Despite posting disappointing third quarter results, HSBC’s interim CEO Noel Quinn “is acting the part of the permanent CEO. He has promised to deliver in February new targets and a plan to overhaul the business," the Wall Street Journal reports. "That assumes he is still in charge. Announcing the plan with the full-year results in February gives Mr. Quinn time to impress the board before any CEO announcement. If he delivers an ambitious and decisive action plan to reshape the HSBC quickly, he might yet persuade board chairman Mark Tucker — and investors — that he is the man for the job.”
“Quinn, who was installed as interim chief executive in August following the ousting of John Flint after just 18 months, is hoping he can succeed where his predecessors failed,” the Financial Times says. While the plan to reshape the bank hasn't been fully fleshed out, Quinn intends "to reduce assets in Europe and the U.S., either by" divestiture or "by shrinking its operations" and to cut costs base by eliminating “some of the complexity,” the paper says.
Wall Street Journal
Privatization goals
The director of the Federal Housing Finance Agency “for the first time released formal objectives” for the return of Fannie Mae and Freddie Mac to the private sector. Speaking at the Mortgage Bankers Association’s annual convention in Austin, Mark Calabria provided the two firms with policy goals “to help lay the groundwork for their own transitions” after 11 years of government conservatorship.
“Many specific policy details remain to be ironed out over the coming weeks and months, such as how much capital the firms must raise once they eventually leave government control," the paper says. "Still, Monday’s outline gives the companies a loose set of guidelines they must meet before they can return to private-shareholder ownership.”
“The goals the FHFA laid out in a new strategic plan include having Fannie and Freddie focus on their core mission of fostering competitive and sustainable housing markets, ensuring that the GSEs operate in a safe and sound manner, and preparing the companies to be released from federal control,” American Banker reports.
Mortgage market boom
The recent drop in interest rates sent the mortgage market soaring. “Lenders extended $700 billion of home loans in the July-to-September quarter, the most in 14 years. Mortgage originations for the full year are on pace to hit their highest level since 2006, the peak of the last housing boom,” the paper says.
“Falling interest rates spurred homeowners to trade higher-rate mortgages for lower-rate ones to save on monthly payments. Refinancings kept mortgage lenders busy, though home sales haven’t recovered as much as economists expected. A decline in mortgage rates often takes longer to boost home purchases than refinancing because people need to shop for a home first. That could mean a few more months of improving sales as buyers who were drawn back into the market by lower rates continue to close on their purchases.”
Bitcoin bounce
Bitcoin prices surged over the weekend after President Xi Jinping “said China should speed up research into blockchain, the open-ledger system that cryptocurrencies rely on.” Bitcoin, which was “trading just below $7,500 before Mr. Xi’s comments were made public,” jumped above $10,000 last Friday evening before settling back to $9,370 on Monday morning. “The price has more than doubled this year but remains below its high of near $20,000 in December 2017.”
A pile of golden coins - bitcoin cryptocurrency, realistic 3d illustration
Artur Kamalov/eranicle - stock.adobe.com
Kay Hagan dies
Kay Hagan, a former vice president at NationsBank and a one-term U.S. Senator, died Monday at the age of 66. Hagan was a vice president in the estates and trust division at NationsBank before winning a seat in the North Carolina state Senate in 1998. A decade later she unseated Elizabeth Dole for a U.S. Senate seat, although she lost her re-election bid to Thom Tillis in 2014.
Financial Times
Double trouble
One of the investment bankers charged in the U.S. last week with being part of a “wide-ranging international insider trading ring … was previously arrested in the U.K. three years ago in connection with a similar investigation.” Darina Windsor, a former banker at Centerview Partners, who “currently resides in Thailand and is considered a fugitive,” was arrested in 2016 “by London’s Metropolitan Police on behalf of the U.K.’s Financial Conduct Authority in connection with ‘an offence of insider dealing under investigation.’”
Success from failure
While efforts to create Libra may not succeed, it will prompt central banks to develop faster payments systems, the paper says. “As ill-designed as it was and as ill-fated as it now seems, Libra has global economic officialdom terrified," the paper says. "And that has led to central bankers thinking of ways that they can pull their socks up. While Facebook’s currency looks destined for failure — if the public sector does not rise to the challenge, then someone else will.”
Quotable
“Real change has begun, and we are finally building momentum for lasting mortgage-finance reform.” — Federal Housing Finance Agency director Mark Calabria, announcing formal objectives for the return of Fannie Mae and Freddie Mac to the private sector
Median growth among small U.S. lenders was 1.2% for the third quarter. Bankers are hoping lower interest rates will boost demand, but borrowers aren't jumping.
The Knoble, a nonprofit that brings banks, credit unions, payment networks and law enforcement together to detect elder and child exploitation and human trafficking, has worked with more than 600 banks.
The president-elect had billed his hardline stance on the border and promised deportations as a solution to tight housing markets. Experts say those policies, at least in terms of housing, could do more harm than good.
Industry observers say the U.S. securities industry's migration to next-day settlement in May 2024 was a technology success story, which has encouraged the U.K. and the EU to follow suit.
