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Vote of confidence

The Federal Reserve “said it would lift restrictions on share buybacks and dividend payments for most US banks after June 30, ending limits it introduced in the early months of the pandemic, “the Financial Times reported. “The decision – which was taken unanimously by members of the Fed’s board of directors – will apply to banks that pass this year’s stress tests, in which the central bank assesses the resilience of individual institutions to yet another economic shock. This reflects the Fed’s growing confidence in the US outlook and confidence that the largest banks have weathered the economic storm triggered by the pandemic. ” the Wall Street newspaper, Financial Time, New York Times

“If a bank does not meet the stress capital buffer target, it is faced with automatic limits on the amount of money it can pay out to shareholdersAmerican Banker reported.

the Wall Street newspaper

PPP extension

The Senate voted “extend the Paycheck Protection Program loan application deadline to May 31, sending the legislation to the White House for President Biden’s signature days before the current March 31 deadline. The legislation also requires the Small Business Administration to process applications by June 30.

“The House approved the extension last week with broad bipartisan support. The Senate approved Bill 92-7 after rejecting two Republican amendments.

Disobeying the rules

“As economic hardship continues in Europe, negative interest rates persist and they are falling. As a result, more borrowers in Portugal as well as in Denmark, where interest rates turned negative in 2012, are finding themselves in the unusual position of receiving interest on their loans. “

“The European Central Bank has lowered interest rates below zero to revive the continent’s fragile economy amid a sovereign debt crisis. Negative rates have helped everyone get cheap financing from governments to small businesses. It encouraged households to borrow and spend. And it broke the basic credit rule, allowing banks to owe borrowers money. “

Financial Time

After-sales service request

The Securities and Exchange Commission asks banks to disclose “their work with Special Purpose Acquisition Companies, or SPACs.” Although the investigations are so far preliminary, they could turn into a formal investigation. “

“Banks and law firms have benefited from the lucrative rewards and fees associated with the PSPC structure. But critics have highlighted concerns about investor protection, the lack of transparency around incentives and the sky-high valuations attributed to young companies. “

Late for the party?

“Central bankers belatedly realize that the reason” for recent innovations and speculations in digital currencies “is that entrepreneurs are respond to two major flaws in modern finance», Argues an editorial of the FT. “One revolves around something central bankers seem unwilling or unable to deal with: the risk that fiat currency will be degraded in the future by oversupply, i.e. quantitative easing . The other is something central bankers want to address: the clumsy nature of the modern payment system. “

“So what the Fed and others are now trying to do is a soft version of the ‘if you can’t beat them, join them’ strategy: instead of ignoring bitcoin or Facebook’s experiments, they instead hope to harness some of the ideas behind innovations like blockchain ledgers on their own terms. Or, if you wish, decrypt crypto kids. Will it work? There are reasons to be skeptical. problem is style: asking heavy central bankers to adopt the kind of free creativity found in fintech is like asking grandpa to listen to rap. Another, even more daunting problem , is that the CBDCs [central bank digital currencies] create huge political puzzles, such as the future role of private sector banks. “

We own a shopping center

JPMorgan Chase, Goldman Sachs and a group of real estate investors “are to take a stake in Mall of America, the largest mall in the United States, after its owner defaulted on another multibillion-dollar development in New Jersey. The banks were on the verge of securing a minority stake in the Minnesota Mall and began negotiations with its owner Triple Five Group, his attorneys and a consortium of other lenders.

Too much work

Deutsche Bank CEO Christian Sewing relinquish direct supervision of the bank’s very important investment bank, giving in to regulators’ concerns about the CEO’s excessive workload and potential conflicts of interest. Germany’s largest lender will announce the change ahead of its annual meeting of shareholders on May 27, as part of a larger board reshuffle expected to be unveiled in the next two months.

UK fraud

Online fraudsters “use fake texts on Covid-19 vaccines, lockdown fines and missed package deliveries” scammed UK consumers over a record £ 479million last year. “Investment scams accounted for the highest proportion of authorized fraud losses, with over £ 135million lost to increasingly sophisticated deceptions often involving cloned websites of investment providers and private banks. Over the past year, the prevalence of cryptocurrency scams has also increased.

On the bright side, “banks and finance providers were able to return 43% (£ 206.9m) of authorized fraud losses to victims – more than three-quarters more than the amount returned in 2019, the year where a voluntary sector code on reimbursement has been introduced. . “

Somewhere else

Anti-stress bonus

While Goldman Sachs has pledged to give Saturday off to its overworked junior investment bankers, Credit Suisse is giving “the more junior members of its capital markets and trading activities a “lifestyle” allowance of $ 20,000 because it tries to maintain the morale of the staff who are feeling the pressure of heavy workloads and remote working, ”Reuters reported. Switzerland’s second-largest bank “will allocate the extra money to staff at vice president level or below, in addition to the salary increases given to anyone with a director title or less.” “

“Credit Suisse’s Capital Markets & Advisory department recognizes and wishes to reward the efforts of our employees who have not only succeeded in supporting our clients with unprecedented transaction volume, but also increased our market share”, stated the Bank.

Quotable

“The banking system remains a force, and returning to our normal setting after this year’s stress test will preserve that strength. – Randal Quarles, Vice President of Fed Supervision, announcing that the Fed will lift restrictions on dividends and bank buybacks if they pass the next round of stress tests.