1 MONGOLIA'S TOURISM REVENUE INCREASES BY 20 PERCENT WWW.NEWS.MN PUBLISHED:2018/07/16      2 WATER LEVELS OF MAJOR MONGOLIAN RIVERS EXCEED ALARM LINE WWW.XINHUANET.COM PUBLISHED:2018/07/16      3 CHINA SETS RECORD DAILY STEEL OUTPUT FOR THIRD MONTH IN A ROW WWW.REUTERS.COM PUBLISHED:2018/07/16      4 RUSSIAN RETAILERS, HOTELS EMERGE AS WORLD CUP WINNERS WWW.THEMOSCOWTIMES.COM PUBLISHED:2018/07/16      5 BIOGRAPHY OF TAVAN TOLGOI RESIDUAL COAL DEPOSITS WWW.ZGM.MN PUBLISHED:2018/07/16      6 NAGOYA BASHO LOSES LAST OF THREE YOKOZUNAS WWW.MONTSAME.MN PUBLISHED:2018/07/16      7 CHINA'S GDP HITS 6.7% IN Q2 OF 2018 WWW.CHINADAILY.COM.CN PUBLISHED:2018/07/16      8 US-CHINA TRADE WAR DIMS BRIGHT FUTURE FOR SEMICONDUCTORS WWW.ASIA.NIKKEI.COM PUBLISHED:2018/07/16      9 RIGHTS GROUPS URGE BETTER TREATMENT FOR MONGOLIA CHILD JOCKEYS WWW.REUTERS.COM PUBLISHED:2018/07/16      10 TPP CHIEF NEGOTIATORS TO MEET IN JAPAN WWW.NHK.OR.JP PUBLISHED:2018/07/16      МАНАЙ УЛСЫН ЗЭЭЛЖИХ ЗЭРЭГЛЭЛ ДЭЭШИЛЖЭЭ WWW.EAGLE.MN НИЙТЭЛСЭН:2018/07/16     “ЭРДЭНЭС-ТАВАНТОЛГОЙ” 40 САЯ ДАХЬ ТОНН НҮҮРСЭЭ ОЛБОРЛОЖЭЭ WWW.NEWS.MN  НИЙТЭЛСЭН:2018/07/16     1,5-2 САЯ ТӨГРӨГИЙН ЦАЛИНТАЙ ЖОЛООЧИЙН АЖЛЫН БАЙРНЫ БҮРТГЭЛ ЭХЭЛЛЭЭ WWW.ZINDAA.MN НИЙТЭЛСЭН:2018/07/16     ОЛОН МЯНГАН НИСЭХ ОНГОЦ ШИНЭЭР ҮЙЛДВЭРЛЭХ ШААРДЛАГАТАЙ WWW.MONTSAME.MN НИЙТЭЛСЭН:2018/07/16     КРИПТОВАЛЮТЫН ТАЛААРХ ХОРООНЫ БАЙР СУУРЬ ХЭВЭЭРЭЭ WWW.GOGO.MN НИЙТЭЛСЭН:2018/07/16     ОРОСЫН ЭДИЙН ЗАСГИЙН ӨСӨЛТӨД ДАШТ-2018 НӨЛӨӨЛӨХ НЬ WWW.MONTSAME.MN НИЙТЭЛСЭН:2018/07/16     ЗҮҮН ӨМНӨД АЗИ ХАНШАА ХАМГААЛЖ ЭХЛЭВ WWW.ZGM.MN НИЙТЭЛСЭН:2018/07/16     АЯЛАЛ ЖУУЛЧЛАЛЫН САЛБАРААС 400 ГАРУЙ САЯ ДОЛЛАР ОЛЖЭЭ WWW.DNN.MN НИЙТЭЛСЭН:2018/07/16     МОНГОЛЫН ЭДИЙН ЗАСГИЙН БҮТЭЦ ЭМЗЭГ ХЭВЭЭР БАЙНА WWW.GOGO.MN НИЙТЭЛСЭН:2018/07/10     МОНГОЛ, ВЬЕТНАМЫН ГАДААД ХАРИЛЦААНЫ ЯАМ ХООРОНДЫН ЗӨВЛӨЛДӨХ УУЛЗАЛТ БОЛОВ WWW.NEWS.MN НИЙТЭЛСЭН:2018/07/10    

