Cuts: Commerzbank is cutting 9,600 jobs or 20 percent of its staff, a much larger move than the 2,000 job cuts rumored a week ago. The bank, the second largest in Germany, is suspending its dividend and revamping operations as loan demand falls sharply in Germany.
Reports of a bailout of the country’s largest bank are greatly exaggerated according to Germany and Deutsche Bank. The bank, facing a financial shortfall of at least €4 billion, has not requested assistance and the government is looking only at hypothetical scenarios. Published bailout scenarios appear to directly violate EU laws, suggesting that government officials may be looking only at the comparative budget impact of a bailout or bank failure.
Wells Fargo has launched an internal investigation into its marketing practices, a first step toward badly needed changes in policy and personnel. Perhaps alarmed at the lack of movement at the bank, states and cities are re-examining their accounts at Wells Fargo. The state of California has announced it will suspend most of its business with the bank for the next 12 months. Among other moves, the state is asking the bank to launch an anonymous ethics reporting hotline. That suggestion comes after revelations that the bank’s current ethics hotline, though supposedly anonymous, identifies employees who report problems and has them fired. The U.S. Department of Labor says it is looking into possible whistleblower violations in the bank’s labor practices. Workers who were fired after reporting violations have sued the bank. The bank seems surprised by the scale of the reaction to its marketing fraud and only yesterday decided to end the sales quota incentive program at the heart of the scheme. The incentives remain in effect today but are being discontinued soon, possibly tomorrow.
