Receiving Wide Coverage Battered: Amid a global freefall in stocks, Wells Fargo’s share price plunged more than 9% on Monday, its first day of trading following last Friday’s announcement by the Federal Reserve that it was banning the bank from increasing its asset base for the foreseeable future. The drop was nearly twice as steep as the 4.9% decline in the KBW Nasdaq Bank Index and the 4.6% drop in the Dow Jones Industrial Average. The bank’s market capitalization fell by $29 billion.
The New York Times looks into how Wells reached a deal with the Fed on its punishment, which also forced it to replace four of its directors. American Banker looks at what the penalties mean for other banks.
Cryptocurrency hearing: The chairmen of the Securities and Exchange Commission and the Commodity Futures Trading Commission are scheduled to testify Tuesday before the Senate Banking Committee and are expected to ask Congress to impose stricter federal oversight on cryptocurrency trading. “The currently applicable regulatory framework for cryptocurrency trading was not designed with trading of the type we are witnessing in mind,” according to SEC Chairman Jay Clayton’s prepared remarks. Wall Street Journal, New York Times, American Banker
Bitcoin fell below $6,000 on Tuesday and has now lost 70% of its value since hitting a record high of near $20,000 in December.
British banks are debating whether they should prohibit their customers from buying cryptocurrencies using their credit cards. Lloyds and Virgin Money have imposed such a ban, following similar moves at most of the largest American credit card issuers. Barclays and RBS said they are reviewing their policies.
Wall Street Journal Sworn in:Jerome Powell was sworn in as Fed chair on Monday, succeeding Janet Yellen. The oath was administered by Randal Quarles, the Fed’s vice chair for supervision.
Monday’s “ugly” market drop “is a signal of the trouble Mr. Powell may have unwinding a decade of Fed interference with bond markets to boost risk assets,” the paper editorializes.
Separately, economist Lawrence Lindsey has withdrawn his name from consideration for vice chair of the Fed. Lindsey was a top economic adviser to President George W. Bush and was an informal adviser to the Trump campaign in 2016.
Washington Post Still looking: Democrat lawmakers on Capitol Hill were up in arms after a Reuters report said the Consumer Financial Protection Bureau was dropping its investigation into last year’s massive data breach at Equifax. The agency denied the accusation. “As noted previously, the Bureau is looking into Equifax’s data breach and response,” it said. (But did the CPFB punt to begin with? That's the question American Banker asks, and the answer's not so simple.)
Mick Mulvaney, director of the Office of Management and Budget (OMB), pauses while speaking during a White House press briefing in Washington, D.C., U.S., on Thursday, July 20, 2017. Mulvaney has called Trump's tax-cutting approach to the economy MAGAnomics, a spin on Trump's campaign slogan, "Make America Great Again" and has repeatedly attacked the Congressional Budget Office (CBO) for its estimates on the impact of Republicans' plans to repeal and replace Obamacare. Photographer: Andrew Harrer/Bloomberg
Andrew Harrer/Bloomberg
Quotable “Cryptocurrencies are almost a perfect vehicle for scams. The combination of credulous buyers and low barriers for scammers were bound to lead to a high level of fraud, if and when the money involved got large. The fact that the money got huge almost overnight, before there were good regulatory or even self-regulatory models in place, made the problem acute.” — Kevin Werbach, a professor at University of Pennsylvania’s Wharton School.
Acting CFPB Director Russ Vought has managed to neuter the Consumer Financial Protection Bureau through a series of actions. Senate Banking Committee Chairman Tim Scott, R-S.C., played a major role by cutting funding in half.
Federal Reserve Chair Jerome Powell said there was a "high degree of unity" among committee members during this week's Federal Open Market Committee vote. Out of 12 FOMC members, 11 voted for a 25 basis point cut.
The Federal Open Market Committee's decision to reduce interest rates for the first time in nine months lifted bank stocks Wednesday. The 25-basis-point reduction could lead to net interest income headwinds now, but loan growth later, analysts said.
Community Financial in Syracuse has made its biggest investment ever in an outside company, taking a $37.4 million equity stake in an insurance provider that focuses on the rental housing market.
The two BNPL giants' pay-over-time loans will now be available for in-store purchases on Apple Pay in a move to capture more sales at brick and mortar stores.