Events

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"Open to Export" ICC WTO International business award ICC WTO London

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Deutsche Bank: From bombs and bravado to risks of a bailout www.bbc.com

Deutsche Bank is under the most pressure a major lender has faced since the financial crisis, but many trace its woes back beyond the banking crash.

On a cold November morning in 1989, Alfred Herrhausen left his house in the Hessian town of Bad Homburg, climbed into his chauffeur-driven Mercedes-Benz, and settled in for the routine journey to his Frankfurt office.
A few minutes later, he was dead.
As the head of West Germany's largest lender, Deutsche Bank, Mr Herrhausen had been a target of the anti-capitalist, radical-left Red Army Faction.
The group opposed the 59-year-old banker's "imperial" ambitions: his advocacy of closer European integration, his counsel of then-Chancellor Helmut Kohl, and his championing of economic internationalism.
But although the attackers succeeded in taking Mr Herrhausen's life, they could not extinguish his unique vision, one that paved the way for Deutsche Bank's soaring success in the Nineties and through the new millennium, and one that may have sown the seeds of its recent decline.
'Imperial ambitions'
Just three weeks before the attack, Deutsche, which for decades focused on servicing Germany's home-grown industrial heavyweights, had made its first foray into the heady world of investment banking, by buying the British merchant bank Morgan Grenfell.
The acquisition, masterminded by Mr Herrhausen, was designed to catapult Deutsche to the top of the global banking ladder, and to broaden the institution's reach beyond Germany's - and indeed Europe's - borders.
Alfred Herrhausen was the mastermind behind Deutsche's expansion
What Mr Herrhausen had realised was that the German market, "dominated by savings and co-operative banks, and not-for-profit institutions, was no place for a private bank to grow," explains Deutsche Bank's former chief economist, Prof Thomas Mayer.
Whatsmore, as the West German economy boomed in the lead-up to reunification, the likes of Siemens, Daimler and Volkswagen, some of Deutsche's biggest clients, were looking for access to capital markets on which to issue corporate bonds, rather than relying on more traditional banking services.
In the following years, in an attempt to beef-up its international offering, Deutsche spent billions of dollars on poaching the best talent from American titans such as Merrill Lynch - including Anshu Jain, who went on to spearhead the bank's global expansion until his resignation last year amid serious accusations of wrongdoing in the lender's investment unit.
Such was the culture change, that, as legend has it, Deutsche's name had to be spelt out phonetically on the signs in its London offices, as some of the foreign employees charged with diversifying the bank's operations had trouble with German pronunciation.
The new recruits were, by design, cut from a different cloth than Deutsche's German employees. Mr Herrhausen had talked of bringing an "Anglo-Saxon" financial culture to the bank, with the hope that they would inject some Wall Street bravado to the rather conservative, staid organisation.
'Cut corners'
For at least a decade, the plan worked. Deutsche's profits soared, and its share-price rocketed. At one point, it was the sixth biggest bank in the world, as respected in Manhattan as it was in Munich.
Even in 2008, when the financial crisis led European stalwarts such as UBS and Credit Suisse to seek bailouts, Deutsche weathered the storm on its own.
But unlike those banks, who downsized in the wake of the global crash, Deutsche "missed the point where they needed to rebalance their business model," according to one financial journalist who has been scrutinising the company for years.
