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SEC chief slams trading database; Crapo may revise Senate cannabis banking bill

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SEC chief slams trading database; Crapo may revise Senate cannabis banking bill

SEC Commissioner Hester Peirce is seeking to end the Consolidated Audit Trail, or CAT, project which is the massive trading database that will use the more than 58 billion records it is expected to receive daily to create an unprecedented view of U.S. stock and option trading for regulators and exchanges. Peirce, a Republican member of the agency's top panel appointed by President Donald Trump, said she is not sure the "liberty cost" of centralizing all that data into the hands of a few governing bodies is worth it. However, as just one member of the SEC's five-person commission, Peirce does not have the unilateral authority to end the CAT.

Chairman of the Senate Banking Committee, Sen. Mike Crapo, R-Idaho, is looking to amend the Senate version of a cannabis banking bill, passed by the House, to fight money-laundering risks, sources told American Banker. The House of Representatives passed its version of the legislation, called the Secure And Fair Enforcement Banking Act, or SAFE Banking Act of 2019, with overwhelming support in a landmark congressional vote. The Senate bill was introduced in April by Sens. Cory Gardner, R-Colo., and Jeff Merkley, D-Ore., and Crapo is expected to resolve issues with handling the so-called legacy cash through the amendment. Legacy cash is the money that marijuana businesses have accumulated while they have not been able to open up bank accounts.

Appaloosa Management LP, the Florida-based hedge fund run by billionaire David Tepper, plans to retain 15 clients and return the rest of the firm's outside capital in 2020, sources told Bloomberg News. The change is part of Tepper's planned transition to a family office from operating a fund business, according to the report.

PayPal Holdings Inc. pulled out of Facebook Inc.'s initiative to launch its digital coin, Libra, amid the backlash received from legislators and regulators in the U.S. and around the world. PayPal, which was one of several major companies that said it would invest about $10 million in a consortium that would govern Libra, said it will continue to partner with and support the tech giant "in various capacities."

Elsewhere, the European Commission is asking Facebook to detail how Libra will deal with money laundering and counter-terrorist financing rules, the Financial Times reports. The Commission is also seeking information on how Libra would manage its reserves and safeguard customer data, among other things.

Greece's Eurobank Ergasias SA is struggling to divest an 80% stake in loan recovery business Financial Planning Services to Pacific Investment Management Co. LLC as the parties failed to reach an agreement over its valuation before the Sept. 30 deadline, Reuters reports. Pimco reportedly values the business way below the Greek lender's roughly €300 million threshold, but Eurobank is continuing discussions with Pimco over a deal.

Malaysia is currently not in talks with Goldman Sachs Group Inc. over the recovery of the funds lost in the 1Malaysia Development Berhad scandal, Reuters reports, citing Malaysian Minister of Finance Lim Guan Eng. In January, Lim said the country would consider dropping charges against the investment bank if it paid $7.5 billion as reparation.

Investment banking heavyweights Goldman Sachs and Morgan Stanley are holding sessions on direct listings as investors are touting the alternative to initial public offerings to startups in order to avoid Wall Street banks and the IPO process, Bloomberg News reports.

In other parts of the world

Asia-Pacific: HKEX to up LSE offer; Yes Bank in talks with tech firms

Europe: HSBC may cut 10,000 jobs; Bank Millennium could see €1.6B Swiss franc loans hit

Middle East & Africa: EU to drop UAE from blacklist; Uganda licenses 2 new banks; S&P acts on Morocco

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US bank bond portfolios move deep in the black, boosting tangible book values: Long-term rates have fallen more than 150 basis points since the recent peak in early November 2018 amid concerns about slowing global growth and the brewing trade war between the U.S. and China. The Federal Reserve has responded with a pair of rate cuts in July and September, and economists are entertaining the possibility of another rate cut before year-end.

Brick-and-mortar Wisconsin bank changes name to match digital offering: Wausau, Wis.-based River Valley Bancorp. Inc. initially had two subsidiaries: its brick-and-mortar operation under the name River Valley Bank, and its separate online banking operation under the name IncredibleBank. When it came time to merge the two units into one, the 52-year-old bank went with its digital offering's moniker.

Durbin Amendment keeping a lid on largest NJ community banks: The median return on average equity for New Jersey's banks and thrifts with less than $10 billion in assets was 5.62% in the second quarter, down 46 basis points year over year and well below the median 7.60% ROAE for mid-Atlantic community banks and 9.59% for all U.S. community banks.

The day ahead

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

In Asia, the Nikkei 225 was down 0.16% to 21,375.25.

In Europe, around midday, the FTSE 100 was up 0.39% to 7,183.19, and the Euronext 100 rose 0.45% to 1,069.87.

On the macro front

The TD Ameritrade IMX report and the Consumer Credit 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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