Wall Street Journal
Hitting the brakes: Commercial banks are cutting back sharply on auto lending just as car sales are starting to slow, "raising fears the slump might deepen," the paper reports. Wells Fargo, for example, one of the biggest lenders, said its auto loan originations dropped 29% in the first quarter compared to the year-earlier period, the biggest decrease in at least five years. Other large lenders also reported steep declines. While most of the falloffs are occurring in lending to riskier borrowers, some banks are also cutting back on loans to prime customers.
"It's been an overheated sector," Fifth Third CEO Greg Carmichael said. "The auto business just isn't as attractive right now."
Movin' out: JPMorgan Chase said it will move between 500 and 1,000 jobs out of London as the bank prepares for the U.K.'s exit from the European Union. Most of the jobs are expected to be shifted to Dublin, Luxembourg and Frankfurt. The bank said it will re-evaluate its plans after the two-year Brexit negotiating period ends, at which time it may move even more jobs if necessary.
Tough to kill: Opponents of the so-called fiduciary rule on retirement accounts are finding it hard to kill, despite President Trump's perceived support of their position. "Yet people on both sides of the debate say the rule, which requires stewards of tax-advantaged retirement savings to act in clients' best interests rather than their own, may survive both a 60-day delay in the compliance deadline and the regulatory review process relatively unscathed."
Insurers rebound: American International Group reported first-quarter net income of $1.19 billion, reversing a $183 million net loss in the year-earlier period. MetLife, Prudential Financial and Lincoln National also reported improved first-quarter operating profits. "The quarter was characterized by solid investment gains and higher fees from equity-based products, buoyed by a surging stock market, partly offset by tough competitive conditions," the paper said.
Comptroller change: As expected, the Trump administration replaced Comptroller of the Currency Thomas Curry with banking lawyer Keith Noreika, who will serve as the acting comptroller. Joseph Otting, a former chief executive of OneWest Bank, is expected to be nominated for the permanent position, which requires Senate confirmation.
Considering a Home: Home Capital Group, the embattled Canadian mortgage company that is facing a run on deposits, has held talks with potential buyers. Interested acquirers include U.S. and Canadian financial investors possibly interested in the company's C$25 billion of mortgage assets.
The human cost of AI: Artificial intelligence is projected to eliminate 230,000 jobs in the capital markets industry over the next seven years, with asset managers likely to take the biggest hit, about 90,000 jobs worldwide, according to a study by Opimas LLC, a research and consulting firm. Job gains from AI are likely to total only 30,000, mostly in technology and data management.
Cyber defense help: The American Institute of CPAs is expected to release a guide to help accountants provide an independent assessment of their clients' cybersecurity risk management. AICPA's initiative, called the Cybersecurity Risk Management Reporting Framework, is meant to augment what many businesses are already doing on their own to protect themselves from hackers.
Financial Times
Whistleblower protection for all: British branches of foreign banks will be required to follow the U.K. Financial Conduct Authority's whistleblowing rules. Employees of those branches will be expected to report what they believe is corporate wrongdoing to the FCA or its sister regulator, the Bank of England's Prudential Regulation Authority.
Quotable ...
"We've seen traders replaced by algorithms and naturally now we're seeing that flow to those actually managing funds." – Axel Pierron, founder and managing director of Opimas
