Receiving Wide Coverage ...
Labor Day return
Wells Fargo “plans to start bringing employees back to the office after Labor Day, citing the increasing availability of vaccines,” the Wall Street Journal reported. “The bank, which has been telling employees each month that they should keep working from home for another month, now hopes that operations will begin to return to normal after Sept. 6, according to a memo circulated to staffers Tuesday afternoon. The memo didn’t say whether employees would return full-time or part-time and said many of the details have yet to be worked out.”
Separately, Wells Fargo said it experienced no losses after closing its exposure to Archegos Capital Management, Reuters reported.
“We were well collateralized at all times over the last week and no longer have any exposure,” the bank said.
No default, no relief
The Biden administration is suspending collections on defaulted government-guaranteed student loans that are held by private lenders, the Journal reported. “The move extends relief to 1.14 million students who borrowed under an older loan program known as the Federal Family Education Loan (FFEL) Program, and then defaulted on those loans. Some defaulted loans were purchased by the Education Department during the financial crisis more than a decade ago, but others are still held by private entities. This group hadn’t been covered by prior coronavirus-related adjustments to collections and payment requirements.”
“FFEL borrowers whose loans are owned by private lenders and who are not in default aren’t affected by Tuesday’s announcement.”
“The change still leaves millions of other borrowers in that program responsible for payments while the bulk of the country’s student loan borrowers have had theirs paused,” the New York Times said.
Wall Street Journal
Resuscitated
Treasury Secretary Janet Yellen is reviving the Financial Stability Oversight Council, “a council of regulators tasked with monitoring the stability of the financial system, homing in on risks that emerged during the market turmoil of a year ago when the coronavirus pandemic hit the U.S. economy. Ms. Yellen will lead her first meeting Wednesday, focusing on a variety of issues, including money-market mutual funds’ and hedge funds’ activities and their roles in the market turbulence last year.”
Behind the scenes
“The payments industry is showing a path forward” to enable people to pay for things using digital currencies without requiring merchants to accept them. Visa and PayPal “this week made moves that can subtly make blockchain and crypto a part of what otherwise seem to be everyday transactions—without putting any onus on merchants to have to think about accepting newfangled moneys.”
Offices to let
JPMorgan Chase is “among the major firms looking to unload big blocks of office space, the latest sign that remote work is hurting demand for this pillar of commercial real estate.” The bank “started marketing 700,000 square feet of office space in lower Manhattan earlier this year. That is the largest block of space available for sublease in Manhattan.”
From SEC to bitcoin
Coinbase named Brett Redfearn, the former the director of the Securities and Exchange Commission’s division of trading and markets, to run its capital markets group. “Redfearn, who left the SEC in December, is the second high-ranking former SEC official this week to take a role with a bitcoin-focused business. On Monday, former SEC Commissioner Jay Clayton took on an advisory role at One River Asset Management, a Greenwich, Conn.-based firm that started investing in bitcoin in November.”
Financial Times
Questions
“Securities regulators in the U.S. and Europe are examining discussions between six banks linked to Archegos Capital Management to determine whether any acted inappropriately during Friday’s fire sale” of stocks owned by the hedge fund. “Archegos founder Bill Hwang on Thursday gathered Wall Street lenders Goldman Sachs, Morgan Stanley and Wells Fargo, as well as Swiss rivals UBS and Credit Suisse and Japan’s Nomura, in a last-ditch effort to unwind billions of dollars of markets bets in an orderly manner. But on Friday banks started selling large blocks of shares that had underpinned Hwang’s trades, creating losses for Nomura and Credit Suisse that are expected to run into billions of dollars.”
“The Securities and Exchange Commission and the U.K.’s Financial Conduct Authority have requested information from the banks involved. Finra, Wall Street’s self-regulatory body, has also contacted the banks at the center of the Archegos trading debacle.”
Accused
The U.K.’s payments regulator “has accused five companies, including Mastercard, of operating a cartel that took advantage of ‘some of the most vulnerable people in society’ for seven years. The Payment Systems Regulator, a subsidiary of the Financial Conduct Authority, said the companies — which were all members of an industry group funded by Mastercard — agreed to share leads and not poach clients from each other under an agreement that lasted from 2012 until 2018, when the regulator raided several of the companies’ offices. The accusations focus on prepaid card services used by local authorities to distribute welfare payments to groups such as homeless people, victims of domestic violence and asylum seekers.”
Falling short
“Black employees held a lower share of top U.S. financial services jobs in 2018 than they did more than a decade earlier, underlining the shortcomings of Wall Street’s long-running efforts to improve racial diversity,” the FT says.
Quotable
“We believe most of us benefit by being physically together. Being pulled into meetings, learning from seeing how others work, and the often unplanned, casual interactions that occur when people see each other in the workplace can be really important.” — CEO Charles Scharf and COO Scott Powell, announcing that Wells Fargo plans to start bringing back employees into the office after Labor Day.
