John Foley
Reuters Top News
United Kingdom
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Past articles by John:
Breakingviews: Fed’s SVB review finds there’s no “I” in “blame”
The death of Silicon Valley Bank is a whodunnit with many perpetrators, according to a review conducted by the Federal Reserve and released on April 28. So many, in fact, that the report makes it hard to point the blame anywhere in particular. → Read More
Bank-rule pendulum swings back to 'safety first'
The crisis that struck the U.S. banking system over the weekend had many causes. But one factor was the 2018 decision to ease rules that keep big-but-not-quite-mega-banks out of trouble. Among its supporters were officials who still serve today, like Federal Reserve Chair Jay Powell. Among its greatest opponents: some of Powell’s current peers and colleagues. → Read More
Bank rescue buys stability at a high price
The biggest U.S. banks are so tied up in regulatory red tape that they couldn’t cause a crisis if they tried. The 16th largest, though? That’s a different story, based on Sunday’s dramatic rescue of the financial system. Swift action by U.S. agencies has stopped what could have been a crisis, but at a cost. → Read More
Silicon Valley Bank dies but its disease lives on
Nearly three years with no U.S. bank failures just came to an unseemly end. Silicon Valley Bank, which counts among its customers half of all U.S. venture-capital backed startups, was taken into receivership by the Federal Deposit Insurance Corp on Friday after a slide in deposits and a hasty capital raising failed to restore confidence. By acting quickly, regulators have stopped one crisis, but… → Read More
In praise of American finance’s regulatory mess
There are many issues on which China and the United States are far apart. One is how to keep banks honest. The People’s Republic this week proposed combining financial regulatory functions into a new super watchdog to govern its financial sector more effectively. It’s as if China set out to create the opposite of the multi-headed, semi-improvised American system. There’s no question which model… → Read More
Robinhood’s stock awards tell a cautionary fable
After digital stockbroker Robinhood Markets shed a third of its workforce last year, founders Vlad Tenev and Baiju Bhatt asked themselves what they personally could do to help. The duo decided to surrender an $806 million bonus. What sounds like a generous gesture really isn’t, however. The company’s shareholders are no better off, helping explain why rewards structured this way are such a bad… → Read More
Goldman’s Marcus is a lesson in self-made failure
If David Solomon is taking the blame for the demise of Goldman Sachs’ upstart digital bank, it’s partly by accident. Almost all the other executives who publicly championed the project known as “Marcus by Goldman Sachs” departed the $120 billion Wall Street bank long ago. Even so, with the firm now on the back foot, and Solomon’s pay last year cut by 30%,it falls to the boss to try and recover… → Read More
Goldman cuts Solomon, and his pay, down to size
Chief executives: they’re just another member of the team. Or at least that is the apparent message Goldman Sachs is trying to send by slashing boss David Solomon’s pay by a third for 2022, to $25 million. The decision makes sense for the Wall Street bank’s leadership since, like many of its peers, it is shrinking headcount and bonuses. The risk is that where employees see solidarity, investors… → Read More
Bank earnings become a post-Covid parlor game
After three years of upheaval, it’s natural to yearn for a bit of normal. According to America’s biggest banks, which have unrivalled insight into what makes households and companies tick, normal is a long way off. → Read More
Goldman slams into unwelcome sort of volatility
The similarities between Goldman Sachs and Morgan Stanley are drawing attention to what makes them different. It’s a problem for Goldman Chief Executive David Solomon. → Read More
Banks dress up for a business-casual recession
A recession is coming for U.S. banks, but it’s wearing comfortable shoes. JPMorgan, Bank of America, Citigroup and Wells Fargo all warned of a weakening economy on Friday. Nonetheless the lenders are pretty optimistic that both they and their borrowers can easily weather a bigger downturn. → Read More
Banks’ profit picnic will attract ant invasion
Big banks have little to fear from a recession in 2023. They’re in better shape than a decade ago, with big buffers against delinquent debtors and numerous watchdogs keeping them honest. Nonetheless, the coming year will see large U.S. lenders’ profit relentlessly gnawed by rising expenses that come from many different directions. It’s less a bear attack, and more an ant invasion. → Read More
Wells Fargo labors under $100 bln sin discount
Charlie Scharf started his new year’s resolutions early. The Wells Fargo chief executive agreed the bank would pay $3.7 billion to settle with a U.S. consumer finance watchdog at the end of 2022, atoning for years of mistakenly freezing accounts, wrongly repossessing cars and illegally charging customers fees. With a cumulative cost of bad behavior surpassing $100 billion, by Breakingviews… → Read More
Crypto bank run vindicates watchdogs’ vigilance
Alan Lane’s dreams may have collapsed, but his bank has not. Silvergate Capital , a deposit-taker for cryptocurrency firms, said on Thursday that it had been forced to raise funds in a hurry and flog assets after digital-asset customers pulled almost 70% of their balances. It’s a disaster for Lane and his investors. For the U.S. banking system and households who rely on it, there is much to… → Read More
Boardrooms will rediscover the value of gray hair
When opening an office in a new country, it helps to install an executive who has lived there. By the same token, as the economy heads for its first real recession in over a decade, there’s value in having employees who have seen it all before. To firms keen to avoid repeating past mistakes, the graying of the Western workforce may not be a bad thing in 2023. → Read More
Climate change will become a CEO dealbreaker
The following is an imagined letter from Darcy Cook, the chief executive of StarMark Financial, which – if it existed – would be the world’s biggest money manager. → Read More
Who will be Wall Street’s un-American idol?
BNP Paribas isn’t the first bank to roll the 12-starred European flag across American soil. The French lender is hiring, lending, broking and hustling to capture a greater share of the world’s biggest profit pool for trading and dealmaking. Deutsche Bank and Barclays are doing likewise. This time round, the goal isn’t to add a European face to banking’s Mount Rushmore, but to slow the advance of… → Read More
Circle’s SPAC flop does the public market a favor
Stablecoins are marketed as a kind of cryptocurrency that offers a steady, predictable value. For the companies that create them, the opposite turns out to be true. Circle Internet Financial’s plan to merge with a listed blank-check firm called Concord Acquisition fell apart by mutual consent on Monday. Since Circle is effectively impossible to value right now, it has probably done the market a… → Read More
Jiang Zemin made China richer and more unequal
Jiang Zemin, who died on Wednesday, catapulted China into the modern world. During his 15 years as Communist Party chief, president and head of the army, China embraced entrepreneurs, nurtured markets, and alleviated poverty for millions. But Jiang also helped create the problem that has vexed his successors: yawning inequality. And his death comes at an inconvenient time for the current… → Read More
Stablecoins fall few cents short of respectability
With the collapse of FTX, the big game in cryptocurrency investment has gone from “let’s make money” to “where exactly is the money?” The unceremonious implosion of Sam Bankman-Fried’s exchange showed what happens when funds supposed to be in one place turn up in another, or nowhere at all. That will reignite the debate over how to regulate digital assets – especially when it comes to… → Read More