Daniel Pinto will step down as JPMorgan's president and COO in June and retire at the end of 2026.
The JPMorgan veteran has long been CEO Jamie Dimon's stand-in in case of an emergency.
Jennifer Piepszak has been promoted to chief operating officer but doesn't want the CEO role.
Daniel Pinto, long the JPMorgan Chase executive who would stand in for Jamie Dimon as CEO in an emergency, will step down as a top lieutenant.
Pinto is being replaced as chief operating officer by Jennifer Piepszak, currently a co-CEO of JPMorgan's commercial and investment bank.
At first glance, the promotion might appear to vault Piepszak into the lead in the race to succeed Dimon. But she has said she doesn't want the CEO job.
"Jenn has made clear her preference for a senior operating role working closely with Jamie and in support of the top leadership team going forward and does not want to be considered for the CEO position at this time," a bank spokesman, Joseph Evangelisti, said.
"She is deeply committed to the future of the firm and our people and wants to help the company in any way she can," Evangelisti added.
Piepszak will be succeeded at the commercial and investment bank by Doug Petno, currently a cohead of global banking, the bank said on Tuesday. Troy Rohrbaugh, the other co-CEO of the commercial and investment bank, was promoted to that post in a reshuffle a year ago.
Such reshuffles are intended to give the bank's top leadership greater familiarity with its businesses. The latest shake-up comes a day before JPMorgan is set to report its fourth-quarter earnings and may reshape the speculation about who will succeed Dimon, who turns 69 in March.
While his target date may have come more into focus, the identity of who the bank's board will want as his successor remains fuzzy.
Piepszak, who has served as chief financial officer and head of the consumer business among other positions at the bank, had been seen as a leading candidate. Rohrbaugh, Petno, and Marianne Lake, who remains the chief executive of consumer and community banking at JPMorgan, are also considered potential candidates. Those executives, and Mary Erdoes, the chief executive of asset and wealth management at the bank, report directly to Dimon.
In a note on Tuesday, Mike Mayo, a banking analyst with Wells Fargo, wrote that "succession has been a bit murky, and this [the management shakeup] doesn't change it much." Dimon, Mayo said, could remain in the top job for several more years, noting that the CEO has 1.5 million of stock options that vest in mid-2026.
The 'hit by the bus' executive
Dimon has described Pinto as his "hit by the bus" executive. When Dimon had emergency heart surgery in 2020, Pinto and Gordon Smith, then the bank's presidents, ran the bank.
The bank said on Tuesday that Pinto would step down as president and chief operating officer in June and retire at the end of 2026.
It also said John Simmons, the head of commercial banking, would succeed Petno and team up with Filippo Gori as coheads of global banking.
Pinto will remain on through the end of 2026 to help with the transition to Piepszak.
In a press release, Dimon described Pinto as "a first-class person who I am proud to call a friend" and who "has made a truly significant impact on our company for more than 40 years," adding, "I'm thrilled he will continue to support and advise us."
Succession on Wall Street is tricky. Egos can be bruised, talent leaves, tensions flare. Morgan Stanley appeared to have achieved a remarkably smooth transition last year, with Ted Pick succeeding James Gorman as CEO and the two runners-up staying on. But succession drama is more common.
As Mayo, the Wells Fargo analyst, said after the 2024 reshuffle at JPMorgan of a post-Dimon bank, "There are still limited spots at the top of JPM, so there is the risk of departures of other JPM execs who want their shot at the top, too."
Morgan Stanley on Wednesday promoted a new class of managing directors to help steer the firm.
See all 173 new MD names here.
The promotions come as Wall Street prepares for a more active environment for dealmaking.
Morgan Stanley this week welcomed a new class of leaders to help shepherd the bank through what's expected to be a more active dealmaking environment. On Friday, they shared the names of their 173 new managing directors, the bank's highest title outside the C-Suite.
The promotions are an annual rite of passage on Wall Street and follow similar elevations at banks like Goldman Sachs and Citigroup, which each promoted new executives to their top ranks in recent weeks.
Morgan Stanley new MD class is larger than last year's, although short of the multiyear highs hit at Goldman and Citi. Some 46% of the new MDs come from the firm's institutional securities group, 13% from investment management, and 9% from wealth management.
The genre has grown to new heights in the past decade, as streaming services and podcasts feed audiences' fascination with the darker side of humanity. This year that has included stalking in "Baby Reindeer" to child exploitation in "Quiet on Set."
Here are the best true crime shows and documentaries so far this year.
1. 'American Nightmare'
Denise Huskins and Aaron Quinn in Netflix's "American Nightmare."
Netflix
Netflix started 2024 strong with "American Nightmare," which tells the story of a bizarre kidnapping.
Denise HuskinsΒ was forcibly takenfrom her boyfriend's house in Vallejo, California in 2015 and reappeared two days later over 400 miles away near her family home in Huntington Beach.
Using interviews with Huskins and her boyfriend, Aaron Quinn, the gripping three-part docuseries explains how the authorities suspected she faked the kidnapping in a move similar to the plot of the 2014 movie, "Gone Girl."