Deutsche has been accused of becoming more arrogant after surviving the downturn.
Predictably, the London and New York based financiers who transformed Deutsche into a global player were less risk-averse than their Frankfurt colleagues, and, as Prof Mayer alleges, they cut corners.
"You can attribute many of Deutsche's current problems to the army of investment bankers who joined in the 90s," he says. "They were given a mandate to push the bank into the investment banking league tables, and they took reputational risks.
"They were in the business of making money, and they did not proceed cautiously."
Deutsche Bank clockImage copyrightREUTERS
Deutsche, which now employs roughly 100,000 people across more than 70 countries, is paying a heavy price for those risks - in fact the second biggest since the financial crisis.
A whopping $14bn fine from the US Department of Justice for mis-selling mortgage backed securities, which isn't much less than the size of Deutsche's current market capitalisation, is just the latest penalty for a litany of misdeeds, including manipulating Libor rates and fixing gold prices.
Despite a famously impressive art collection, the bank has precious few assets left to help British chief executive John Cryan raise much needed capital.
Ironically, Deutsche, which paid billions of euros in bonuses to its star bankers even after suspending its dividend payments to shareholders, is struggling to keep key staff.
'World's most dangerous'
It is not just Deutsche's investors who are concerned. After more than 25 years of vigorous diversification, including a string of small acquisitions across the world, the bank's tentacles reach many parts of the global economy.
The IMF has called Deutsche the world's most dangerous bank, and as one insider explains "if Deutsche Bank goes down, everyone else has a problem too".
But although the German giant is in dire straits, its demise is anything but inevitable.
For one, there are now regulatory regimes in place, which mean that various bondholders and large depositors would suffer a haircut to help shore up the bank's balance sheets.
Additionally, the long shadow cast by the collapse of Lehman Brothers has left world leaders with little appetite for allowing another large lender to hit the buffers.
Nonetheless, a government bailout seems unlikely, at least in the very near future.
EU legislation makes it difficult for countries to inject cash into a failing financial institution without making sure investors take a hit first - a point Angela Merkel has been keen to make to the her Italian counterpart, Matteo Renzi, who was prevented from using Roman money to prop up the failing Monte De Paschi bank.
Plus, as Prof Mayer explains, there is hardly any love left for the once-iconic bank among ordinary Germans, who tend to see the beleaguered lender as more of a national embarrassment.
Whatever Deutsche's fate, the almost 150-year old bank's rise and fall has served, as Prof Mayer puts it, to "refocus people's attention" on the problem that faced Alfred Herrhausen three decades ago - expansion inevitably comes with exposure.
"It was the right decision to go into investment business," the Deutsche veteran, who left the bank in 2012, insists.
"But there were difficulties in execution".
It is hard to know what Alfred Herrhausen would make of the mistakes made in pursuit of the mission he helped set in motion, and of Deutsche's prolonged failure to face up to its frailties.
But a clue to how he would handle the current crisis may lie in the inscription on the two memorial pillars erected on the site of the pioneering chief executive's murder.
A quote by Austrian poet Ingeborg Bachmann, it reads: "Die Wahrheit ist dem Menschen zumutbar".
"People," it translates, "can handle the truth".

