Receiving Wide Coverage ...
New frontier
JPMorgan Chase “is launching a digital bank to offer consumer banking services in the U.K. for the first time,” the Wall Street Journal reported. “The new bank will bear the Chase brand and has already hired 400 people in the U.K. and plans to add more as it grows. The digital bank is currently being tested internally with JPMorgan employees ahead of a public launch later this year. It will start by offering current accounts and then offer a broader range of products including loans, according to a person familiar with the situation.”
“JPMorgan enters a crowded digital marketplace in the U.K. for consumer banking. The market has flourished as regulators encouraged new startups, including Starling Bank and Monzo Bank, to boost competition in the wake of the last global financial crisis. These so-called challenger banks have forced traditional lenders to improve their digital offerings but have struggled to earn profits.”
The effort “makes JPMorgan the second Wall Street firm to make a foray into the U.K. market in recent years, following the launch of Goldman Sachs’ Marcus business in 2018,” the Financial Times said. “JPMorgan’s early plans are more ambitious than Marcus, which has been limited to savings accounts in the U.K. It said on Wednesday it would start by offering ‘a new take on current accounts.’”
“JPMorgan itself has had a presence in Britain for more than 160 years, but only as a commercial lender, investment bank and asset manager,” the New York Times said. “That lack of a consumer operation has meant that American employees of JPMorgan who moved to Britain had to open accounts at lenders like HSBC. Few of JPMorgan’s American rivals have a retail banking operation in Britain, aside from Citigroup and Goldman Sachs’s Marcus arm.”
Wall Street Journal
Breathing room
President Biden’s freeze on new federal regulations “pauses controversial amendments to anti-money-laundering rules proposed by the Treasury’s Financial Crimes Enforcement Network, or FinCEN, and the Federal Reserve Board. That would give financial institutions and industry groups more time to study the proposals and submit feedback.”
Ant heeled
Ant Group “is planning to turn itself into a financial holding company overseen by China’s central bank, responding to pressure to fall fully in line with financial regulations.” The move will subject the company “to more stringent capital requirements.”
“The plan represents a significant turnaround by a digital-payments juggernaut that has in recent years tried to shed its image as a financial-services provider and fashion itself as an internet-technology company, which helped it command lofty valuations. Before its blockbuster initial public offering was called off in November, Ant had been on track to go public at a valuation north of $300 billion, well above the market capitalizations of the world’s biggest banks.”
Failure to communicate
The pandemic has helped Apple, Google and Samsung “to get more shoppers to use their digital wallets. Some 46% of people surveyed by S&P Global’s 451 Research said the pandemic prompted them to use mobile wallets and other contactless payments more often or for the first time in-store.”
“Problem is, many shoppers and cashiers have no idea how to use them. Even those who do find the major brands are still not accepted at the U.S. stores of some big retailers like Walmart, Home Depot and Lowe’s.”
Financial Times
Triumphal return
The board of UniCredit, Italy’s biggest bank, “voted unanimously” to name Andrea Orcel as its next CEO. He is scheduled to start in April.
“The decision marks the return to the center stage of finance for one of Europe’s best-known bankers after his ill-fated attempt to become chief executive of Spanish lender Santander in 2018. Mr. Orcel has been given time by UniCredit in order to reach an agreement with Santander over a €112 million lawsuit he brought against the Spanish lender after it withdrew its offer to hire him” as its CEO.
Early warning
“Nine eurozone banks have taken advantage of the European Central Bank’s permission to eat into their capital buffers as part of its effort to encourage lenders to keep credit flowing during the coronavirus crisis. The number of banks falling below the ECB’s overall capital requirements and guidance increased from six the previous year, the central bank said on Thursday.” The ECB did not name the banks.
“There is an embedded level of distress in loan books that is not yet fully evident,” the ECB warned.
New York Times
Tripped up
Thousands of hard-hit small businesses looking to get a second loan from the Paycheck Protection Program “have been ensnared by what the Biden administration said are significant errors in the program’s loan records, such as inaccurate loan amounts or loans that were canceled before being disbursed. Those errors have complicated efforts by some borrowers to obtain second-round loans.”
“The problems came to light in part because of new fraud checks the Small Business Administration imposed before it began approving applications for the new funding round. The SBA said it would provide lenders with additional guidance and resources for resolving troubled cases.” The agency said it found “anomalies” in 4.7% of the 5.2 million loans made through the program last year.
Clearing the air
Two of the most senior “Federal Reserve officials downplayed the chance that they would use their power as bank overseers to actively discourage investment in carbon-heavy companies, setting out a boundary line in an evolving conversation about what role the central bank should play in dealing with the fallout from global warming.”
“We would note that it has long been the policy of the Federal Reserve to not dictate to banks what lawful industries they can and cannot serve, as those business decisions should be made solely by each institution,” Fed chair Jerome H. Powell and Randal K. Quarles, the vice chairman for supervision, said.
“Mr. Powell and Mr. Quarles said the Fed makes sure the institutions it oversees are well-prepared to handle risks they face, including climate-related risks. But they indicated that they were not rolling out climate stress tests or using their supervisory powers to pressure banks to meet climate-related goals — big concerns among Republicans.”
Washington Post
That’s the plan
Rep. Marcia L. Fudge, President Biden’s nominee as HUD secretary, is expected to say at her Senate confirmation hearing Thursday that she “plans to focus her tenure on bolstering fair housing protections, expanding access to affordable housing and, most urgently, providing rental assistance to households at risk of eviction, according to her written testimony.”
Quotable
“Our decision to launch a digital retail bank in the U.K. is a milestone, introducing British consumers to our retail products for the first time. This new endeavor underscores our commitment to a country where we have deep roots, thousands of employees and offices established for over 160 years.” — Daniel Pinto, JPMorgan Chase co-president, on the launch of the new bank.
