Was Credit Suisse CEO a victim of racism?; Global Payments plans Netspend sale

Wall Street Journal

Better data

Seven years ago the Commodity Futures Trading Commission walked away from a probe into allegations that traders at JPMorgan Chase were rigging silver prices because it didn’t have enough proof. But last week it “hammered the megabank with a $920 million fine,” thanks to “advances government has made in using data to uncover market manipulation.”

“We could not have brought the JPMorgan case without the data analytics program we have now,” said James McDonald, the agency’s enforcement director.

Financial Times

On-the-job training

JPMorgan Chase is hiring what the FT says is “the U.K.’s first investment banking apprentices, applying the on-the-job training method previously reserved for hairdressing and car mechanics to roles on its capital markets and deal-making teams.”

“The success of our business depends on diversity of thought,” said Vis Raghavan, JPM’s chief executive for Europe, the Middle East and Africa. “Opening up different pathways into JPMorgan is a fundamental part of that, and we have no doubt that the expansion of our apprenticeship program into front-office investment banking groups will mean we can attract even stronger candidates.”

Very interesting

Citigroup is America’s “most interesting” big bank, which isn’t necessarily a good thing. “The job for Jane Fraser, its next chief executive, is to make it a bit more dull,” an FT op-ed says.

The Italian job

Italian payments providers Nexi and Sia are close to finalizing a €15 billion merger “that will create one of Europe’s largest fintech companies,” the FT reports. “The boards of both companies were due to meet on Sunday evening to approve a combination that has been under negotiation for almost two years. A deal could be announced soon after the meeting concludes.”

“The all-share deal would extend the pressure on Europe’s payments providers to consolidate further, increasing their size as online purchases intensify during the pandemic and as consumers move away from using physical cash.”

Stonewalled

Ernst & Young was foiled by “the determined efforts of Wirecard executives to kill off an investigation and ensure EY continued to give the once high-flying payments group a clean bill of health,” the FT says. As a result, “it would be another three years before the scale of deception at Wirecard was uncovered, during which time the company raised billions of euros in fresh capital.”

“EY now faces an investigation by Germany’s auditor oversight body Apas, lawsuits from Wirecard investors and the departure of clients such as Deutsche Bank’s asset management arm DWS and Germany’s Commerzbank.”

New York Times

The race factor

Former Credit Suisse CEO Tidjane Thiam “was the only Black chief executive in the top tier of banking” before he was forced out by the board in February “after a deeply embarrassing surveillance scandal erupted on his watch.” During his five-year tenure, he “made Credit Suisse profitable again after a long decline. But he never had to stop fighting for acceptance and respect, both within the bank and in Switzerland generally.”

Bloomberg News

“His ouster attracted remarkably little notice outside Zurich, coming as it did months before a global reckoning with systemic bias, and occurring 4,000 miles from Wall Street. But interviews with 11 people who worked closely with Mr. Thiam at Credit Suisse, and five other close contacts — including clients, friends, family and investors — suggest that race was an ever-present factor throughout his tenure, and that it helped create the conditions for his startlingly swift departure.”

Washington Post

Caveat emptor

Depositors and investors in U.K. and European banks have reasons to be skeptical about the banks’ financial strength 12 years after the global financial crisis, a Bloomberg op-ed says.

Elsewhere

Divestiture

Atlanta-based Global Payments “is exploring a sale of its Netspend unit, aiming to secure a valuation of more than $2 billion for the prepaid debit card business,” Reuters reported. “Founded in 1999, Netspend offers rechargeable debit cards for personal and business usage, a product which is primarily focused on those less well-served by traditional banks and financial institutions. It also has partnership agreements with the likes of Walmart, 7-Eleven and Western Union to offer branded cards.”

“Selling Netspend would provide Global Payments with extra cash to invest in core parts of its business and those which are considered key growth drivers for the future.”