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Russia climbs up global competitiveness index www.rt.com

Russia has slightly improved its ranking in the global competitiveness index (GCI); up two places to 43rd of 138 countries.
 
“The Russian Federation fell into recession in 2015, with its GDP shrinking by 3.7 percent, but nonetheless remained rather stable in terms of its competitiveness,” according to the 2016-2017 report by the World Economic Forum (WEF). Low prices for commodities affect Russia less than other European countries with the public debt remaining relatively low and gross national savings almost unchanged, according to the WEF data. The analysts explain the country’s better result by “strengthened fundamentals,” such as the quality and quantity of education (up six positions), innovation capacity (up 12) as well as an improved domestic business environment along with less negative domestic business sentiment than expected. However, the data shows that commodity prices still have a significant impact on the economy. “Sharply reduced public revenue and higher inflation, the Russian macroeconomic environment is much less sound, dropping to 51st place,” the report says. The financial sector is still struggling with a lower inflow of capital related to mineral revenues and “quasi-closure of international financial markets to Russian entities.”
 
The GCI is calculated on the basis of 113 economic indicators covering 12 categories. The measure takes into account such factors as institutions, infrastructure, macroeconomic environment, health, education and training, goods market efficiency and labor market, financial market development and innovations. Switzerland was ranked as the most competitive economy in the world, for the eighth straight year, followed by Singapore, the United States, Netherlands and Germany. The top ten list included Sweden, Britain, Japan, Hong Kong and Finland.
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BP and Shell investors urged to reward bosses for backing green energy www.theguardian.com

Shell and BP’s pay plans encourage their bosses to dig for oil instead of investing in low-carbon energy and should be overhauled by shareholders, according to the campaign group ShareAction. Investors in the oil companies should use binding votes on pay policies next year to scrap short-term targets and reward chief executives for working towards the target set in Paris last December to limit global temperature increases to 2C or less, the responsible investment group says in a report. ShareAction said international pressure to reduce the impact of climate change was an existential threat to companies whose business depends on extracting fossil fuels. Persisting with pay plans that reward old measures of success risk Shell and BP becoming obsolete and ultimately going bust, the report says. Large companies face binding shareholder votes on three-year pay policies at next year’s annual general meetings under rules introduced in 2013. Shell and BP’s policies will take them up to 2020 when pledges under the Paris treaty could be strengthened, making the votes important, ShareAction said. Shareholders voted against the £14m pay package for Bob Dudley, BP’s chief executive, and ShareAction said the pay policy votes would be a test of investors’ resolve. Shell’s chief executive, Ben van Beurden, was paid €5.85m (£5m) last year. Catherine Howarth has called for BP and Shell investors to ‘walk the talk’ next year. Photograph: Linda Nylind for the Guardian Catherine Howarth, ShareAction’s chief executive, said: “Responsible investors who are serious about climate risk have a crucial opportunity to ‘walk the talk’ at BP and Shell next year by pushing for remuneration policies designed make these companies commercially resilient in a low carbon world – and voting down policies which fail that test.” ShareAction said bonuses were largely tied to shareholder returns, project delivery, replacement of reserves and measures that encourage oil extraction. Long-term bonuses were paid after a few years yet the effects of Van Beurden and Dudley’s decisions lasted for decades, ShareAction said. ShareAction called on investors to push BP and Shell to develop low-carbon energy, remove outdated performance measures and reward bosses for working towards the Paris targets. Van Beurden and Dudley have said they support a shift to renewable energy but have resisted pressure to make a radical switch to their companies’ activities, which have attracted increasing opposition. BP’s attempt to drill in a marine reserve in the Great Australian Bight was delayed for the third time on Wednesday and Shell has started production at the world’s deepest underwater oil and gas field in the Gulf of Mexico. Van Beurden has argued new oil supplies are needed to meet demand from a growing, more urban and prosperous global population. Dudley has said governments should do more to prevent energy being wasted and that oil companies should not be required to go lead the search for renewable sources. BP said it had been in talks with shareholders over pay and would consult them on its proposed pay policy later this year. Shell said it would read the report with interest.
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BlackBerry to stop making phones www.theguardian.com

