Candidates for next female big-bank CEO; what bodes for banking under Biden?

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Making progress

“Banking, long dominated by men, now outpaces other industries in promoting women, a point underscored last week when Citigroup named Jane Fraser as its next chief executive,” the Wall Street Journal reports. “The appointment reflects efforts at Citi and some other large financial services firms to put women in roles where they are responsible for big divisions’ profits and losses and get the broad experience needed to advance to the highest echelons.” But “despite Citi’s historic move, management experts say much work remains in closing the financial industry’s gender gap. ”

“Women being promoted to these positions, especially in industries where they are really breaking new ground, happens because of intentionality,” said Lorraine Hariton, chief executive of Catalyst, a research and advocacy group for more women in executive roles. “We still have a long way to go, but I think we’re moving in the right direction.”

The Journal and the New York Times look at “some of the leading female executives at Citi’s main rivals.”

Wall Street Journal

Deutsche in the dock

Two former Deutsche Bank traders go on trial this week “on charges related to rigging precious-metals prices using a strategy known as spoofing.” The case is “one of the biggest tests” in the Justice Department’s “crackdown on traders accused of the price manipulation” tactic, which “involves bluffing other traders into thinking supply or demand has changed.” The department “has lost two of three prior trials over spoofing.”

“Traders at Citadel Securities and Quantlab Financial, high-speed trading firms that use models to automate their buying and selling, are among the witnesses scheduled to testify against the ex-traders, James Vorley and Cedric Chanu.”

Separately, “a U.S. unit of Deutsche Bank paid a fraction of the maximum penalty it could have faced to settle alleged sanctions violations, as the Treasury Department pointed to the bank’s compliance efforts and cooperation as mitigating factors. Deutsche Bank Trust Co. Americas agreed to pay $583,100 in settlements resolving claims that it violated U.S. sanctions,” a fraction of the “$75 million maximum civil penalty the company could have faced. Details of the enforcement action outlined steps taken by the company and other mitigating factors that led to penalty reductions.”

A new use for pork bellies

Chinese banks have started to except hogs as collateral for loans to farmers. “With China’s pig herd still roughly 20% smaller than it was at the end of 2017” due to the swine flu epidemic, “authorities have prodded its mostly state-owned banks to find solutions. Last September, China’s banking regulator and its agriculture ministry urged banks and insurers to better support pig farmers, including by developing pilot programs using hogs as collateral.”

“In March, the ministry told banks to start accepting pigs, land-use rights and farming machinery as collateral. Since then, tens of millions of dollars have been put to use in pilot programs. In June, officials in Zhejiang, eastern China, said farmers in 32 of the province’s counties had borrowed a total 178 million yuan, the equivalent of $26 million, in loans backed by live hogs.”

Financial Times

Banks: Beware Biden?

“The prospect of a Joe Biden presidency — or, more to the point, a Democratic sweep of the presidency, the House and the Senate — should worry executives who run banks and anyone who invests in them,” an FT op-ed says. “If Joe and the Dems get their way, banks will be taxed more heavily and regulated more strictly than they are now. The question is how hard that political squeeze will be, and how it will compare to the pressures the banking industry is already facing.”

Dropping the ball?

The U.K.’s Financial Conduct Authority “has discontinued half of its criminal investigations into breaches of ... money laundering rules since January, and is yet to bring a single prosecution — despite a pledge to make full use of its powers.” So far this year, “seven out of 14 criminal investigations into contraventions of the money laundering regulations have been shut down. Five of these were ‘single track,’ or solely criminal, probes, while the other two were ‘dual track’ investigations that could have resulted in either criminal or civil proceedings.”

“As a result of these decisions, only one single-track criminal investigation is still being pursued — the other six are dual track and may result only in civil outcomes. Discontinuing the majority of its criminal cases means the FCA has less chance of securing a first prosecution under the money-laundering regulations, which its director of enforcement said it was seeking last year.”