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Paul Volcker warns on Volcker 2.0; Charles Schwab cuts jobs; fintech raises $15M

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Paul Volcker warns on Volcker 2.0; Charles Schwab cuts jobs; fintech raises $15M

Paul Volcker, former chair of the Federal Reserve and the man behind the Volcker Rule that limits banks' trading with their own funds, cautioned current Fed chief Jerome Powell against the proposed relaxation of the rule's restrictions that were aimed at averting another financial crisis, Bloomberg News reports. In an Aug. 20 letter to Powell, Volcker said the rule changes so far approved by two of the five concerned agencies are "far afield" from mere simplification and were merely pushed by "well-compensated lobbyists," the news outlet cites. The Volcker rule rewrite still needs approval from the Fed, the Securities and Exchange Commission and the Commodity Futures Trading Commission in order to become official.

The U.S. Treasury Department is looking to appeal to the Supreme Court a New Orleans appeals court's ruling that reversed a previous court decision that had sided with the regulators over Fannie Mae and Freddie Mac's profits, Treasury Secretary Steven Mnuchin said in an interview with CNBC. The ruling could be the first step in allowing the government-sponsored enterprises to build the capital reserves needed to exit conservatorship.

The Office of the Comptroller of the Currency approved Fifth Third Bank's application to convert to a national bank from an Ohio state-chartered bank. The Fifth Third Bancorp unit intends to operate under the name Fifth Third bank, National Association if given the go signal.

Regions Financial Corp. has prepared for a slowdown over the past two years and is well-positioned if the economy turns south, CEO and President John Turner said at an industry conference. The company has de-risked its portfolio by exiting some lines of business, such as indirect auto and medical office buildings, and by reducing its reliance on its real estate business. it has also been closing and automating some of its bank branches.

Charles Schwab Corp. is laying off about 600 employees, or roughly 3% of its staff, as part of its effort to lower costs as the Fed's recent interest rate cuts hamper profits at the brokerage's banking division, The Wall Street Journal reports. CEO Walt Bettinger broke the news in a recent town hall with some of the bank's employees, sources told the news outlet. Most of the job cuts are reportedly expected to happen in the retail division that includes Schwab financial advisers and people working with clients to manage investments.

A group of former analysts at BTIG LLC formed their own research firm named LightShed Partners, covering technology, media, and telecom and with KKR & Co. as one of its pioneering clients, Bloomberg News reports. The founders included Richard Greenfield, Walter Piecyk, Brandon Ross, Joseph Galone and Mark Kelley. The analysts are eyeing investments in private companies rather than in public companies, according to the report.

Bank technology company Numerated Growth Technologies Inc. closed a $15 million series B investment led by Patriot Financial Partners with existing investors including Venrock, FINTOP Capital and Hyperplane. The latest funding round brings Numerated's total venture capital raised to $32 million.

Whether it's bitcoin, Ethereum or Facebook Inc.'s Libra, any digital coin project must meet U.S. regulatory standards on anti-money laundering and anti-terrorism financing to be able to roll out in the U.S., Reuters reports, citing U.S. Undersecretary of Terrorism and Financial Intelligence Sigal Mandelker. Mandelker met with Swiss government officials and international financial bodies in Geneva to discuss cryptocurrencies, including Libra, which is set to be launched by a Swiss-based association.

In other parts of the world

Asia-Pacific: China scraps cap for overseas investors; ASIC appeals Westpac ruling

Europe: Nordea COO resigns; Commerzbank offices raided; mortgage blow for banks in Spain

Middle East & Africa: Abu Dhabi Commercial Bank exits India; Zimbabwe forms monetary policy committee

Now featured on S&P Global Market Intelligence

US rate cut ends growth trend in Americas transaction banking revenues: The world's leading transaction banks saw their sector revenues in the Americas stabilize in the first half of 2019 after three consecutive years of growth, according to data released Sept. 10 by research firm Coalition.

Mnuchin: Fannie, Freddie could avoid systemic label with capital buffer of $100B: Top administration officials want Fannie Mae and Freddie Mac to build up their capital levels and exit government control but avoid the strict oversight of a "too big to fail" regulatory label, they said at a key congressional hearing Sept. 10.

Virginia community banks improve key metrics in Q2 but still lag some peers: Virginia's community banks posted year-over-year improvements in certain key performance metrics in the second quarter, but still lagged their Southeastern peers by some measures.

The day ahead

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

In Asia, the Hang Seng gained 1.78% to 27,159.06, and the Nikkei 225 increased 0.96% to 21,597.76.

In Europe, around midday, the FTSE 100 climbed 0.92% to 7,334.87, and the Euronext 100 was up 0.46% to 1,084.33.

On the macro front

The PPI-FD index, the Atlanta Fed business inflation expectations report, the wholesale trade report and the EIA Petroleum Status Report are due out today.

Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

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