BlackBerry is shutting down its phone business after 14 years of making handsets. The company’s devices were once the phone of choice for professionals, providing access to emails on the move, but BlackBerry has struggled to keep up with competition from rivals Apple and Samsung as mobile users increasingly opt for touchscreens. The Canadian company is now focusing on making software and will outsource the manufacture of hardware to other companies. John Chen, the company’s executive chairman and chief executive, said: “We are focusing on software development, including security and applications. The company plans to end all internal hardware development and will outsource that function to partners. This allows us to reduce capital requirements and enhance return on invested capital.” Chen said earlier this year that he would know by September whether the loss-making handset business was likely to become profitable. John Jackson, analyst at IDC, said BlackBerry’s decision to stop making devices was “entirely sensible and probably overdue”. He added: “Software revenue and the margin profile associated with that is where the focus should have been, and now can be.” CMC Markets said the death of the BlackBerry handset marked the end of an era for a company once considered one of the world’s major smartphone vendors. CMC said that at its peak in September 2013, there were 85 million BlackBerry subscribers worldwide, but by March 2016 the number had fallen to 23 million as it lost out to the Android and iOS platforms. Colin Cieszynski, chief market analyst at CMC, said: “Today marks a big transition for BlackBerry and the end of an era for the company. The company plans to shift its focus fully to communications and security software development, reducing capital requirements and increasing margins.” BlackBerry shares rose in pre-market trading after it announced better-than-expected earnings for the second quarter and revised up earnings expectations for the full year to a range of zero to five cents a share, compared with current market expectations of a 15-cent loss. Cieszynski said traders were shrugging off a shortfall in revenues, which were lower than expected at $352m. “Traders have decided to focus on the 89% revenue growth over the year in their software services business,” he said. BlackBerry also announced that its chief financial officer, James Yersh, was leaving the company at the end of October for personal reasons. He will be replaced by Steven Capelli, the former Sybase executive.
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New Tianjin road cuts transportation time, cost to Mongolia, Russia www.chinadaily.com.cn

For traders and buyers in Russia or Mongolia who order fresh food from China will see soon the transit time reduced by two-thirds to three days, as the China-Mongolia-Russia international road freight route was launched in Tianjin last month, which aims to shorten cargo transportation time between Tianjin, Mongolia and Russia. It usually took more than 10 days for goods to reach Mongolia and Russia from Tianjin by rail before the international road freight route was established, and the options were limited as mostly storage-tolerance goods could be transported to maintain the quality of the goods. Now the situation has changed as Tianjin is accelerating the construction of China-Mongolia-Russia economic corridor by eliminating the traffic bottleneck of road transport. So far, Tianjin has been connected to two kinds of transport routes, namely rail transport and road transport, which both directly go to Ulan Bator of Mongolia and Ulan-Ude of Russia. "Not only the transport time but also the cost will drop significantly," said Guo Xin, general manager of Nanning Xin Jin Hang Materials Co Ltd. Starting from Guangxi, trucks can exit to Mongolia or Russia through Tianjin port whereas previously they needed to drive extra 1,000 kilometers via Sui Fenhe port, he added." At least 10 percent cost is reduced." "Shortly, our company will import fish produced in Lake Baikal and Russian beer that are popular with Chinese, shortening the transport time will also lead to reduction in sales price." Jia Kefu, secretary of party branch of Tanggu dangerous goods carriage yard of Tianjin Transportation Group Binhai Co Ltd, said: "Freight can directly reach Mongolia or Russia without a double transfer." His company used to trade goods to Mongolia, and goods must be transferred to local trucks. "Special cross-border pass and frontier office will be set up on the China-Mongolia-Russia international road freight route to save clearance time," said Zheng Ping, vice-director of Tianjin Municipal Transportation Commission. The three regions - Tianjin, Mongolia and Russia - are forging closer economic ties as cargo transport lines are continuously being improved. "We plan to set up a logistics park located in Tianjin to promote the trade between Tianjin and Mongolia, and design of the logistics park has already begun," said Bart Kiki G, minister-counselor of the Mongolian embassy in Beijing. "More vegetables and fruits from Tianjin will be exported to Mongolia with a good cold-chain logistics system to form," he added.
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AB InBev-SAB Miller deal approved by shareholders www.bbc.com

