Receiving Wide Coverage ...
'A symbol of risk failures'
“Hours before the bank’s annual meeting Friday,” Credit Suisse “withdrew from re-election the head of its board’s risk committee after a protest vote by investors over the bank’s $5.5 billion loss from Archegos Capital Management,” The Wall Street Journal reported. Andreas Gottschling “was targeted as a symbol of Credit Suisse’s risk failures by some of its biggest investors, who had said they would vote against his re-election.”
Gottschling “has become the latest senior figure to depart from the Swiss bank as it reels from the twin crises at Greensill and Archegos Capital,” the Financial Times said.
Barclays profit surges
Barclays said its first-quarter net profit nearly tripled, “largely due to a sharp drop in new coronavirus-related loan-loss reserves, which fell to £55 million, “a far cry from the £2.1 billion booked at the start of 2020 when the world was bracing for the pandemic.” Wall Street Journal
Wall Street Journal
Sounds taxing
Financial institutions would be “placed at the center of an effort to curb unreported or misreported business income” as “part of the funding for President Biden’s $1.8 trillion American Families Plan.” The proposal “would require banks to report annual account inflows and outflows to the Internal Revenue Service. The requirement would also extend to peer-to-peer payment services such as Venmo.”
“The proposal is expected to face pushback from the banking industry, which in the past has been critical of the costs associated with additional compliance burdens. The level of pushback will depend on how resource-intensive it will prove for banks to comply.”
Heloc-hesitant
“Homeowners in the market for a home-equity line of credit might find them difficult to come by these days. Several large banks” — including Wells Fargo, JPMorgan Chase and Citigroup — “suspended the origination of these loans last year because of the pandemic and resulting economic uncertainty. But despite a recovering jobs market, robust housing market and a record amount of home equity available to tap, [these] banks haven't resumed originating Helocs.”
“But while other lenders have scaled back their Heloc programs, Bank of America Corp. continued to lend, albeit with tighter credit standards. Those standards have since been relaxed.”
See no evil
A report written for the U.S. Department of Education by a former JPMorgan Chase executive personally recommended by CEO Jamie Dimon says the U.S. student loan program “is facing a $500 billion hole,” rather than being the “moneymaker” the government says it is. The report, written by Jeff Courtney, the former head of the bank’s private student-loan unit, found that “over three decades, Congress, various administrations and federal watchdogs had systematically made the student loan program look profitable when in fact defaults were becoming more likely.”
“Biden officials never saw Mr. Courtney’s report, and have dismissed his project on grounds that they believe it was motivated by a political agenda by [former Education Secretary Betsy] DeVos to kill the student loan program. A spokeswoman for the Education Department said his analysis was also based on incomplete data.”
Financial Times
Cleared
“Danish prosecutors have dropped all charges against former top managers of Danske Bank including its ex-chief executive and finance director over a €200 billion money-laundering scandal that is one of the largest in the world. The news means that no person from Denmark’s biggest bank will be held criminally responsible in the Scandinavian country for a scandal that toppled the lender’s leadership, caused its share price to plunge, and opened it up to the prospect of large fines in the U.S. and many shareholder lawsuits.”
“A criminal investigation is still under way in the U.S., with Danske keen to settle it quickly. Danish prosecutors still have an open investigation against the bank itself for possible breaches of money-laundering legislation.”
Quotable
“If it is something that they already capture, it may not be such a big deal. But if not, I could see it adding significantly to their already considerable compliance costs and burdens.” — Dan Stipano, a former top attorney at the Office of the Comptroller of the Currency, about a Biden administration proposal that would require banks to report their business customers’ annual account inflows and outflows to the IRS.
