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Home » Daily Briefing » Morning briefing - Monday 12

Morning briefing - Monday 12

Fabrizio Viola stepped down as CEO of Italian bank Monte dei Paschi last week, and his replacement is expected to be Marco Morelli, current Italian chief at Bank of America Merrill Lynch. Sources told the FT that a change of CEO was necessary in order to raise new capital for the beleaguered bank — and also offered the chance to postpone the fundraising until after the constitutional referendum expected to happen at the end of the year. Mr Viola had raised more than $8 billion over the last three years, which the bank has already used. The bank badly needs an additional $5 billion in funds. Read more here.

Germany's finance capital Frankfurt is moving to improve its pitch for footloose banks looking to get out of post-Brexit Britain — by promising new labour laws that make it easier to fire top-paid bank executives. "When we meet with CEOs and Brexit teams, they ask about our labor laws," said Eric Menges, president of FrankfurtRheinMain, a quasi-government agency that promotes business development in the region. "They're afraid of German contracts." However, it's likely that the Germans have investment bankers in mind, if a quote from Hubertus Väth, head of the Frankfurt Main Finance trade group, is anything to go by. He characterised competitor Paris as a city of light, love and lunch. "And in finance, lunch is for losers," he told Bloomberg.

Wells Fargo has achieved the rare feat of both annoying vast swathes of its customers and bringing down the wrath of regulators — all to earn a relatively insignificant $2 million in fees, a drop in the ocean of money earned by the bank. "Jeanne Young of South Amboy, New Jersey was also really angry at Wells Fargo," according to CNN Money. "She was signed up for a credit card she never asked for. In response, she closed her Wells Fargo checking account and refinanced her mortgage away from the bank. Her fiance moved his IRA out of the bank." Ms Young worried that having a credit card opened and closed in her name (without her knowledge) had dinged her credit score.

"Banks find blockchain hard to put into practice", says the FT today, suggesting that the adoption of blockchain by banks is "an advance in marketing rather than technology". While talk of blockchain two years ago induced paroxysms of laughter and eye-rolling among banking people, its cost-cutting potential now has banks scrambling to join blockchain consortia. Blockchain's applications may instead lie with other forms of payment such as machine-to-machine payments — for instance, for electric cars to charge and pay automatically while idling over a charging grid near a traffic light. As for banking — well, we still haven't seen the situation better summed up than this fan-drawn Dilbert cartoon.

blockchain

India has joined other countries cracking down on crowdfunding and peer-to-peer fundraisers. The Indian regulator, Securities and Lending Board of India, has told alternative lenders to stop on-boarding new investors, according to pymnts.com. "Electronic platforms facilitating fundraising on digital platforms are neither authorized nor recognized under any law governing the securities market," the note stated. "Such platforms, which are open to all investors registered on the platform, amount to a contravention [of the] Securities Contract Act and the Companies Act."

That's not the only change afoot in Indian banking, with the recent replacement of RBI governor Raghuram Rajan and speculation over the future of the State Bank of India CEO Arundhati Bhattacharya as she finishes her first term. The SBI is playing a central role in improving financial inclusion in India. The long read in Nikkei Asian Review is here.

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