Budweiser owner Anheuser-Busch InBev's £79bn takeover of rival SAB Miller is set to go ahead after the shareholders of both firms approved the mega-deal. The deal is expected to be completed on 10 October and will create the world's largest beer firm. Global regulators have already approved the deal, which AB InBev says will create "the first truly global brewer". The enlarged group - which will produce almost a third of the world's beer - will take the AB InBev name. The deal was agreed last year, but in July AB InBev was forced to raise its offer following a fall in the pound in the wake of the Brexit vote. AB InBev increased its offer by £1 a share to £45 a share. Brand sales AB InBev chief executive Carlos Brito said: "We are committed to driving long-term growth and creating value for all our stakeholders." SABMiller counts Peroni, Pilsner Urquell, and Grolsch among its stable of brands, while AB InBev produces Budweiser, Stella Artois, Corona, and Beck's. However, to get the deal past regulators, AB InBev has already agreed to sell SABMiller's Peroni, Grolsch and Meantime brands to Tokyo-based drinks company Asahi. The takeover is expected to boost AB InBev's prospects in developing markets in Africa and China, where a SABMiller joint venture produces Snow, the world's best selling beer by volume. 'Misconduct' Hours after shareholders backed the deal, the US Securities and Exchange Commission announced AB InBev agreed to pay $6m (£4.6m) to settle an unrelated investigation. The SEC found the brewer used promoters to make improper payments to government officials in India and sought to stop a whistleblower from talking to the SEC.
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Chinese investors pay A$88.88m for Sydney property www.bbc.com

Business sense suggests you try to buy property at the lowest possible price, but that was not the case for one property in Sydney, Australia. It was just bought by Chinese buyers for A$88,888,888.88. The number eight is considered lucky in Chinese as it sounds like the word for "prosperity". That luck might come in handy - the deal comes just as Sydney was awarded the fourth spot on UBS's global housing bubble index. Sydney follows Vancouver, London and Stockholm in the ranking which seeks to identify the world's most risky real estate markets. The lucky price of A$88,88m (US$68.2m; £52.5m) bought 333 Kent Street in Sydney's central business district. Fortunately it's not a triple four address, as four is pronounced similarly to the word "death" and so considered unlucky. The offer was made by Chinese firm Bridge Capital and Australian iProsperity Group, who plan to turn the property into a residential building and hotel with a view of the Darling Harbour. "This is not the first time that Chinese buyers have chosen to offer a price that includes numbers that are considered lucky," Vince Kernahan of Colliers International, the real estate company handling the sale, told the BBC. In this particular case, "the buyer's offer was very close to several other offers. They just chose these numbers for luck and as it turned out their luck was with them". Foreign investors drive up prices According to Swiss bank UBS, the housing market in Sydney "has been overheating since the city became a target for Chinese investors several years ago". The bank's annual housing bubble index looks at real estate markets around the world to spot the ones where the price rise is "out of touch with fundamentals" and "out of proportion to differences in local economic growth and inflation rates". The report said housing prices peaked in the second half of 2015 and since then been slightly corrected. But the growing demand from foreign investors has led to the residential market "tripling in value over the last three years." "Increasing supply and further tax measures to reduce foreign housing investments may end the price boom rather abruptly." According to the UBS index, Sydney is followed by Munich, Hong Kong and San Francisco.
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Canadian mining company and global private equity firm partner to develop the Silvertip Mine www.mining.com

Vancouver-based JDS Silver Inc. has just received USD$65 million from resources-focused private equity firm Denham Capital. The money will be used to complete the construction and bring into production the Silvertip Mine, located within the Silvertip Creek valley in the Tootsee River Watershed in northern British Columbia. Silvertip is a high-grade silver-lead-zinc mine with 30% zinc equivalent grade. JDS Silver began construction in December 2015 and expects the asset to begin production in late September 2016. The company also plans to produce silver and lead in concentrate from the mines. The property has been extensively explored by different companies since 1957. Such exploration programs resulted in the construction of a 26-kilometre access road, 2.7-kilometre of underground workings, 86,000 metres of drilling, two bulk sample programs, 20 years of environmental baseline data and significant site infrastructure. Regarding the new partnership aimed at making the mine fully operational, JDS Silver CEO Jeff Stibbard wrote in a press release: "The combination of our development and operational capabilities along with the firm’s equity capital and strategic expertise has allowed us to expedite the construction and development of the Silvertip Mine into production.” In the same statement, Denham Capital Director Caroline Donally explained that the partnership is a result of JDS Silver’s proven track record, comprehensive engineering and evaluation knowledge.
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Kim reappointed as World Bank chief www3.nhk.or.jp

