Dec 9, 2019

Warren plan targets bank mergers

Illustration: Drew Angerer/Getty Staff; Aïda Amer/Axios

Elizabeth Warren last week introduced a bill to strengthen oversight of bank mergers, arguing that the current construct is a rubber stamp.

The big picture: The Federal Reserve acknowledges that it declined none of the 3,819 bank merger applications it received between 2006 and 2017. And there's no indication that it's objected since then, including the $66 billion tie-up of BB&T and SunTrust that closed earlier this morning (albeit with some required divestitures).

  • It's unclear how the Fed might have ultimately ruled on 503 applications, included in the above number, that were withdrawn before deal completion.

The basics of Warren's proposal, per The NY Times:

It would demand more extensive testing for vulnerabilities when two banks want to merge, a bid to slow financial sector consolidation and lean against the formation of huge banks. And it would require the Consumer Financial Protection Bureau, which Ms. Warren helped create, to approve any merger in which one of the banks offers consumer financial products.

Yes, but: Like most of Warren's plans, this one isn't becoming law with a GOP-led Senate and Trump-led White House.

But she's looking toward 2021. Were Warren to become president, or get sign-on from a more successful rival, then legacy banks might find it harder to merge, just as digital, branch-less banks become more popular.

  • Online bank Chime on Friday raised $500 million in Series E funding at a $5.8 billion valuation, up from a $1.5 billion valuation in March.

The bottom line: Warren and other progressive Democrats are intent on protecting brick-and-mortar retailers, but show no such affinity for brick-and-mortar banks.

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Big American banks are doing quite well in 2019

Reproduced from Retail Banker International; Table: Axios Visuals

It has been a particularly good year for American banks. Despite historically low interest rates, which theoretically eat into their profits, the sector has enjoyed significant share appreciation.

By the numbers: 75 of the world’s largest 100 banks by market cap have seen an increase in their stock price in 2019, according to a new report from GlobalData.

Go deeperArrowDec 10, 2019

Six of the biggest U.S. banks have weaknesses in their crisis plans

Illustration: Lazaro Gaimo/Axios Visuals

The Federal Reserve Board and the Federal Deposit Insurance Corporation found shortcomings in the exit strategies — or "living wills" — of six of the eight largest banks in the U.S., it said on Tuesday.

Why it matters: These living wills dictate how big banks handle bankruptcy during financial distress — or a financial crisis. Bank of America and Wells Fargo are among those currently unable to prove that their top decision-makers can confidently act on crisis-level exit strategies.

Go deeperArrowDec 18, 2019

Warren campaign warns supporters that fundraising has slowed 30% in 4th quarter

Photo: Scott Olson/Getty Images

Elizabeth Warren's campaign sounded an alarm on Friday to its supporters, saying in an email that it has only raised $17 million so far in the fourth quarter, per CNBC.

Why it matters: With just days left before the quarter's end on Dec. 31, that number is — at the moment — down 30% from the $24.6 million Warren brought in during the third quarter.

Go deeperArrowDec 27, 2019