Politico’s Morning Money examines how the former Morgan Stanley banker and George W. Bush aide became President Trump’s pick to oversee an embattled Fed. Warsh’s connections in Washington and Wall Street may ease his confirmation, but his shift from crisis-era inflation hawk to Trump ally has left many questioning how he would lead the central bank—and whether he can deliver Trump’s desired rate cuts without undermining its credibility.
“Competing on Value, Not Price, in a Tough Margin Environment”
As NIMs compress, community banks need better data, clearer accountability, and more disciplined pricing to stay profitable, according to this article, which says institutions should focus on total relationship value rather than trying to compete on price alone.
“Bessent Offers Deregulatory Vision, but Few Specifics”
Treasury Secretary Scott Bessent told lawmakers the administration wants to ease regulation for small banks but offered few specifics during a contentious House Financial Services Committee hearing. At one point, Ranking Member Maxine Waters, D-CA, told Chair French Hill, R-AK, to “shut him up.” Bessent endorsed tailoring capital and risk standards for small banks, criticized what he called “regulation by reflex,” and said the Fed should remain independent on monetary policy but face greater accountability.
“Top Republican Senator Says Fed’s Powell Didn’t Commit a Crime”
Senate Banking Committee Chair Tim Scott, R-SC, said he does not believe Fed Chair Jerome Powell committed a crime during congressional testimony now under DOJ investigation. Because Scott chaired the hearing in question, his comments could help end a standoff delaying Kevin Warsh’s confirmation. Powell has said the DOJ probe is intended to pressure the Fed to cut rates.
“‘These Players Matter’: BNY Embraces Role on Small Lenders’ AI Journey”
BNY Mellon launched a free training program for up to 1,000 community bank executives focused on AI, cybersecurity, and data analytics. Aimed at banks under $10 billion in assets, the initiative is part of a broader effort to strengthen the financial system.
“Leading a Community Bank Through a CEO Transition”
Clear communication, active listening, and the steady hand of mentors are critical during CEO transitions, this article says. Hear from several new community bank chiefs on the importance of building trust with employees and regulators while avoiding abrupt changes.
“Banco Santander Strikes $12.3 Billion Deal for Webster Financial in U.S. Expansion”
Banco Santander agreed to acquire Webster Financial in a $12.3 billion cash-and-stock deal, expanding its U.S. footprint and making it one of the largest banks in the Northeast. Webster, with more than $80 billion in assets, will become a wholly owned subsidiary of Santander. The deal is expected to close in the second half of the year.
In Other News
AI bots are forming communities on a viral Reddit-style platform, sparking oversight concerns; Anthropic is using a Super Bowl ad to take aim at ChatGPT’s move toward ads; and the WSJ explores the “messy divorce” between the U.S. and China.