Wells Fargo fired its CEO, but the move came with a surprisingly generous severance package. An insider was appointed as the new CEO. There are no signs of the bank adjusting its strategy or business model. Consumers are abandoning the troubled bank, with checking accounts declining the fastest. Nevertheless, the bank’s profit fell just 9 percent from the year before.
For years RBS systematically undermined its U.K. business customers according to a new report. In an intentional strategy, the bank abruptly raised interest rates on some 16,000 potentially vulnerable businesses in order to force them into restructuring. The bank would cut off credit, delay collecting deposits, or impose surprise fees to hurt a business’s cash position. Bank employees were paid bonuses for finding creative ways to squeeze a business. The bank then gained billions of pounds from restructuring fees while its customers, in many cases, went bankrupt.
Cuts: Deutsche Bank formalized its hiring freeze. It is said to be preparing to cut an additional 10,000 jobs and is looking for ways to accelerate its restructuring plans. Germany says it has ruled out any possibility of investing in the bank as part of a rescue package. Lloyd’s outlined 1,200 layoffs of its own. There are rumors of cuts at multiple banks in London and Singapore.
Arrested: The Singapore operations manager of Swiss bank Falcon Private Bank. Singapore has also revoked the bank’s license and started proceedings against former managers at the bank. The case involves money laundering of around $4 billion in funds connected to 1MDB.
Indicted: Brazil’s former president Lula da Silva and ten others face money laundering and conspiracy charges related to bribes used to arrange financing for an engineering company project in Angola. Prosecutors believe Lula was paid speaking fees for speeches he never delivered.
Settled: Monte dei Paschi will forfeit €10 million and pay a fine of €600,000 for false reporting of transactions and related crimes. The executives and managers involved are no longer with the bank.