Weekly Global News Wrap: US regulators warn banks on liquidity risks from crypto deposits; Wells Fargo lays off hundreds of mortgage bankers
And Europe bank stocks could still rally higher, analysts said.
Top US banking regulators issued a fresh warning to banks to be on guard for any liquidity risks from cryptocurrency-related clients.
In a joint statement, the Federal Reserve, Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency said banks should have robust tools in place to monitor funds placed by crypto-asset related entities.
The agencies further warned that deposits placed with banks for the benefit of crypto consumers, as well as stable coin reserves, could be subject to rapid outflows.
Wells Fargo has laid off hundreds of mortgage bankers, including a few bankers who surpassed $100m in loan volumes last year and who even attended an internal sales conference for high achievers.
Under CEO Charlie Scharf, Wells Fargo is pulling back from parts of the US mortgage market, an arena it once dominated. Instead, the bank is shifting focus on serving existing customers and minority communities.
The shift comes after surging interest rates led to a collapse in loan volumes.
Europe's banks, which enjoyed a stellar Q4 that yielded a surge in earnings growth to 15-year highs, could have more room to rally.
Higher ECB rates have already pushed up stock prices, but analysts said that shares still can go higher when compared to their historical average.
"A lot of the good news of how yields have gone up and the relief from no imminent recession is fully reflected in their prices," said Hani Redha, global multi-asset portfolio manager at PineBridge, which has $143.1b under management.