Receiving Wide Coverage ...
She’s back
President-elect Joe Biden plans to nominate former Federal Reserve Chair Janet Yellen, “an economist at the forefront of policy-making for three decades, to become the next Treasury secretary, ” the Wall Street Journal reported. “If confirmed by the Senate, Ms. Yellen would become the first woman to hold the job. Ms. Yellen, who was the first woman to lead the Fed, would become the first person to have headed the Treasury, the central bank and the White House Council of Economic Advisers.” A formal announcement isn’t expected to occur before Nov. 30.
“She is viewed by Biden transition officials as a credible authority on the dangers of prematurely withdrawing government stimulus and as someone who could collaborate closely with the Fed and executive-branch agencies to engineer more support if Congress is reluctant to take additional action.”
“The likely choice of Ms. Yellen, 74, will cement her status as one of the top U.S. policymakers of her generation, given her previous role as chair of the Federal Reserve, president of the San Francisco Fed, and chair of the White House council of economic advisers under Bill Clinton,” the Financial Times said. She “will bring a steady hand and a well-known figure to the tiller of the American economy, but her nomination also reflects his desire to finely balance demands from the moderate and progressive wings of the Democratic party.”
“While Ms. Yellen is not the type of firebrand nominee some progressives might have hoped for — she has warned that the United States is borrowing too much money, a fact that some liberals count against her — she has paid consistent, careful attention to inequality and labor market outcomes, even when doing so earned her backlash from lawmakers,” the New York Times said.
“If confirmed, Yellen would bring decades of experience as a regulator and economist to the crucial post, although she has never worked at the Treasury Department,” the Washington Post commented. “She would have a rare public service resume for a treasury chief, having served as Fed chair, president of the Federal Reserve Bank of San Francisco and a top economic adviser to President Bill Clinton. She was confirmed to lead the Fed in 2014 by a vote of 56 to 26. Eighteen senators didn’t vote.”
Wall Street Journal
Join the crowd
It hasn’t been a great year for banks, but that hasn’t stopped companies from wanting to become one. “Consumer lender Oportun Financial on Monday filed paperwork to start its own bank in California, joining a wave of firms that have applied for banking licenses during a recession that has punished banks’ core businesses and forced them to set aside tens of billions of dollars to cover soured loans.”
“Ten companies filed applications for a new national bank charter in the fiscal year through Sept. 30, according to the Office of the Comptroller of the Currency. That is the most in a single fiscal year since 2010. Oportun’s filing is the second in the OCC’s current fiscal year, which started on Oct. 1.”
Financial Times
Auditor’s immunity
Ernst & Young, the principal auditor of failed German payments company Wirecard, “has reached a deal with German politicians to give its auditors protection from the legal risk of giving evidence at a Wirecard inquiry and warned its staff to prepare for more fallout from hearings taking place this week. The German parliamentary inquiry committee has called several senior managers from the Big Four firm to give evidence at its inquiry into the high-profile collapse of the payments group.”
“Wirecard’s administrator has released EY partners from all confidentiality obligations but, in the past, some German courts ruled that such a waiver was not sufficient. According to people with direct knowledge of the matter, the parliamentary inquiry committee and EY informally agreed to seek a clarification from Germany’s federal court of justice to allow EY staff to reveal previously confidential details about their work for Wirecard without breaking any rules.”
New York Times
No more coins?
“A funeral for cash has not yet been scheduled, but the pandemic has made it much easier to imagine a world without coins, and already reinvigorated the movement to get rid of pennies. For banks, credit card companies and some Bitcoin advocates, the demise of each unit of cash would be welcome news. For small businesses that rely on coins, it’s a slow-rolling earthquake. For archaeologists and collectors, it’s bittersweet at best and a tragedy at worst.”
Elsewhere
Midas touch
JPMorgan Chase “has earned record revenue of around $1 billion so far this year from trading, storing and financing precious metals, vastly outperforming rival banks,” Reuters reports. The bank’s revenue “by mid-November accounts for at least half of the $1.7 billion to $2 billion that the top 10 investment banks combined will make this year from precious metals, mostly gold,” according to McKinsey CIB Insights.
JPMorgan’s commodities division “is on track to bring in more than $1.5 billion this year and could challenge Goldman Sachs for the title of top earner.”
Quotable
“She’s walking into a nightmare. People are going to be getting evicted, losing their houses, and state and local governments are facing disastrous situations. These are horrible problems, but Yellen has been around so she knows both her economics and Washington. If there’s a way to get through this, she’s as good as anyone.” — Economist Dean Baker, on the expected nomination of Janet Yellen to be President-elect Biden’s Treasury secretary.
