Wall Street Journal Filling the roster: President Trump will nominate Jelena McWilliams, Fifth Third Bancorp’s chief legal officer, as chairman of the Federal Deposit Insurance Corp. She previously served as a lawyer at the Federal Reserve and on the Republican staff of the Senate Banking Committee. Her nomination “moves Mr. Trump closer to rounding out a team that can carry out his promise to revisit financial regulations adopted under President Barack Obama,” the paper says.
Dark cloud: Randal Quarles, the Federal Reserve’s vice chair for bank supervision, cautioned against widespread use of bitcoin and other digital currencies. A virtual currency “has no intrinsic value, is not the liability of a regulated banking institution, and in leading cases, is not the liability of any institution at all,” he said in prepared remarks for a fintech conference sponsored by the Federal Reserve Bank of Cleveland. He said he was particularly concerned about the stability of the financial system, noting, “a central-bank-issued digital currency that’s held widely around the globe could be the subject of serious cyberattacks and could be widely used in money laundering and terrorist financing.” And with the discussion of cybercurrencies escalating, American Banker asks: Is it time for bankers to rethink bitcoin?
Randy Quarles, managing director of The Cynosure Group, listens during a Bloomberg Television interview in New York, U.S., on Friday, Nov. 20, 2015. Quarles discussed private equity investing, Federal Reserve policy and corporate tax reform. Photographer: Chris Goodney/Bloomberg *** Local Caption *** Randy Quarles
Chris Goodney/Bloomberg
Separately, the Fed said it ended an enforcement action against Brand Group Holdings, a small Georgia bank in which Quarles had been an investor. The firm had signed an agreement with the Fed five years ago to fix its credit risk management practices and other issues, which it has. Quarles wasn’t involved in the decision to terminate the enforcement action, and he divested himself of his investment in the bank before joining the Fed.
Maxed out: Store credit cards are being hit by a double-whammy: the decline of shopping malls as well as increasingly generous rewards from general purpose credit cards. Leading issuers of the cards are trying to fight back by expanding their reach. Synchrony Financial, for example, the biggest retail card issuer, recently agreed to buy consumer loans from PayPal, while No. 3 Alliance Data “is adding more online-only merchants to its stable of mall and other brick-and-mortar store cards.”
“But few analysts expect the traditional store-card niche to reverse its long decline any time soon,” the paper says. “Some investors are betting that the standalone card issuers will be among the most vulnerable financial firms the next time the economy tips into recession.”
Financial Times Are two heads better than one?: Lloyd Blankfein said after he retires it’s possible Goldman Sachs could move back to having co-chief executives, a structure it had before it went public 18 years ago. “That can work if it works and people get along, but it doesn’t necessarily have to work,” the lone CEO said. “So I would say that it’s not a guarantee.” Harvey Schwartz and David Solomon are currently co-presidents and co-chief operating officers and considered the leading contenders to succeed Blankfein.
It’s good to be king: UBS CEO Sergio Ermotti “lashed out” against bank regulators’ efforts to reduce bankers’ pay, which he said is due to envy. “I think this discussion is made by people who are maybe frustrated that they do not make that kind of level of money,” he said at the paper’s annual banking summit.
Washington Post He's got the power: White House budget director Mick Mulvaney, who is now also acting director of the Consumer Financial Protection Bureau, has become “one of the most powerful bureaucrats in the country,” the paper says. “At the CFPB, he can single-handedly cut the agency’s budget and decide whether to proceed with or drop investigations into big financial firms.” He also gains a seat on the Financial Stability Oversight Council, which oversees the world’s largest financial institutions.
Quotable “While these digital currencies may not pose major concerns at their current levels of use, more serious financial stability issues may result if they achieve wide-scale usage.” — Federal Reserve vice chair for bank supervision Randal Quarles.
The Federal Reserve chair said there are no economic indicators calling for rapid rate cuts. He also addressed Fed independence, the impact of Trump's economic agenda and more.
Rep. Matt Gaetz, R-Fla., whose chances of getting confirmed as attorney general are unclear in the wake of allegations of sex trafficking and a House ethics probe against him, cuts a more populist profile than many expected from a Republican president.
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Agriculture lenders expect more than a third of their borrowers to lose money this year, a development that could result in credit quality deterioration and impacts on banks' bottom lines.
