U.S. regulators are concerned about millions of non-performing auto loans. The usually reliable lending segment has become one of the most troubled since last year. I have not yet seen a plausible explanation for why so many drivers in 2014 and 2015 bought SUVs they couldn’t afford.
President-elect Donald Trump’s appointments of Wall Street figures at Treasury and Commerce reflect his long history as a Wall Street insider, but may also hint at worries about a financial crisis within the next two years. The two appointees’ career histories are built on default, bankruptcy, and foreclosure.
The future of Italy’s troubled banks may hinge on a sketchy constitutional amendment that voters will decide on Sunday. Voters are expected to vote no on a package of hastily drafted reforms that would rewrite one third of the constitution to concentrate power in the prime minister’s office, taking away most powers of governors and the senate. The prime minister has said he will resign in the event of a no vote. That could create a power vacuum lasting several months and scuttle bank bailout plans. Financial Times has published a list of 8 Italian banks that are likely to fail in that scenario. Bank stocks have helped drag down stocks generally, with major stock indexes in Italy down 20 percent this year. This week, concern for Italian banks has contributed to a decline in stocks across the euro zone.
Royal Bank of Scotland (RBS) failed a U.K. stress test and says it will need to raise an additional £2 billion in capital. Some of that is expected to come from cost-cutting measures to be announced early next year. The bank is 77% state-owned.
Standard Chartered also did poorly in its stress test. According to published reports, it plans to cut 10 percent of jobs in its big-money business segments.
The NCUA liquidated First African Baptist Church Federal Credit Union, a church-affiliated credit union with 261 members in Sharon Hill, Pennsylvania. Member accounts were transferred to American Heritage Federal Credit Union.