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Kashkari talks TBTF, nuclear reactors; Visium fields redemption requests

Banking Essentials Newsletter - November Edition

Online Brokerage Space Should Remain Rich Source Of M&A

University Essentials | COVID-19 Economic Outlook in Banking: Rates and Long-Term Expectations: Q&A with the Experts

Estimating Credit Losses Under COVID-19 and the Post-Crisis Recovery


Kashkari talks TBTF, nuclear reactors; Visium fields redemption requests

"A lot oflittle banks are saying 'we can't afford these regulations', so they are forced toconsolidate, making [the] problem worse," said Federal Reserve Bank ofMinneapolis President Neel Kashkari. Meanwhile, one solution to end too big tofail is by treating banks likeutilities. "Think of nuclearreactor[s]; let's hold banks accountable in [the] same way."

FromSunTrust Banks Inc.'s10-Q: The U.S. Attorney's Office has subpoenaed information about itsanti-money laundering and Bank Secrecy Act compliance procedures, after the companyfailed to detect suspectedembezzlement … by a client's employee.

PiperJaffray's Kevin Barker met with KeyCorp executives and thinks another deal is in thecards, possibly in late 2017 at the earliest and after the integration.

How much moneydid Carson Block make yesterday? The Muddy Waters Research founder announced hewas short , andthen the stock dropped 4.41%. The issue: too many unfundedoff-balance-sheet loans and the need for continuous earnings growth to fundthem. "'We'll go out and acquire banks, sell off the assets, and then wecan use the deposits. This works well when you're a growth stock, but when itslows down then you have a problem," Business Insider quotes him. Anotherissue according to Block: "seeds of [management] hubris."

But it's moneyin, money out: Visium AssetManagement LP said it secured about $80 million in new investmentslast month. Sources for The Wall StreetJournal say it's also facing redemptionrequests totaling $1.5billion. The firm is currently under over trading and valuationissues.

Meanwhile,Cornwall Capital ManagementLP believes CanyonCapital Advisors LLC should end its proxy fight against Ambac Financial Group Inc., because Ambac is responsiveto shareholder concerns — as proven by the election of a Cornwall Capitalpartner to Ambac's board.

In M&Anews, Boston Financial ManagementLLC has absorbed Emerson Investment Management LLC and now has some $1.8billion in client AUM.

And isbuying United OnlineInc. for $11.00 per share — after United rejected 's $12.50-per-share offer back in November 2015. It did sellcertain properties in the interim.

Online lender SoFi Lending Corp. is expanding into smaller loans, nowthat it is approvedas a Fannie Mae loanseller and servicer.

And the CFPB holds a field hearing today onthose contract provisions that financial institutions use to avoid going tocourt. It is seeking comments onproposed rules that would prohibit mandatory arbitration clauses, unless they allowclass-action lawsuits. Forbes pointsout the real winners are class-actionlawyers.

In other parts of the world

TheMalaysian Ministry of Finance said it will disbandthe prime minister-led advisory board of 1Malaysia Development Bhd. and takeover its assets, Reuters reports. The move comes in the wake of at least sixinternational investigations for possible money laundering. 

The day ahead

Earlymorning futures indicators pointed to a higher opening for the U.S. market.

In Asia, theHang Seng fell 0.37% to 20,449.82, while the Nikkei 225 was down 3.11% to16,147.38.

In Europe, asof midday, the FTSE 100 was up 0.07% to 6,116.36, and the Euronext 100 rose0.39% to 853.08. 

On the macro front

Thejobless claims report, the EIA natural gas report, the Fed balance sheet andthe money supply report are due out today. 

The Daily Dose is updated as of 7:30 a.m. ET. Some external linksmay require a subscription.