Daily Agenda: Wells Fargo CEO Stumpf Testifies Before Angry Congress

New York bombing suspect apprehended; eastern EU members demand no special deal for Brits; Petrobras cuts investment goals.


David Paul Morris

While investors await monetary policy announcements in the U.S. and Japan scheduled for tomorrow, Wells Fargo CEO John Stumpf will appear today before the Senate Banking Committee to be grilled over sales practices at his San Francisco-based bank, the largest in the U.S. by assets. While Stumpf is expected to aplogize and take full responsibility for oversight failures over employees who opened bank and credit card accounts without permission, the case has drawn great scrutiny and wreaked havoc on the bank’s share price. Wells has agreed to pay a $185 million fine leveled by the Consumer Financial Protection Bureau, a tiny fraction of settlements in financial-crisis capital-markets cases, notably those relating to mortgage-backed securities. Last week, Deutsche Bank rejected a fine of some $14 billion sought by the Department of Justice over MBSs. As senators — many of whom have also called to eliminate the CFPB — harangue Stumpf today, it’s a reminder of how even relatively minor transgressions get caught up in the current toxic regulatory, political and media environment; the Wells mess, after all, never threatened the financial system or the economy. Years after the credit crisis, bankers remain fat targets for lawmakers of both parties. It’s notable that Warren Buffett, the CEO of Berkshire Hathaway, Wells’ largest shareholder, has not publicly commented on the case.

Bombing suspect captured. Ahmad Khan Rahami, identified by the Federal Bureau of Investigation as the suspect in a series of bombings in New York City and New Jersey, was apprehended on Monday by police officers following an exchange of gunfire that left both Rahami and an officer wounded. Rahami, a naturalized U.S. citizen born in Afghanistan, was transferred to a hospital for his wounds, which officials said were not life threatening. Initial charges against him are related to the shootout as law enforcement continues to investigate his involvement in the bombings.

Eastern EU members want no Brexit deals. Today Czech Republic State Secretary for European Union Affairs Tomas Prouza became the latest official from a former eastern bloc member of the EU to assert that his government would move to block any deal that would grant special privileges to the U.K. following its departure. The move comes as EU lawmakers begin to grapple with how to manage trade issues with the soon-to-be former member. A political backlash against immigration, much of it originating from eastern Europe, was a primary driver for the vote in favor of the U.K. exiting the EU.

U.S. to issue rules on driverless cars. In a statement issued on Monday, the Obama administration declared that new rules governing autonomous automobiles would be issued by the federal government later this week. The focus of the outline will be a 15-factor assessment to ensure that test vehicles meet safety requirements following debate between state lawmakers and automobile companies. The White House has invested political capital into the move to put driverless cars on the road, earmarking more than $4 billion in the 2017 federal budget for related projects.

Petrobras reduces investment goals. In a business plan issued today, executives at Petroleo Brasileiro, commonly known as Petrobras, mapped out a path of lower growth and investment over the next five years combined with more assets sales. The state-controlled, publicly traded oil giant has reduced targeted investments to less than $75 billion, down from $98 billion, as energy commodity price projections remain weak in the near term. The plan includes target for debt reduction as well as expanded production levels.