Receiving Wide Coverage ...
More cuts: Wells Fargo is planning to slash costs by $3 billion, on top of the $2 billion it has already announced, the Financial Times reports. "Managers at Wells are already accelerating branch closures and squeezing discretionary spending, including travel and consultancy budgets, as part of a clamp down on costs. Marketing and finance are among several departments being streamlined."
Warren Buffett finally opened up about Wells' handling of its phony accounts scandal. Speaking at Berkshire Hathaway's annual meeting over the weekend, he said, the bank "incentivized the wrong type of behavior" and failed to act quickly enough when the scandal came to light. Buffett, whose Berkshire is the bank's largest investor, owning just under 10% of the outstanding shares, had been largely silent on the scandal.
Wall Street Journal
A penny saved...: You don't have to give a lot to get a lot, apparently. According to the paper, Bank of America "is the stingiest of the big U.S. banks. But its depositors don't seem to care." B of A paid an average of 0.08% on its interest-bearing deposits last year, about half what its biggest competitors paid, but still increased deposits by $33 billion.
Third time the charm?: Although the Securities and Exchange Commission has denied applications for two bitcoin-based exchange traded funds, a third one isn't giving up so easily. The Bitcoin Investment Trust last week doubled the proposed maximum size of the fund to $1 billion, and added Credit Suisse to the underwriting group. "The Bitcoin Investment Trust differs from the other proposed bitcoin ETFs in one key respect: it is already on the market," the paper notes. "It trades on an over-the-counter exchange, under alternative reporting standards, and is available to accredited investors."
London falling?: Goldman Sachs CEO Lloyd Blankfein says London's role as a financial center could "stall" following the U.K.'s exit from the European Union. "If you cannot benefit from the access to the EU from the U.K. the risk is there will be some adjustment that will cause some people to have a smaller footprint in the U.K.," he said. However, he said Goldman hopes to be able to conduct its European business as close as possible to the way it does now once Brexit happens.
Stuck in neutral: The Heard on the Street column says Lending Club "seems stuck in the doldrums, and investors are running out of patience." Despite beating first-quarter earnings expectations and raising its full-year forecast, the company's shares fell more than 5% Friday morning. "The fundamental issue is a lack of growth," the column says, and "concern over consumer credit quality has been the constraining factor on loans."
I'm right: Sen. Dick Durbin, D-Ill., defends the Dodd-Frank Act amendment that bears his name, which capped the amount banks could charge for debit card fees. "Repealing the Durbin Amendment would let big banks and card companies get away with charging Main Street billions more in unnecessary fees," he writes in response to a Journal op-ed piece last week that called for the amendment's repeal. "The law has succeeded in bringing competition, choice and lower fees to the debit-card system to the benefit of consumers and small businesses."
Still hope: An "emerging consensus among Wall Street bankers, lawmakers and regulators" now seems to agree that President Trump won't be able to do a "big number" on Dodd-Frank, as he promised. "Instead," the paper reports, "bankers are switching their deregulation hopes to a changing of the guard of U.S. bank supervisors, who have considerable scope to loosen the shackles on banks within the bounds of existing law." Even without wholesale changes to the law, "regulators who write and implement the rules required by Dodd-Frank can still ease the burden on banks."
Diluted: Goldman Sachs said the Federal Reserve has granted it extra time to sell "substantially all" of its $6.2 billion of "illiquid" investments, including private equity and hedge funds. "For critics, the regulatory concession is the latest example that [the Volcker rule] has been watered down," the FT reports.
New York Times
Looking back: Former Comptroller of the Currency Thomas Curry, who was replaced last week after five years at the agency, discusses his tenure and the challenges that lie ahead for banking regulators under President Trump.
Missed chance: The Financial Choice Act, passed last week by the House Financial Services Committee, "misses a big opportunity to change the [credit] ratings industry for the better," columnist Gretchen Morgenson writes. "What's especially odd about the Choice Act, given that it was written by lawmakers with a deregulatory and free-market bent, is that it would keep the existing agencies entrenched and protected from competition."
Going wrong: The Trump administration is "making student loans riskier, more expensive and more burdensome for borrowers," according to Susan M. Dynarski, a professor of education, public policy and economics at the University of Michigan.
"If there's a major problem, the CEO will get wind of it. At that moment, that's the key to everything. The CEO has to act. The main problem was they [Wells Fargo officials] didn't act when they learned about it." – Warren Buffett