But the case takes an even stranger turn when a police officer stumbles onto a disbarred lawyer, Matthew Muller.
2. 'Lover, Stalker, Killer'
Dave Kroupa in Netflix's "Lover, Stalker, Killer."
Netflix
Mechanic Dave Kroupa had no idea what he was getting into when he started dating Liz Golyar in 2012.
"Lover, Stalker, Killer" explains how the Nebraska couple enjoyed going out and drinking, but things turned deadly when Kroupa called things off and started dating computer programmer, Cari Farver.
Farver went missing just two weeks into their relationship.
The documentary explores how Golyar killed Farver and impersonated her online to evade the authorities.
3. 'Quiet on Set: The Dark Side of Kids TV'
Drake Bell in episode two of the Investigation Discovery docuseries "Quiet on Set: The Dark Side of Kids TV."
Investigation Discovery
"Quiet on Set: The Dark Side of Kids TV" is a shocking four-part Investigation Discovery docuseries about kids TV channel Nickelodeon and the abuse faced by some of its most famous actors.
The show is based on Business Insider's reporting and explores the allegations that producer Dan Schneider created a toxic work environment at Nickelodeon.
It also sees actor and musician Drake Bell talk publicly for the first time about being sexually assaulted by dialogue coach, Brian Peck.
4. 'The Asunta Case'
TristΓ‘n Ulloa as Alfonso Basterra, and Candela PeΓ±a as Rosario Porto Ortega in "The Asunta Case."
Manuel Fernandez-Valdes/Netflix
Spain was shocked when the body of 12-year-old Asunta Basterra Porto was discovered near the city of Santiago de Compostela in 2013.
It was later discovered that her adoptive parents, lawyer Rosario Porto and journalist Alfonso Basterra, murdered her after their divorce.
The tragic death is dramatized in Netflix's "The Asunta Case," which gives audiences an insight into what happened to the couple in the immediate aftermath of the murder.
5. 'Under the Bridge'
Viritka Gupta as Reena Virk in "Under the Bridge."
What makes the show more interesting than a typical crime drama is that it puts Godfrey in the middle of the mystery. The author is played by "Mad Max: Fury Road" star Riley Keough.
Richard Gadd as Donny Dunn and Jessica Gunning as Martha Scott in "Baby Reindeer."
Ed Miller/Netflix
"Baby Reindeer" dramatizes the show's lead actor and writer's experience with stalking, and became a huge talking point after it was released in April 2024.
Richard Gadd plays a fictional version of himself, Donny Dunn, an aspiring comedian who is stalked by a woman called Martha Scott (Jessica Gunning) after he shows her a moment of kindness at the pub where he works.
Gadd also uses the show to also tackle subjects like sexuality and sexual assault. But it became a global phenomenon because audiences tried to track down the "real Martha" online.
In May, 58-year-old Fiona Harvey came forward as the woman the character is based on, but challenged Gadd's depiction of her and has taken legal action against Netflix.
7. 'Dancing for the Devil: The 7M TikTok Cult'
Miranda Derrick at an awards ceremony, and Melanie Lee and Robert Shinn from "Dancing for the Devil: The 7M TikTok Cult."
Kevin Winter/Getty Images)
"Dancing for the Devil: The 7M TikTok Cult" dives into the murky world of TikTok dancers and content creators. It starts by looking at Miranda Derrick, a dancer who cut ties with her family after joining the controversial Shekinah Church in Los Angeles.
From there, the compelling three-part series introduces the audience to Shekinah Church pastor Robert Shinn, and explores allegations of abusive behavior and coercion within the church.
Derrick denied being in a cult in June 2024, and said that she has received death threats because of the Netflix docuseires.
8. 'How to Rob a Bank'
Scott Scurlock used disguises to rob banks in Seattle during the 1990s.
Netflix
Scott Scurlock's life sounds like something out of a Steven Spielberg movie.
In the 1990s, he lived in a huge tree house on his own property and started robbing banks in the Seattle area using makeup and prosthetics to disguise himself.
He even earned himself the nickname "The Hollywood Bandit," because of his techniques.
Scurlock's free-spirited life is the focus of Netflix's "How to Rob a Bank," and features surprisingly honest interviews with his fellow bank robbers and friends.
9. 'Perfect Wife: The Disappearance of Sherri Papini'
Sherri Papini after her arraignment in Sacramento, California.
As the title suggests, it revolves around Papini β who went missing after she went for a run in Redding, California, in November 2016. She was found three weeks later in Yolo County, California, 150 miles from home.
The docuseries explains how it took authorities six years to arrest her for faking the kidnapping, while also looking at the ramifications the hoax had on her family.
10. 'The Man with 1000 Kids'
Jonathan Jacob Meijer has fathered over 550 children.
Netflix
Audiences learn the jaw-dropping story of prolific Dutch sperm donor, Jonathan Jacob Meijer, in "The Man with 1000 Kids."
Meijer does not appear in the three-part docuseries, but five families who used his sperm to conceive share how they discovered the truth about how many children he has and the subsequent dangers.
Meijer has not been convicted of a crime, but the show bears the hallmarks of the true crime genre.
Meijer confirmed he has over 550 children worldwide, and was banned from donating sperm to new families in 2023.
