Weekly Global News Wrap: US banks collect lower overdraft fees; Citi asked to improve internal oversight

And investment to hedge funds hit a new low, according to Goldman Sachs.

From CNBC:
The three biggest American retail banks collected 25% less overdraft revenue last year as the companies.

JPMorgan Chase, Wells Fargo and Bank of America reported a combined $2.2b in overdraft fees in 2023, roughly $700m less than in the previous year, according to regulatory filings.

Overdraft fees are triggered when a customer attempts to spend more than the balance in their checking accounts. At around $35 per transaction at many banks, the fees have been a lucrative line item for the industry, generating $280b in revenue since 2000, according to the Consumer Financial Protection Bureau.

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From Reuters:
US regulators have asked Citigroup for urgent changes to the way it measures default risk of its trading partners.

The bank’s own auditors have found a plan to improve internal oversight to be lacking, Reuters said.

Late last year, the Federal Reserve reportedly sent Citi three notices directing the bank to address in the coming months how it measures risk of default by counterparties in derivative transactions, a source with direct knowledge of the matter said.

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From Reuters:
Investments to new hedge funds in 2023 fell to new lows, whilst established hedge funds hiked fees to the highest on record, said a client report by Goldman Sachs.

This illustrates a growing bias towards established and bigger hedge funds that average higher returns for their investors, said Goldman Sachs.