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Week in Review
Wells Fargo & Co. has tapped Bill Daley, former chief of staff for President Barack Obama, to head its public affairs office. Daley will report directly to the newly appointed chief executive of the bank, Charlie Scharf.
Goldman Sachs Group Inc. now offers 20 weeks of paid parental leave, compared to the 16-week standard at other Wall Street firms. The expanded benefit applies to all parents, no matter their gender, and to both primary and secondary caregivers.
The Office of the Comptroller of the Currency closed the City National Bank of New Jersey, the third bank closing in a week. The bank, which held about $120.6 million in assets and $111.2 million in deposits on Sept. 30, was sold to Industrial Bank in Washington, D.C.
According to more than two dozen interviews with finance executives and analysts, the industry is most worried about Sen. Elizabeth Warren of Massachusetts among the Democratic presidential candidates. The industry is donating money to Warren’s political rivals and raising concerns in open letters and conference calls, especially as Warren gains momentum in the polls and after she released a funding program for her “Medicare for all” proposal that would add taxes on billionaires, tax financial transactions including stock trades and annual capital gains taxes for the wealthiest households.
Warren proposed a Medicare for All health care plan that would largely draw its funding from taxes on the wealthy and on corporations, including $9 trillion in new taxes on employers over a decade. Warren also doubled her proposed wealth tax on billionaires to 6 percent from 3 percent and suggested raising $2 trillion from reforming capital-gains taxation.
The Securities and Exchange Commission approved new proxy rules that will raise the threshold for shareholders to submit proposals and require shareholder advisory firms to submit advanced copies of advice to companies before it’s released to investors. The SEC’s two Democratic commissioners opposed the proposal, which will now go to public comment after a 3-2 vote.
A group of academics and former executives from credit ratings firms told the SEC at a hearing that it should end the “issuer pay” business model, in which the seller of bonds also pays firms for their ratings. The group said the system, which one law professor called “fundamentally broken,” incentivizes ratings firms to issue higher grades than they would otherwise.
A glitch in Robinhood Markets Inc. has allowed some to trade with an “infinite money cheat code,” according to a Reddit forum. Robinhood said it is aware of “isolated situations” of the glitch being used, and users who exploit the glitch could be held liable for the money and guilty of securities fraud, a Georgetown law professor said.
The House and Senate are in session this week.
Federal Reserve Chairman Jerome Powell will testify in front of the Joint Economic Committee on Wednesday and House Budget Committee on Thursday.
The Cato Institute will host its 37th-annual monetary policy conference on Thursday.