Receiving Wide Coverage ...
Pulling the plug
Haven Health, the health care venture “launched with great fanfare by three of the world’s most prominent companies and their chief executives— Amazon.com, Berkshire Hathaway and JPMorgan Chase—is folding about three years after its founding, ” the Wall Street Journal reported. The joint venture, “sparked by an idea from JPMorgan CEO Jamie Dimon and supported by Amazon’s Jeff Bezos and Berkshire’s Warren Buffett, sought to ‘transform health care’ and reduce costs for hundreds of thousands of workers at the three companies by pooling resources and technology.” It will cease operations in February “without having achieved those aims.”
“Haven’s transformative ambitions proved too difficult to achieve, according to people familiar with the matter. Its shutdown attests to the challenges of making sweeping changes to the U.S. health care system and of bringing innovations to hundreds of thousands of employees around the country working at different companies, the people said.”
“Haven worked best as an incubator of ideas, a place to pilot, test and learn — and a way to share best practices across our companies,” Dimon wrote in a memo to the bank’s employees, according to the Financial Times. “Our learnings have been invaluable, and I look forward to working with all of you as we seek to make healthcare better, simpler and more affordable for all.”
“Two people familiar with the collaboration said logistical hurdles had made it harder than expected to come up with new ideas that made sense for all three companies,” the New York Times reported. “Berkshire Hathaway had a wide variety of systems for administering health care at the companies it owns, so across-the-board changes were difficult even internally. And JPMorgan funds its own health care plan for its employees, which posed a challenge to applying ideas that could work for Amazon and Berkshire Hathaway.”
“Haven demonstrated plenty of ambition when it debuted in 2018,” the Washington Post noted. “At the time, the three prominent executives put their names behind the effort, garnering massive media coverage for their efforts to address one of the most intractable challenges in corporate America. Reducing costs was a primary objective.”
Wall Street Journal
Too little, too late?
The Federal Reserve’s Main Street Lending Program, which “aimed to help pandemic-hit businesses that were too small to borrow in the bond market but might need more help than a small-business loan from the popular Paycheck Protection Program,” was “something it had never done before. Yet it struggled to find takers.”
“The experience revealed the limitations of running a relief program through the Fed and exposed gaps in the government’s ability to deliver aid to companies that can’t raise money on Wall Street. For months, many banks weren’t interested in participating. Demand picked up only in recent weeks after word came that the program would be ending.”
Up in the air
Banks have more to worry about than “stepped-up financial regulation” and “higher capital requirements” from the incoming Democratic administration. “This time around, a bigger long-term worry might be government efforts that could disrupt banking itself. There are a handful of measures either working their way through agencies or being discussed in Democratic policy circles aimed at broadening access to financial services, which could force traditional banks to compete more—either with the government, technology upstarts, or both in combination.”
“A combination of technological and political currents means the future of banking could be up in the air in more ways than one.”
Fined
The Treasury Department fined a French bank $8.6 million for processing payments for blacklisted Syrian financial institutions. “Union de Banques Arabes et Françaises, a Paris-based bank that facilitates trade finance between Europe and the Middle East, Africa and Asia, agreed to pay the fine to settle its potential civil liability for apparent violations of U.S. sanctions against Syria, the Treasury’s Office of Foreign Assets Control said Monday.”
“UBAF ultimately processed 127 transactions, totaling $2.08 billion, in apparent violation of the executive order, according to OFAC.”
New York Times
Auditioning?
Federal Reserve chair Jerome H. Powell “could find himself auditioning for his own job” this year. “His term expires in early 2022, which means that President-elect Joseph R. Biden Jr. will choose whether to renominate him. Mr. Powell, a Republican who was made a Fed governor by President Barack Obama and elevated to his current position by President Trump, has yet to say publicly whether he wants to be reappointed. His chances could be affected by the Fed’s coronavirus crisis response, which has been credited as early and swift.”
Quotable
“There was a program here that looked nice on paper, but in practicality, it has not worked.” — Mike Cazaz, CEO of Werner Aero Services, a New Jersey supplier of aircraft engines and parts, about the failure of the Fed’s Main Street Lending Program. His company was unable to get a loan under the program.
