Wall Street Journal
Continuity: Federal Reserve Chair Janet Yellen said she expects continuity at the Fed when it comes to bank regulation after she leaves the central bank in February. Speaking at what is likely to be her last press conference after the Fed raised interest rates Thursday, Yellen said she sees "broad-based commitment" to those "core reforms," such as stress testing and bank capital requirements.
Trimming: Wells Fargo said it laid off about 60 employees in its big mortgage unit, including about 40 people in compliance and 20 in originations. But the bank is looking to hire more than 1,500 people in other areas. The unit employs about 268,000 people across the country.
New game in town: Weary of modest returns in commodity markets, some traders are turning to bitcoin to make a big score, regardless of the risks. "With volatility and interest in commodities dwindling, some traders say they can't afford to lose out on the bitcoin frenzy, even if the nascent market is rife with risks," the Journal reports. "As bitcoin has sped through sudden gains and drops, traders used to wild swings in commodity prices are trying to reap profits in cryptocurrencies."
The start of bitcoin futures trading this week has created renewed interest in an exchange-traded fund linked to the cybercurrency, with several funds planning to file for ETFs. "A futures-based ETF structure has a better chance to win regulatory approval than previous structures designed to own bitcoin directly," the Journal said, noting that the Securities and Exchange Commission denied applications for such ETFs earlier this year.
The volume of money raised from initial coin offerings has jumped past $4 billion so far this year, up sharply from just $225 million last year, according to Autonomous Research.
Failing grades: The number of Americans in default of their student loans for at least a year has doubled in the past four years to about 4.6 million borrowers, with about 22% of them severely behind on their payments, up from 17%, according to the Department of Education. In dollar terms, defaulted student loans totaled $84 billion at the end of the third quarter, or 13% of the $631 billion that borrowers are required to be paying down. Total student debt owed to the government is now at $1.4 billion.
"The rise in defaults comes despite a strong labor market and carries long-term consequences for borrowers and the economy," the Journal commented. "Defaulted borrowers risk damaging their credit and their ability to borrow for other things like homes and cars. That, in turn, could restrain the economy's growth."
Wake-up call: The massive data breach at Equifax earlier this year was a "defining moment" for corporate boards' need to oversee cybersecurity issues, the Journal reports. While the government regulates how directors handle financial disclosures, mergers and other business issues, there are no guidelines on how to address or report on cybersecurity protection or breaches.
Broken promises: Marketplace lending isn't delivering the returns investors had hoped for several years ago (witness the recent drop in Lending Club's stock price to an all-time low after it cut profit forecasts again). Nor is it living up to its early promise "to make brick-and-mortar banks redundant in the process," the FT says.
"Over the past few years billions of dollars of capital have flowed into online platforms," it says, "but dozens of platforms have come unstuck, as rising defaults cause equity investors to balk at providing more funding, and loan-buyers to seek better risk-adjusted returns elsewhere."
"All of my colleagues on the board have expressed a strong commitment to keep in place the core reforms that have produced a stronger financial system. I have not seen anything emerge at this point that I would describe as a significant difference." — Federal Reserve Chair Janet Yellen.