Why Cordray needs to go; a rift in bitcoin land

Receiving Wide Coverage ...
How ironic: The decision by the U.K.’s Serious Fraud Office to charge former Barclays CEO John Varley with fraud in the bank’s dealings with Qatar to avoid a government bailout during the financial crisis “means the only high-profile chief executive to face prosecution for the events of 2007-08 will do so not for bringing down a bank — but trying to save one,” the Financial Times notes.

“Whether Barclays fights the charges or pleads guilty will be a complex gamble for current management,” the Wall Street Journal reports. Besides Varley, several other former executives and the bank itself were charged with fraud.

Wall Street Journal
Let us count the ways: The editorial page editors say a recent Treasury report gives President Trump plenty of reasons why Consumer Financial Protection Bureau Director Richard Cordray needs to be given “the heave ho.”

Andrew Harrer/Bloomberg

Windfall: Custody or trust banks, such as Bank of New York Mellon and State Street, are poised to be among the biggest winners from the Trump administration’s deregulatory agenda, the Heard on the Street column says. Rather than making loans, like traditional commercial banks, custody banks mostly invest in safe, liquid assets like Treasury bonds, or hold cash on deposit with the Federal Reserve. Under the proposal it announced last week, the Treasury Department would exclude those types of assets when calculating the banks’ total leverage. “If the change goes through, it would be a windfall to the custody banks,” the column says, since a large percentage of their assets would be freed.

Separately, American Banker reports custody banks are turning to artificial intelligence and robotics to help their clients plow through the “massive amounts of data that mere mortals can’t handle effectively.”

Back to school: Secretary of Education Betsy DeVos plans to appoint A. Wayne Johnson, a former senior executive at Visa and Deloitte and CEO of First Performance Global, a financial technology startup, as chief operating officer of the federal student aid program. “Dr. Johnson, who went back to earn his Ph.D. in educational leadership in his 60s, appears to have done his homework for the job,” the paper says. “He wrote his dissertation on the weaknesses of the decision-making process students go through before they borrow tens of thousands of dollars to pay for college.”

Staying relevant: Visa sees a future where consumers “interact less with physical banks and cash registers” if they choose, the paper reports. Since the beginning of last year, the company has created about 60 major application programming interfaces to facilitate payments, and has hired 2,000 new tech workers to work on developing APIs.

“Visa has had to think beyond traditional payments to maintain its relevancy, especially in an era where digital and physical worlds are constantly colliding,” the paper says.

Civil war: A “calcifying rift” is growing between two competing camps in the bitcoin world. On one side are those who want the virtual currency “to act more like a digital version of gold, a commodity with a limited supply that can be held as a store of value,” the paper reports. “The opposing camp wants bitcoin to look more like a currency, a unit that can be used to settle transactions.” The rift “could result in it being split into separate, competing coins.”

Quotable
“There is more federal protection in place when you buy a car then there is when you sign up to take on student debt. It comes down to basic consumer protection.” — A. Wayne Johnson, prospective chief operating officer of the federal student aid program in the U.S. Department of Education.