Barron’s (October 8)
“The near-simultaneous collapse of two companies tied to the U.S. auto industry is shedding new light on a fast-growing part of the financial ecosystem little known outside Wall Street.” Non-depository financial institutions (NDFIs) “now account for some 33% of all commercial and industrial loans originated by large banks” and, at the end of the month, stood at $1.7 trillion (up over 400% since 2015). “These hard-to-track loans fall outside systems that regulators can track to assess where risk is concentrating.”
Tags: $1.7 trillion, Auto industry, Banks, Collapse, Commercial, Concentrating, Fast-growing, Financial ecosystem, Industrial, Loans originated, NDFIs, Regulators, Risk, U.S., Wall Street
Reuters (August 8)
“President Donald Trump is instructing agencies to scrap ‘reputation risk or equivalent concepts’ from the customer assessment equation.” Banks will like the reduction in paperwork, but this move will “make it harder to spot fraud.” Trump has already “rolled back enforcement of all sorts of financial misdeeds. Further clearing the way for more of them is a far bigger threat than the fanciful idea that profit-seeking banks turn away good business on purely ideological grounds.”
Tags: Agencies, Banks, Customer assessment, Enforcement, Financial misdeeds, Fraud, Ideological, Paperwork, Profit, Reputation risk, Threat, Trump
American Banker (February 24)
“Banks have been encouraged by the Trump administration’s promises to reduce their regulatory burdens, but the simultaneous efforts to reduce the federal workforce — including among independent bank regulators — could have unforeseen consequences in supervision and enforcement.” Experts say, this could lead to weaker crisis response.
Tags: Bank regulators, Banks, Crisis response, Encouraged, Enforcement, Experts, Federal workforce, Independent, Promises, Regulatory burdens, Supervision, Trump administration, Unforeseen consequences
Bloomberg (January 8)
“Texas Attorney General Ken Paxton dropped his threat to cut off big US banks from municipal-bond deals after a slew of Wall Street firms exited a controversial climate-finance alliance.” Paxton’s approval power over “most public bond offerings” allowed him considerable “influence over which banks can participate in such transactions.” Paxton’s office announced a review in 2023 of financial firms that were “members of the Net-Zero Banking Alliance, which he has repeatedly criticized.”
Tags: A.G., Banks, Climate, Controversial, Exited, Finance, Influence, Municipal-bond deals, Net-Zero Banking Alliance, Paxton, Texas, Transactions, U.S., Wall Street firms
Reuters (January 2)
Jane Street and Citadel Securities looked primed to seize “a much bigger slice of the $150 billion global-markets pie,” disrupting incumbent trading giants like JPMorgan, Morgan Stanley, Bank of America and Deutsche Bank “who in 2025 will notice electronic market-makers acting more like banks.” Until now, there’s been a “seemingly happy co-existence” with the electronic market makers focused on flow, but that “will end in 2025” when “the upstarts” flex their greatly expanded capital base to make “a fresh assault on bond and commodity trading.”
Tags: $150 billion, Banks, BoA, Bonds, Capital base, Citadel Securities, Commodity trading, Deutsche Bank, Disrupting, Electronic market-makers, Global markets, Incumbent, Jane Street, JPMorgan, Morgan Stanley, Trading giants
Hartford Courant (August 12)
“Why aren’t we taking climate change more seriously” even though the consequences are all around. “The good folks living in the small town of Fairbourne, Wales have a problem. Those who want to sell their homes to buyers looking for 30-year mortgages can’t” because local banks “have determined that the town of Fairbourne will not exist in 30 years. It will be underwater.” Before it is too late, “we need to take climate change more seriously.”
Tags: 30-year mortgages, Banks, Buyers, Climate change, Consequences, Fairbourne, Homes, Sell, Underwater, Wales
Wall Street Journal (April 22)
Giant investment companies like Blackstone, Franklin Templeton, BlackRock and KKR “are taking over the financial system.” They now “control sums rivaling the economies of many large countries. They are pushing into new businesses, blurring the lines that define who does what on Wall Street and nudging once-dominant banks toward the sidelines.” Their outsize roles are, according to investors, creating “risks markets have never encountered before.”
Tags: Banks, BlackRock. KKR, Blackstone, Blurring lines, Countries, Financial system, Franklin Templeton, Investment, Investors, Markets, Risks, Sidelines, Wall Street
Wall Street Journal (February 12)
“Stand in the middle of the business district of any big U.S. city and the nearby buildings are emptier and a lot less valuable than they were four years ago. Listed office real-estate investment trusts have already faced the music: The S&P 500 Office REITs Sub-Industry Index has roughly halved in value since before the pandemic. The reality check for banks is just beginning.”
Tags: Banks, Buildings, Business district, Emptier, Halved, Listed, Office REITs, Pandemic, Reality check, S&P 500, U.S., Valuable
Financial Times (February 1)
“Mounting losses from banks in the US, Asia and Europe have rekindled concerns about weakness in the US commercial property market, a sector that has been under pressure from lower occupancy levels and higher interest rates.” This week New York Community Bancorp, Aozora Bank and Deutsche Bank each warned of related risks or recognized losses, which “mark the latest fallout from the… dual problems of fewer people working in offices since the pandemic and more expensive borrowing costs.”
Tags: Aozora Bank, Asia, Banks, Commercial property, Concerns, Deutsche Bank, Europe, Fallout, Interest rates, Losses, Occupancy, Offices, Pandemic, Pressure, Risks, U.S., Weakness
Wall Street Journal (December 28)
“The failure to anticipate how quickly the Fed would raise interest rates has upended banks big and small this year. Three bigger ones collapsed this spring, but it is community banks… that have been in a full-blown crisis. The losses on long-term bonds have unnerved depositors, investors and regulators who have questioned how bankers failed to properly protect themselves from interest-rate risks.”
Tags: Anticipate, Banks, Bonds, Collapsed, Community banks, Crisis, Depositors, Failure, Fed, Interest rates, Investors, Protect, Regulators, Risks, Unnerved, Upended