World Bank officials say they have re-appointed Jim Yong Kim as their president for a second 5-year term. His current term will expire in June next year. Kim became World Bank president in 2012. He has been grappling with a range of challenges, from poverty in developing countries to global warming. Kim had the support of Japan, the United States, and China for his re-appointment. The focus is on how he will achieve the goal of eradicating poverty while working with the China-led Asian Infrastructure Investment Bank and other lenders. Kim says the World Bank Group is the greatest instrument for tackling global poverty, with unmatched knowledge and financial tools. He says he looks forward to working with member countries to build a more inclusive world, free of poverty.
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Wells Fargo executives forfeit millions, CEO to forgo salary amid investigation www.theguardian.com

Wells Fargo executives will forfeit millions of dollars in the wake of revelations that the bank’s sales quotas led to the creation of more than 2m unauthorized accounts. The bank’s chief executive John Stumpf will forgo his salary for the coming months as independent directors launch a new investigation into Wells Fargo’s retail banking and sales practices. Last year, Stumpf made about $19.3m. Stumpf will also forfeit unvested equity awards worth about $41m. Carrie Tolstedt, who oversaw the retail banking at Wells Fargo while the unauthorized accounts were opened, was slated to receive as much as $124.6m after retiring this summer, according to Fortune. The bank said on Tuesday that she would not receive an undisclosed severance and would forfeit about $19m in unvested awards. Less than three weeks ago, Wells Fargo announced that it had agreed to pay $185m in penalties after an audit found that its employees opened as many as 1.5m deposit accounts and 565,000 credit card accounts without customers’ consent. The accounts were opened by the bank’s staff in hopes of meeting their monthly sales quota and earning their incentive bonuses. Wells Fargo workers have tried to draw attention to the “unreasonable” quotas before – some even staged a protest in front of the bank’s headquarters last year. When Stumpf testified in front of the US Senate last week, he drew ire from US lawmakers. Many of them called for the bank to recoup pay from Stumpf and Tolstedt and hold them accountable. While the bank insists that the creation of unauthorized accounts was not part of an orchestrated effort, many lawmakers expressed doubt that thousands of employees acted on their own. Stumpf was scheduled to testify in front of the House financial services committee on Thursday. Many expected the hearing to be much of the same, including calls for clawing back the executives’ pay. Wells Fargo pre-empted that by announcing the clawbacks on Tuesday. The board also reserved the right for further clawbacks pending the results of its investigation. “Based on the results of the investigation, the independent members of the board will take such other actions as they collectively deem appropriate, which may include further compensation actions before any additional equity awards vest or bonus decisions are made early next year, clawbacks of compensation already paid out, and other employment-related actions,” Stephen Sanger, lead independent director, said in the statement. The bank also announced that it is ending its practice of sales quotas three months earlier than previously stated. “While we continue to determine the details for 2017 goals and incentive plans for the retail bank, we are taking steps to accelerate the removal of product sales goals effective 1 October 2016, and put greater emphasis on delivering the best customer experience,” the bank said in a statement provided to CNBC. “We are also making adjustments to ensure that as we make changes, we maintain fair and consistent compensation for retail bank team members.” This month, the bank announced that it planned to end its sales goals by January 2017. When Stumpf testified in front of the Senate last week, Senator Elizabeth Warren of Massachusetts told him that he demonstrated “gutless leadership” blaming the unauthorized accounts on the 5,300 former employees. “This is about accountability,” she said. “You should resign, you should give back the money you took while this scam was going on and you should be criminally investigated by both the Department of Justice and the Securities and Exchange Commission. This just isn’t right.” Warren said that Wall Street executive were not held accountable in 2008 “when they crushed the worldwide economy” and are not being held accountable now, either. “The only way that Wall Street will change is if executives face jail time when they preside over massive frauds,” Warren told Stumpf. “Until then it will be business as usual, and at giant banks like Wells Fargo, that seems to mean cheating as many customers, investors and employees as they possibly can.”
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