Problem … for Sale
Ending "too big to fail"? Great. Establishing a systemic-risk council? Terrific. Contrary to popular belief that bankers oppose financial reform efforts, Robert P. Kelly, the chairman and chief executive of Bank of New York Mellon Corp., said he agrees with close to 90% of what's in the legislation being debated by Congress. What he really objects to, he said, is that the bill doesn't do more to get at what he considers the heart of the crisis: problems in the residential mortgage market.
Rather than focusing on standards for down payments or documentation, he complained, reform efforts are centered on hot-button topics like derivatives trading. "All of this stuff doesn't get to the real issue," Kelly said Monday at the Global Financial Forum, an annual confab in New York organized by BritishAmerican Business, Chatham House and the Foreign Policy Association, and held this year at Citigroup Inc.'s downtown offices.
Kelly also let slip in his remarks that he's in the market for a mortgage himself, and you've got to hand it to his hosts for noticing. After the panel, a woman with Citi's private bank gave Kelly a card and offered to help him with his housing finance needs.
A Whew at Wells
The stockholders are (less) restless.
Government and shareholder demands for independent oversight have remade the boards of banking giants including Bank of America Corp. and Citigroup, leading some corporate governance watchers to speculate that it was only a matter of time until such changes took hold at Wells Fargo & Co. As The Charlotte Observer noted last week, several of Wells' board members, while meeting the legal definition of independence, have ties with the company.
At last year's annual meeting, more than 31% of voting shares supported a proposal that would have required Wells to name an independent chairman. This year, several shareholder proxy advisers like Glass Lewis & Co. again urged the defeat of what it described as some subpar directors inherited from Wachovia Corp.
But the 16 board members were all approved Tuesday, none by margins under 70%. And the percentage of shareholders who would like to see Chairman and CEO John Stumpf usurped as chairman fell to 27%. Perhaps a 55% jump in Wells' stock since the last meeting helped.
All in the Family
Bank of America Corp. CEO Brian Moynihan's family is doing what it can to expand the company. He told attendees of the annual meeting Wednesday that his daughter last week opened her first bank account. A Bank of America spokesman said later that she opened a savings account and, as should be no surprise, it's with B of A.
