Morgan Stanley focuses on CEO selection; BNP Paribas questioned over e-yuan

TOP NEWS IN GLOBAL FINANCIALS

– The selection of Morgan Stanley CEO James Gorman's successor will be the focus of the summer and fall meetings of the US bank's board of directors, Reuters reported, citing an unnamed source. Candidates reportedly include Morgan Stanley co-Presidents Ted Pick and Andy Saperstein and investment management chief Dan Simkowitz. Gorman, meanwhile, aims to resolve some regulatory matters before stepping down from the role, according to the report. Gorman plans to leave the post in May 2024.

– Some US politicians are asking France's BNP Paribas SA about its work on China's digital currency project amid fears by lawmakers that the electronic yuan could eventually bypass the US financial system, Bloomberg News reported, citing people familiar with internal conversations. The French bank, which is collaborating with state-backed Bank of China Ltd. to facilitate corporate clients' transactions in digital yuan through e-wallets, was reportedly contacted by a Republican congressional aide asking about the matter. BNP declined to comment to Bloomberg. Other global banks with similar work related to the digital yuan, or e-CNY, may also have received questions, the news outlet noted.

➤ European banks show ample capital buffers as Basel III reforms near conclusion

Europe's largest banks are holding on to substantial excess capital with about 18 months to go until implementation of the final post-global financial crisis rules.

➤ Bank regulators give more adverse Community Reinvestment Act ratings this year

The number of banks receiving "needs to improve" Community Reinvestment Act ratings jumped in the second quarter, reaching the highest quarterly total in nearly three years.

➤ Middle East fintech outlook optimistic amid global headwinds

In 2023-to-date, equity investments in these businesses have already surpassed the full-year levels in 2018, 2019 and 2020, S&P Global Market Intelligence data shows.

READ MORE about the liquidity crunch and the fallout for the financial sector in our new Issue in Focus.

AMERICAS

– Citigroup Inc. is assessing its one-year-old digital assets custody partnership with Swiss financial technology firm Metaco SA while starting informal talks with other providers, Bloomberg reported, citing people with knowledge of the matter. It came after Ripple Labs Inc., which has been in a dispute with the US Securities and Exchange Commission, according to the report, announced its acquisition of Metaco last month. A representative for Citi declined to comment and a Ripple spokesperson did not respond to the news outlet's requests for comment, the report said.

– Big US banks including JPMorgan Chase & Co., The Bank of New York Mellon Corp., Wells Fargo & Co. and U.S. Bancorp, and big technology vendors Fidelity National Information Services Inc., Fiserv Inc. and Jack Henry & Associates Inc. are on the early adopter list of the central bank's FedNow real-time payment service, American Banker reported. The much-anticipated service is set to launch in late July, according to the report.

Click here for more of the day's essential bank and financial services news in the US and Canada.

EUROPE

– Poland's banking association estimates that local banks may have to set aside 42 billion zlotys ($10.29 billion) in additional legal provisions for their Swiss franc mortgage portfolios between 2023 and 2025, following a June 15 ruling of the European Court of Justice that was unfavorable for the sector, news agency PAP reported. Polish banks have so far set aside 40 billion zlotys in provisions. Santander Bank Polska SA, a unit of Spain's Banco Santander SA, said it will set aside a provision of 662 million zlotys in the second quarter for legal risks related to its Swiss franc mortgage portfolio.

– Italy-based Intesa Sanpaolo SpA's private banking arm will sell a 51% stake in Swiss asset manager Asteria to UK-based investment manager Man Group PLC. Fideuram - Intesa Sanpaolo Private Banking SpA will retain a 49% stake in Asteria, which manages environmental, social and governance-oriented funds. Financial details of the transaction, which is expected to be completed by year-end, are not available.

Click here for more of the day's essential financial news in Europe.

MIDDLE EAST & AFRICA

– The IMF said Lebanon's four-year economic meltdown has been worsened by "a failure to take much needed policy action, hampered by a lasting political crisis and resistance from vested interests to reforms," Reuters reported. The nation's local currency has lost about 98% of its value and its GDP has contracted by 40%, the IMF noted, adding that inflation jumped into triple-digits and drained the central bank's foreign-currency reserves, according to the report.

– Israel's Competition Authority will start discussions with the central bank concerning five of the country's largest banks being potentially involved in an oligopoly, Reuters reported. The competition watchdog, which began an investigation into the banks in September 2022, wants to subject the banks to directives in consumer checking and savings accounts.

ASIA-PACIFIC

– New Zealand's central bank said it would step up its monitoring of stablecoins and cryptocurrency assets. This followed public input highlighting the effects these new forms of private money could have on the financial system and monetary sovereignty. The central bank's director of money and cash, Ian Woolford, said while increased vigilance is needed, a regulatory approach is not needed now.

– ICICI Bank Ltd.'s board approved a draft scheme for delisting the equity shares of its ICICI Securities Ltd. unit. In a stock exchange filing, the Indian lender said it would issue 67 equity shares of the bank to ICICI Securities' public shareholders for every 100 shares held, subject to approvals from regulators and the bank's shareholders and creditors. The move would make ICICI Securities a wholly owned unit of ICICI Bank. In a separate filing, ICICI Securities said its board approved the proposed draft scheme.

Click here for more of the day's essential financial news in Asia-Pacific.

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