Next up at Goldman; Amex readies steep cuts in pricing

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Will he stay or will he go?: Wall Street was abuzz Friday following a Wall Street Journal report that Goldman Sachs CEO Lloyd Blankfein is preparing to step down as soon as the end of the year after 12 years at the helm. “The timing of any moves could still change, and the 63-year-old Mr. Blankfein is firmly in control of his exit,” the paper cautions. His successor is likely to be one of Goldman’s two co-presidents, Harvey Schwartz or David Solomon.

(Update: The papers are reporting that Solomon has come out ahead in that showdown, with Schwartz announcing plans to step down next month. New York Times, Wall Street Journal, Financial Times.)

The Financial Times says there may be growing pressure on Blankfein to retire soon so that more senior executives and prospective successors don’t leave the firm, impatient for a chance to advance. “Under the surface there is bubbling dissatisfaction among some Goldman employees — about the succession and the direction of the firm,” it says. “Some say the culture has changed too much; in other ways, it has obviously changed too little. The criticism of the succession is partly that the field has thinned dramatically.”

while it has been assumed Blankfein would leave "in the next couple of years," no timeline has been set, although that may change as a result of the report, the New York Times claims.

Gary Cohn, Goldman’s former president and one-time heir apparent who left the firm last year to join the Trump administration as chief economic advisor — and who announced his resignation from that post last week — is probably not in the running.

Chris Liddell, a former executive at Microsoft and General Motors, is said to be in the hunt to replace Cohn in the White House. Importantly, he has the support of Jared Kushner, the president’s son-in-law and senior adviser. Wall Street Journal, New York Times, American Banker

But not everyone is a fan. Liddell is “without strong free-market views [and] unlikely to counter the growing clout of the antitrade corporatists in the Administration,” the Journal notes in an editorial.

Civil war: The Dodd-Frank rollback bill that the Senate is expected to pass sometime this week is creating a big divide among Democrats. According to the Journal, the bill pits “centrists up for re-election this year in red states, who support what they say would help smaller banks in their home states, against liberals seen as presidential contenders in 2020, who say the measure would inject more risk into the financial system overall.” Wall Street Journal, Financial Times

Wall Street Journal

Hype or hope?: Three takes on blockchain are offered by the paper. The technology “has yet to cross the chasm from technology enthusiasts and visionaries to the wider marketplace that’s more interested in business value and applications," writes Irving Wladawsky-Berger, a regular contributor to the paper’s CIO Journal. "Blockchain today is roughly where the internet was in the mid-late 1980s: full of promise but still confined to a niche audience.”

But technology columnist Christopher Mims warns readers not to get distracted by all the hype surrounding cryptocurrencies and initial coin offerings. “All that noise has obscured the bona fide efforts involving the underlying technology, blockchain,” he writes. “It’s the most seemingly mundane applications of blockchain that could lead to the biggest and most concrete changes in all of our lives. This means new ways of transferring real estate titles, managing cargo on shipping vessels, mapping the origins of conflict materials, guaranteeing the safety of the food we eat and more.”

Indeed, a separate story shows adoption of blockchain may be closer than you think. A few universities and technology companies are developing “trustworthy, quickly verifiable digital diplomas and résumés” using blockchain. In fact, the Massachusetts Institute of Technology recently issued digital diplomas based on blockchain to all of its February graduates.

Third time’s not the charm: Deutsche Bank top executives will not get bonuses for a third successive year after the bank reported a third consecutive full-year loss. However, the bank’s 2017 employee bonus payout will be more than triple the previous year’s total.

Financial Times

Making the cut: American Express is planning to cut the fees it charges merchants to accept its cards by five or six basis points this year, to about 2.37%, the largest reduction in two decades and about double the company’s previous guidance. That works out to about $585 million in lower margins, the paper reports. The fee cuts “are the latest sign of competitive and regulatory pressures on the biggest U.S. consumer finance company by market value.”

All in one: HSBC will become the first major British bank to launch a banking app that consolidates all of a customer’s information, including accounts held with competing lenders. The app is designed to take advantage of new rules designed to increase competition and make it easier for customers to switch providers.


“People have long underestimated the cost of accepting cash. Now we see sellers realizing that cash isn’t free.” — Jesse Dorogusker, head of hardware at Square, about the number of businesses that are choosing not to accept cash.

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