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Home » Daily Briefing » Daily briefing - 08 March 2019

Daily briefing - 08 March 2019

Jack Dorsey in London. Pic by Rory Cellan.

The equivalent of belatedly shutting a country-sized barn door, banks in the Nordic countries have launched a massive recruitment drive to hire compliance professionals. As a compliance worker based in Copenhagen told Reuters: "We've become the new 'business rock stars'". The delusional compliance professional needs to up his game: DJ D-Sol over at Goldman knows that kids these days are into banging EDM, not dad rock. "He saw a 50 percent jump in wages the last time he changed job to almost 1.2 million Danish crowns ($182,000) per year and is regularly contacted by headhunters. "Money-laundering was the buzzword of the year last year, and I wouldn't be surprised if compliance officer became the buzzword this year," he said. Ironically, there was no lack of compliance professionals in the banks prior to the wave of money-laundering that swept through the Baltic and Nordic countries. There was no end to the ticking of boxes as billions of dollars in illicit money flowed out of Russia, yet few people called stop from inside the banks. Money-laundering controls in Denmark were "a joke", said Bill Browder, who continues to pursue justice for murdered Russian lawyer and whisteblower Sergei Magnitsky.

There's been much written already this year about bitcoin and cryptocurrencies, from JPMorgan's announcement of a JPMCoin, to news last week that Facebook is looking to combine its various networks so it can offer payments across Messenger and WhatsApp. Despite their roles at the top of major social networks, there's a world of difference between Jack Dorsey at Twitter and Mark Zuckerberg at Facebook. Even Zuckerberg's deer-in-the-headlights mien is in contrast to Dorsey, who looks as though he has stepped off the set of Game of Thrones for a quick chat about digital assets and consumer finance. Facebook has been talking up its own book, but Dorsey has been stuck to his guns on bitcoin being the native currency of the internet. Dorsey said this week that he invests $10,000 a week into bitcoin, the most allowable from the Cash App. And Dorsey has form, launching Square not long after Twitter. "Dorsey added that there are currently no plans to add support for any other cryptocurrencies to the Cash App, which actively discourages its users from day trading bitcoin and bans the buying of bitcoin with credit cards due to the financial risks associated with bitcoin volatility."

Irate seems to describe the reaction well: Bloomberg writes that the tax cuts offered by incoming president Donald Trump provided the US banking industry with the wherewithal to cut staff and slow lending. "Major U.S. banks shaved about $21 billion from their tax bills last year — almost double the IRS's annual budget — as the industry benefited more than many others from the Republican tax overhaul," writes Bloomberg. "By year-end, most of the nation's largest lenders met or exceeded their initial predictions for tax savings. On average, the banks saw their effective tax rates fall below 19 percent from the roughly 28 percent they paid in 2016. And while the breaks set off a gusher of payouts to shareholders, firms cut thousands of jobs and saw their lending growth slow." One Redditer noted that the banks saved more than the amount requested by NASA in 2019 for deep space exploration. Another was blunter: "Trickle down doesn't work. It never has and it never will. The Trump corporate tax cut was never meant to benefit the middle class, it was simply a giveaway to corporations and the wealthy."

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