Receiving Wide Coverage ...
JPMorgan's kicking itself
JPMorgan Chase “made a rare public apology” following a “ferocious outcry” over plans to create a European Super League, which the bank agreed to front with $4 billion in financing, The Wall Street Journal reported. The proposed league of 12 of the wealthiest teams blew up just days after it was announced.
“We clearly misjudged how this deal would be viewed by the wider football community and how it might impact them in the future,” a spokesman for the bank said. “We will learn from this.”
“The bank was instrumental in the creation of the Super League by committing to underwrite a €3.25 billion grant which, in effect, provided the start-up funding to rebel clubs to launch the breakaway contest,” the Financial Times said. “London-based debt bankers at JPMorgan were central to the planning of the Super League and had been working on the project for several years.”
“JPMorgan had come under intense criticism from fans and others merely for participating in the plan,” The New York Times noted.
Fuming
“Some of Credit Suisse’s largest shareholders will attempt to remove the board member in charge of risk oversight, in protest at twin scandals that have cost the bank and its clients billions and tarnished its reputation,” the FT reported. “Andreas Gottschling — a 53-year-old German who has served as chair of the risk committee since 2018, earning a $1 million annual fee — has come under fire after the Swiss bank lost at least $4.7 billion from the collapse of family office Archegos. That came shortly after Credit Suisse had to suspend $10 billion of supply-chain finance funds linked to controversial financier Lex Greensill, whose insolvency could cost the lender’s clients as much as $3 billion.”
Credit Suisse’s $5.5 billion hit from Archegos has “entered the big leagues of bank losses,” the Journal said, rivaling JPMorgan’s London Whale scandal and Nick Leeson’s unauthorized trades that led to the 1995 downfall of Barings Bank. “For Mr. Leeson, Credit Suisse’s willingness to continue working with [Archegos head Bill] Hwang after he was barred [from the securities industry] shows bankers are still susceptible to short-term decision-making fueled by the prospect of quick profits and bonuses.”
Wall Street Journal
Plastic recycling
“It may be out of habit or sentiment, or the simple laziness of not wanting to do the work of finding a new perfect match, but many people hold on to their first credit card for years. The average age of an open credit card account is eight to nine years, according to Experian.” That can be costly in terms of missed rewards. The Journal offers tips on how to switch to a better card.
Losing its luster?
The weekend plunge in bitcoin to below $50,000, “a decline of more than 20% from its record of $64,829 on April 14, underscored the fragility of bitcoin’s recent advance.” That could be a sign that the rally is “running out of steam, at least for now.”
“Bitcoin’s momentum lately has been showing signs of flagging. Since bitcoin crossed $60,000 in March for the first time, its pace of gains has slowed and it has traded in a relatively narrow range. That was a sign that the rally could falter, as it finally did over the weekend.”
Financial Times
Libor strife
“The process of finding practical ways to replace” the London interbank offered rate, the “scandal-tinged benchmark, has led to increasingly audible shouting and blame trading between the major dealing banks and the Fed, along with the central bank’s entourage of agencies, academics, policy wonks and whisperers,” an FT op-ed says.
“Ending the use of dollar Libor, the bank funding rate, was always going to be problematic. This is not over.”
Travel plans
“Europe’s largest banks are planning to slash business travel permanently by as much as half from pre-pandemic levels after the coronavirus crisis recedes, as many of the new ways of remote working developed during lockdown become the norm.”
