Receiving Wide Coverage ...
May the best man win
Morgan Stanley “set up a four-way race to one day succeed Chief Executive James Gorman, elevating a number of senior executives into new roles as part of a broader management reshuffle,” The Wall Street Journal reported. “Ted Pick, who leads the firm’s investment-banking and trading businesses, and Andy Saperstein, the head of wealth management, were named co-presidents of the bank. Chief Financial Officer Jonathan Pruzan is moving into the role of operations chief, and Dan Simkowitz was given responsibility to help set Morgan Stanley’s strategy and execution alongside his job as head of investment management.”
“Mr. Gorman, 62, is one of the longest-serving CEOs on Wall Street, getting the top job at Morgan Stanley in 2010. He recently told Morgan Stanley’s board that he planned to stay in his post for at least three more years.”
“These changes represent the next evolution of leadership to ensure we have the right management in place to lead this firm in future decades,” Gorman told shareholders at the bank’s annual general meeting on Thursday, the Financial Times reported.
James Gorman and his counterpart at JPMorgan Chase, Jamie Dimon, this week “elevated potential replacements, but both will stay on for years,” the FT said. “In both cases, the two sexagenarians look set to extend their tenures at a time when the industry is facing new pressures from a younger generation of employees to move more quickly on environmental and sustainability issues, as well as clashing views on how bankers should return to the office after the pandemic.”
Let’s try this again
JPMorgan Chase “is trying again to transform U.S. healthcare, building a new unit that will work on health initiatives for its employees and invest $250 million in startups and technologies meant to make their healthcare more efficient and effective,” the Journal reported. “The unit, dubbed Morgan Health, aims to create a model of employer-sponsored healthcare that results in better and more equitable care at a lower cost.”
“JPMorgan, Amazon and Berkshire Hathaway in January shut Haven, a three-year-old joint venture set up to great fanfare with the aim of lowering costs and improving healthcare, first for their combined workforces and ultimately for the rest of the U.S., the FT noted. “The closure underlined the challenges of forcing change in the labyrinthine U.S. healthcare system.”
Colluders face the music
The European Union fined UBS, Nomura and UniCredit “nearly $450 million for illegally colluding on trades in European government bonds,” the Journal reported. “UBS took the biggest hit, absorbing a €172 million fine, equivalent to $208 million. Japan’s Nomura was fined nearly €130 million and Italy’s UniCredit €69 million.”
“Regulators found that traders at a total of seven banks provided each other with updates on their bidding strategies, prices and volumes in the run-up to auctions at which countries sold euro-denominated bonds,” the FT said. “The commercially sensitive information was shared in chat rooms on Bloomberg terminals between 2007 and 2011.”
“It is unacceptable that, in the middle of the financial crisis, when many financial institutions had to be rescued by public funding, these investment banks colluded in this market at the expense of EU member states,” the EU said.
Financial Times
Go green — or else
The Biden administration on Thursday “took the first step toward forcing a broad range of U.S. banks and companies to disclose the risks they face from climate change. In an executive order, the White House kicked off a sweeping initiative to bolster the U.S. financial system against climate-related risks.”
“The order instructs Treasury secretary Janet Yellen to work with the other members of the Financial Stability Oversight Council to report how they plan to ‘reduce risks to financial stability.’ The council, a body set up to monitor financial risks after the 2008 mortgage crisis, will work to improve climate-related financial disclosures to better measure their potential exposure, Yellen said.”
At the same time, Deutsche Bank CEO Christian Sewing warned his fellow lenders that they “ ’risk losing their license to operate’ if they fail to make green finance a priority. Germany’s biggest bank on Thursday laid out plans to increase its financing aimed at environmentally sustainable projects to about €220bn by 2023, two years earlier and 10% higher than its existing targets.”
“Sewing told investors that he also regards the bank’s push ‘as a unique opportunity to gain market share.’”
New York Times
PPP panic
The Paycheck Protection Program “is ending as it began, with the initiative’s final days mired in chaos and confusion. Millions of applicants are seeking money from the scant handful of lenders still making the government-backed loans. Hundreds of thousands of people are stuck in limbo, waiting to find out if their approved loans — some of which have been stalled for months because of errors or glitches — will be funded. Lenders are overwhelmed, and borrowers are panicking.”
“As the final cutoff for PPP lending nears, forgiveness for large-dollar loans continues to be a sticking point for lenders,” American Banker reports.
Quotable
“Financial regulators, financial institutions, and investors need to have access to the best information and data to measure climate-related financial risks.” — Treasury Secretary Janet Yellen, outlining a Biden administration order requiring banks and other companies to disclose and reduce their climate risk.
