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Never mind. In a nutshell, that's the retroactive guidance from the Federal Reserve to bankers regarding some of its previously issued confidential orders to fix deficiencies. To be sure, the central bank isn't letting all bygones be bygones -- the more serious matters will still get serious attention. But it's a sign that years of complaints by lenders about over-regulation are having some effect under the supervision of Vice Chair Michelle Bowman. Amid the broader US deregulatory push, Commerzbank's leader is urging European authorities to keep up so the continent's banks aren't left hobbled.
The news on comp was mostly upbeat. Barclays boosted its bonus pool to the highest in at least five years. Payouts rose at JPMorgan and Goldman Sachs, too, and UBS is hiring in Hong Kong after a record year. Even one of America's most prominent socialists benefited from capitalism's big surge, with Wall Street bonuses cutting $5 billion from the budget hole that New York City Mayor Zohran Mamdani has to fill.
But bankers, check your six: Apollo Global Management has set a lending record in its push to rival Wall Street lenders. Finance is already a hard business, and now Black bankers face a rougher ride with the dismantling of DEI programs.
Artificial intelligence is coming next for ... you fill in the blank. This week it was wealth managers. The Monitor, for one, doubts that an AI bot can hand-hold distraught clients when other AI bots drive the market into its next annual once-in-a-lifetime convulsion. Columnist Paul J. Davies expresses some similarly sardonic skepticism. All this might make you fret about your own career prospects, but AI is A-OK with junior bankers because for them, using the technology is already second nature.
The following was produced with the assistance of Bloomberg Automation.
Top stories
- The Fed eases off on some regulations. The central bank signaled to lenders it plans to abandon some of the confidential warnings it previously sent them to improve operations as Vice Chair Michelle Bowman continues to relax the central bank's oversight of US financial firms. Examiners will eliminate outstanding warnings if they don't align with the Fed's recent directive for examiners to concentrate more on immediate risks to a bank's financial health and less on processes and procedures. Separately, Commerzbank's Bettina Orlopp said European proposals for reducing the regulatory burden don't go far enough. EU banks are concerned about a potential competitive disadvantage from the US regulatory rollback.
- Barclays boosts its bonuses. Almost everyone from top to bottom got something at the UK bank, benefiting from its outperformance last year. The bonus pool increased to £2.21 billion, the highest in at least five years and an increase of 15% on 2024. Many more junior staff at the bank are receiving £500 in share awards. Chief Executive CS Venkatakrishnan did okay, too: The firm said it paid him £9.4 million, a 12% raise.
- Dealing with DEI's demise scrambles careers. The dismantling of diversity programs is a source of frustration and confusion for Black and minority bankers, who worry about the impact on their professional growth and the pipeline of diverse talent in the financial industry. Some who've excelled in their roles say they feel less supported in their professional growth now and are struggling amid what they perceive as instances of unfair treatment. They worry about what the shift in corporate norms means for those looking to enter the field.
- UBS seeks wealth bankers in Asia. The Swiss bank plans to hire about 50 bankers for its wealth business in Hong Kong after its North Asia wealth business raked in record revenues last year. UBS also plans to "selectively" expand its wealth team in the Chinese mainland and has a 130-strong Asia Pacific team based in Switzerland to help wealthy individuals in the region spread risk.
- An AI tax tool shakes wealth managers. Their shares tumbled Tuesday amid fear the business could be at risk from automated advice. Investors unloaded Charles Schwab, Raymond James, LPL Financial and Stifel Financial after hearing about a new tool, unveiled by closely held tech startup Altruist, that helps financial advisers personalize strategies for clients and create pay stubs, account statements and other documents. Schwab says if anything, AI is poised to aid wealth management rather than hurt it.
- US deals will tempt Canada's banks. Anyone who follows the US banking industry can tell you a wave of mergers is likely on the way because regulators under the Trump administration have signaled a friendlier stance on consolidation. The natural question, according to Bloomberg's Bay Street Edition newsletter, is whether Canada's big banks will go shopping south of the border once again. They're flush with capital even after a recent share buyback binge.
