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Wells names Charles Scharf CEO; FDIC to take in-depth look at Texas bank failure

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Wells names Charles Scharf CEO; FDIC to take in-depth look at Texas bank failure

Wells Fargo & Co. named Charles Scharf its president and CEO, effective Oct. 21. Scharf is the chairman and CEO of Bank of New York Mellon Corp. Wells had been operating without a permanent CEO since March 28, when Timothy Sloan stepped down following withering criticism from lawmakers and regulators over his leadership and the bank's efforts to recover from its consumer scandals.

The Federal Deposit Insurance Corp. plans to conduct a detailed probe, during the next six months, into the circumstances around Enloe State Bank, which closed May 31 under suspicious conditions, American Banker reports. In its failed bank review, the FDIC noted that the bank's board " failed to establish adequate corporate governance to monitor and control management’s activities, including those of a dominant bank president." Given the extent of irregular loans and the "extraordinarily high" estimated loss rate, the bank's closure warrants an in-depth review, the FDIC said.

A group of Senators introduced a bipartisan bill that would require shell companies, which are often used as fronts for organized crime, to disclose their true owners to the U.S. Department of Treasury. The Improving Laundering Laws and Increasing Comprehensive Information Tracking of Criminal Activity in Shell Holdings Act, or ILLICIT CASH Act, aims to improve corporate transparency and fight money laundering and terrorist financing, among other crimes. The bill is sponsored by Sens. Tom Cotton, R-Ark.; Mark Warner, D-Va.; Doug Jones, D-Ala.; Mike Rounds, R-S.D.; Bob Menendez, D-N.J.; John Kennedy, R-La; Catherine Cortez Masto, D-Nev; and Jerry Moran, R-Kan.

At a town hall in Billings, Mont., Minneapolis Federal Reserve President Neel Kashkari said there is "no reason" for the U.S. to have interest rates that restrain the economy. Kashkari, who will join the Federal Open Market Committee as a voting member in 2020, recently said that the central bank's policy target should be 50 basis points lower than it is today.

Freddie Mac and Fannie Mae shareholders added another blow to the legality of independent regulatory agencies as they petitioned the Supreme Court Sept. 25 to hear their claims that the single-director structure of the Federal Housing Finance Agency is unconstitutional, American Banker reports. The Fifth Circuit Court of Appeals in New Orleans earlier this month partially reversed a lower court's decision in the shareholder case against the Treasury Department by agreeing with investors that the FHFA had overstepped its authority when it agreed to amend its preferred stock purchase agreement with the Treasury. Investors dubbed the amendment a "net worth sweep" and have alleged it has precluded the GSEs from recapitalizing, a step they see as necessary to exiting conservatorship.

Facebook Inc.'s COO, Sheryl Sandberg, is expected to appear at a hearing before the House Financial Services Committee to testify on the company's plans to launch its digital currency, Libra, among other things, sources told Bloomberg News. The social media giant is negotiating the details of Sandberg's testimony with the committee, and the hearing could happen anytime from late October to later this year, according to the report.

Jefferies Financial Group Inc. reported fiscal third-quarter net income attributable to common shareholders of $48.5 million, or 15 cents per share, compared with $192.6 million, or 55 cents per share, in the fiscal quarter ended Sept. 30, 2018.

In other parts of the world

Asia-Pacific: China drafts rules on loan provisions; India to consider bailout framework

Europe: New CFO at Aviva, Commerzbank; UniCredit sells €730M loans; BNP faces lawsuit

Middle East & Africa: Egypt cuts rates; QNB gets nod for Hong Kong branch; Capitec's expansion plans

Now featured on S&P Global Market Intelligence

Mortgage loan activity at US banks, thrifts rises in Q2: U.S. banks and thrifts reported $2.52 trillion in one- to four-family mortgage loans at the end of the second quarter, up 1.3% quarter over quarter and 1.6% year over year.

US banks reduce reliance on CDs, push for further declines to defend margins: After years of increasing, certificates of deposit became smaller portions of banks' funding bases in the second quarter, and recent decreases in interest rates suggest the trend could continue.

Banks keep using large, pricey deals to leap over $10B asset threshold: Banks continue to find it beneficial to leap over the $10 billion asset threshold with a deal of size. Other bank executives appear to agree. Sandy Spring is set to become the eighth U.S. bank since June 30, 2018, to cross the $10 billion line with the help of a deal, according to S&P Global Market Intelligence data.

The day ahead

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

In Asia, the Hang Seng declined 0.33% to 25,954.81, and the Nikkei 225 dropped 0.77% to 21,878.90.

In Europe, around midday, the FTSE 100 was up 1.12% to 7,433.37, and the Euronext 100 was up 0.38% to 1,093.52.

On the macro front

The durable goods orders report, the personal income and outlays report, the consumer sentiment report, the farm prices report and the Baker-Hughes Rig Count 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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