Currencies

Asia markets tentative ahead of Opec meeting

Wednesday 2.30am GMT Overview Markets across Asia were treading cautiously on Wednesday, following mild overnight gains for Wall Street, a weakening of the US dollar and as investors turned their attention to a meeting between Opec members later today. What to watch Oil prices are in focus ahead of Wednesday’s Opec meeting in Vienna. The […]

Continue Reading

Banks, Financial

RBS emerges as biggest failure in tough UK bank stress tests

Royal Bank of Scotland has emerged as the biggest failure in the UK’s annual stress tests, forcing the state-controlled lender to present regulators with a new plan to bolster its capital position by at least £2bn. Barclays and Standard Chartered also failed to meet some of their minimum hurdles in the toughest stress scenario ever […]

Continue Reading

Banks

Barclays: life in the old dog yet

Barclays, a former basket case of British banking, is beginning to look inspiringly mediocre. The bank has failed Bank of England stress tests less resoundingly than Royal Bank of Scotland. Investors believe its assets are worth only 10 per cent less than their book value, judging from the share price. Although Barclays’s legal team have […]

Continue Reading

Currencies, Equities

Scary movie sequel beckons for eurozone markets

Just as horror movies can spook fright nerds more than they expect, so political risk is sparking heightened levels of anxiety among seasoned investors. Investors caught out by Brexit and Donald Trump are making better preparations for political risk in Europe, plotting a route to the exit door if the unfolding story of French, German […]

Continue Reading

Currencies

Dollar rises as markets turn eyes to Opec

European bourses are mirroring a tentative Asia session as the dollar continues to be supported by better US economic data and investors turn their attention to a meeting between Opec members. Sentiment is underpinned by US index futures suggesting the S&P 500 will gain 3 points to 2,207.3 when trading gets under way later in […]

Continue Reading

Categorized | Banks

Stumpf quits Fed panel amid Wells woes


Posted on September 23, 2016

WASHINGTON, DC - SEPTEMBER 20: John Stumpf, chairman and CEO of the Wells Fargo & Company, testifies before the Senate Banking, Housing and Urban Affairs Committee September 20, 2016 in Washington, DC. The committee heard testimony on the topic of "An Examination of Wells Fargo's Unauthorized Accounts and the Regulatory Response." (Photo by Win McNamee/Getty Images)©Getty

John Stumpf

The fallout from Wells Fargo’s sham account scandal escalated on Thursday when its chief executive resigned from an advisory position at the Federal Reserve and the Department of Labor said it was taking “very seriously” complaints about how the bank treated its staff.

Lawmakers are stepping up pressure on the California-based bank after regulators found its workers opened as many as 2m fee-generating accounts without customers’ knowledge. Senators rounded on John Stumpf, the bank’s chairman and chief executive, at a hearing this week.

    Senators led by Elizabeth Warren on Thursday called on the labor department to investigate whether Wells failed to properly pay employees who worked overtime to meet aggressive sales targets.

    Meanwhile, Mr Stumpf stood aside with immediate effect as one of 12 banking industry representatives on the Federal Advisory Council just hours after a group of senators — again including Ms Warren — said he should not be reappointed.

    The body, whose other members include Citigroup chief Michael Corbat, provides insight to the Fed’s board of governors on economic, monetary, and financial issues.

    Mr Stumpf was the industry’s representative for the Fed’s Twelfth district, which is the largest both by geography and the size of its economy and includes the nine western states of the US.

    Five senators wrote to Roy Vallee, chairman of the San Francisco Board, calling on the board not to reappoint the Wells chief for a third one-year term.

    They argued: “It would be ironic if the Federal Reserve, a key federal banking regulator tasked in part with ensuring the fair and equitable treatment of consumers in financial transactions, continued to receive special insights and recommendations from senior management of a financial institution that just paid a record-breaking fine to the Consumer Financial Protection Bureau for ‘unfair’ and ‘abusive’ practices.”

    Wells Fargo said Mr Stumpf’s resignation from the council was his “personal decision … His top priority is leading Wells Fargo”.

    John Gapper

    Wells Fargo reaches the end of its journey

    Ingram Pinn

    The old lesson applies to the bank’s success: if something seems too good to be true, it probably is

    Senators have also written to Tom Perez, Secretary of Labor, raising concerns about the bank’s employment practices. Signatories to that letter include Bernie Sanders, who ran unsuccessfully against Hillary Clinton for the Democratic presidential nomination, and Sherrod Warren, the top Democrat on the Senate banking committee, as well as Ms Warren.

    Wells declined to comment directly on the call for the labor department to launch a probe.

    In a statement it said: “At Wells Fargo, our team members are our greatest asset. We strive to make every one of them feel valued, rewarded and recognised and we pride ourselves on creating a positive environment for our team members, including market-competitive compensation, career-development opportunities, a broad array of benefits, and a strong offering of work-life programs.”

    The Department of Labor said: While we cannot discuss details of potential law enforcement decision-making, we do take the concerns raised in the letter very seriously … Many investigations are initiated by complaints.”

    Additional reporting Barney Jopson and Sam Fleming in Washington