- Mamdani got a Wall Street bonus, too. Banker bonuses and an aggressive savings plan have helped New York City's expected $12 billion two-year budget shrink by roughly $5 billion, according to Mayor Zohran Mamdani. That's not enough for hizzoner, who says he's still pushing for higher taxes on wealthy residents and corporations to further shrink the deficit, including a 2% personal income tax increase on the richest New Yorkers.
- Barclays confronts a climate conundrum. "Financial institutions may need to choose between financing growth and maintaining the pace of reducing financed emissions," the bank said in its own annual report. The global consensus that existed around climate change just half a decade ago has since been replaced by wildly divergent viewpoints in the US and Europe. That's left banks operating in both markets struggling to find their footing on a major policy subject.
- Fintechs aren't just a threat to banks, they're also eating each other. PayPal has lagged for years behind newer tech-savvy peers, and its new CEO has to figure out how fight back. Agibank had to downsize its initial offering, though it still managed to raise about $240 million. And banks are biting back: Zelle, which could have languished as just a scam-scarred stepchild，hit its stride and pumped up volume 20% last year to more than $1.2 trillion.
- Apollo loans set a record. The New York-based private lender originated $97 billion in the fourth quarter. That brings the tally to $309 billion for the year，which is almost $100 billion more than the year before. It's a milestone in the firm's ambition to become one of the largest underwriters on Wall Street. Notable contributions included Apollo's Capital Solutions business，which originates loans across direct lending，asset-backed finance and opportunistic credit deals.
People moves
- Deutsche Bank aims for the big leagues. Germany's largest bank added Sowmya Kotha in London and Joshua Frank in New York to focus on sports business. It's ramping up efforts to finance sports investments for super-rich clients as the sector increasingly attracts higher valuations and matures as an asset class.
- Banco Sabadell discloses a surprise departure. Chief Executive Officer César González-Bueno is leaving just a few months after he led the lender's successful defense against a hostile bid from rival BBVA. Marc Armengol, who runs the UK unit TSB that Sabadell sold to Banco Santander SA last year, has been named as successor.
The big number
$9.4 billion
The amount of assets under management at O'Connor after Cantor Fitzgerald is done absorbing the wounded hedge fund it acquired from UBS. That's down from about $11 billion when the deal was announced last May.
Bonus pools get a boost. JPMorgan Chase, Goldman Sachs and Bank of America increased their bonus pools for bankers and traders by at least 10%, as the businesses benefited from a banner year in dealmaking and market activity. Executives began communicating the compensation decisions to middle managers in recent weeks, as is common this time of year, the people said. The average figures described by insiders don't reflect the sweetest rewards in store for rainmakers, or the disappointment in store for those tagged as underperformers.
Bloomberg Opinion
- Global capital's US breakup is long overdue. The concentration of financial capital in the US is economically inefficient, financially risky and ultimately unsustainable, writes Sony Kapoor. Global savings are flowing "uphill" from younger, faster-growing economies into a slowing and aging one. A rebalancing of capital away from the US and toward emerging and developing economies is underway, driven by factors such as fading US tailwinds, rising concentration risk, and the hypersaturation of investor portfolios with American assets.
- The future is coming; maybe you aren't in it. "Anthropic's effort to school its Claude models in financial modelling sent a cold shiver down the spines of bankers and analysts," writes columnist Paul J. Davies. Is this the beginning of the end for financial professionals? Will AI money managers create a utopia in which everyone gets a basic income and financial advisers become irrelevant? Davies demurs, but he reminds us, "few others have been so consistent in reinventing ways to employ people and charge fees for products the world never knew it needed."
Before you go...
Junior bankers are fine with AI. While banks tout efficiency gains they've both achieved and project from AI, fears persist that the technology could hollow out entry-level roles (or even more). But a different narrative may be emerging: Employers are onboarding classes of financial analysts for whom using AI models is second nature. It's possible their fluency, and their openness to experimenting with evolving tools, may be giving younger workers a leg up on their elders.