administration's proposed 20% tariff on Canadian lumber could have a big impact on American home builders, who are among the biggest customers of the wood, the Journal reports. That could add several thousand dollars to the cost of building a typical home. "Someone's paying for this: Either I'm paying for it, or the homeowner is paying for it," said Scott Laurie, president and CEO of Olson Co., a home builder in Southern California.
Apps for the masses: The latest financial technology innovations aren't aimed at high-net worth individuals or other wealthy people "looking to allocate 401(k) retirement accounts" but the larger number of people who are struggling from paycheck to paycheck just to get by, the paper reports. The new apps help people save money, pay bills and cope with the ups and downs in income at a time of "volatile household incomes and widespread economic insecurity."
On hold: The Basel Committee on Banking Supervision said it will pause new policy initiatives until 2019 so it can assess the impact of reforms made since the global financial crisis.
New lobbyist: Stephen Jones, a former Santander and Barclays executive, has been appointed head of the newly created UK Finance, a conglomeration of six banking-related trade groups, including the British Bankers' Association.
Blockchain lab: The European Commission plans to launch an "EU Blockchain Observatory" to advise the EU on blockchain and other distributed-ledger technologies. The project would be given a €500,000 budget over the next two years to build technical expertise and regulatory capacity.
"In the U.S. we don't really have an access-to-banking problem. The bigger issue is: Can we use technology to help people better manage their financial lives?" – Jennifer Tescher, president of the Center for Financial Services Innovation