11. "I Am a Killer"
Gary Black in handcuffs, as seen in "I Am a Killer."
Netflix
While many true crime shows on this list focus on the victims, "I Am a Killer" revolves around perpetrators.
Each episode features interviews with a convicted killers in the United States, as they explain the reasons for their crime, their mindset at the time, and how they feel about their actions.
The fifth season arrived on Netflix in October, and features several complex, heartbreaking cases βΒ including that of Ashley Morrison, who was convicted as an accomplice when her boyfriend murdered his grandmother in 2014.
12. "Until I Kill You"
Shaun Evans as John Sweeney and Anna Maxwell Martin as Delia Balmer in "Until I Kill You."
ITV
In November, British network ITV released "Until I Kill You," which dramatizes the life of Delia Balmer (Anna Maxwell Martin), a nurse who survived two brutal attacks by her ex-boyfriend, John Sweeney (Shaun Evans).
The authorities later learned that Sweeney was a serial killer, known as the "Scalp Hunter."
The intense four-part drama charts their relationship and how Sweeney went on the run for several years before he was caught. It also looks at the way the legal system treated Balmer, and the trauma she endured when testifying against Sweeney in court.
13. "The Kings of Tupelo"
A photo of Paul Kevin Curtis dressed as Elvis, as seen in "The Kings of Tupelo."
Netflix
"The Kings of Tupelo" is another Netflix docuseries featuring a case that almost seems too wild to be true. It revolves around Paul Kevin Curtis, an Elvis impersonator who claims he discovered a fridge full of body parts when he was working as a janitor in a Mississippi hospital.
He claimed that the fridge was part of an illegal organ-harvesting operation, and was trying to publicize his theory when he started feuding with a local Taekwondo instructor, James Everett Dutschke.
The three-part docuseries explains how and why Dutschke went on to frame Curtis for attempting to assassinate Barack Obama with ricin in 2013.
Africaβs tech ecosystem just got a boost of attention, with South Africaβs TymeBank and Nigeriaβs Moniepoint both raising funds in recent weeks at valuations of over $1 billion and joining the coveted unicorn pantheon. But those valuations donβt just reflect investor confidence. They signal the success theyβve had in taking disruptive fintech models originally developed [β¦]
From left: Goldman Sachs leaders Asahi Pompey, John Waldron, and Padi Raphael
Courtesy of Goldman Sachs
10 Goldman Sachs partners shared the books, speeches, and plays that inspired them this year.
President John Waldron recommended a book about Dwight Eisenhower that taught him about leadership.
See what 9 other Goldman execs said made them better leaders, industry experts, and humans in 2024.
Goldman Sachs' top brass are revered as some of the sharpest minds on Wall Street β but staying on top of your game takes work.
As 2024 comes to a close, Business Insider asked 10 senior officials of the powerhouse global investment bank β a leader in M&A dealmaking and advice β to share at least one thing they read, watched, or listened to that made them smarter and better at their jobs over the last year.
One Goldman partner recommended a play that helped her think about the long-term impact of her actions. Another partner touted a lecture by a famous philosopher on the importance of organizational trust that can be streamed from Spotify.
As Carey Halio, Goldman's global treasurer, put it, learning is an "endless" pursuit for leaders of the bank, which ranked No. 1 in M&A volumes last year, according to deal tracker LSEG.
"The more you can expand your knowledge base, the better you will be at your core function, the more you will be able to connect the dots and the more effective you will be as a leader," Halio told BI.
Here's what top Goldman executives like President John Waldron, Vice Chair Rob Kaplan, and M&A cohead Stephan Feldgoise shared as their top recommendations from 2024. The responses all come from Goldman partners, the bank's highest rank outside the C-suite. They are in the partners' own words, edited only for length and clarity, and are organized alphabetically by last name.
Jared Cohen
Jared Cohen
Courtesy of Goldman Sachs
Title: President of Global Affairs and cohead of the Goldman Sachs Global Institute
Recommendation: "The Guns of August" by Barbara Tuchman and "A Peace to End All Peace" by David Fromkin
Why: Earlier in my career, I found that you couldn't truly understand World War I without reading these books. Now, they help me make sense of the world we're living in. Tuchman offers a sobering reminder of how quickly things can fall apart. Many leaders took peace in Europe for granted in 1914, as they did in 2014 and even 2022, with devastating results. Fromkin is especially worth reading this year after the fall of the brutal Assad regime in Syria. That country's borders emerged in large part as a legacy World War I.
"A Peace to End All Peace" details the history behind the headlines, and it remains a key text for anyone trying to understand one of the world's most challenging but amazing regions.
Stephan Feldgoise
Stephan Feldgoise
Courtesy of Goldman Sachs
Title: Cohead of Global M&A
Recommendation: "The Confident Mind" by Dr. Nate Zinsser
Why: Dr. Zinsser teaches performance psychology at West Point, working with members of the military who need to perform and excel in high-stress situations.
I found the concepts around preparation and mental positivity to be useful for me personally but also highly valuable in mentoring and developing the next generation of Goldman Sachs leaders as they move into roles where they face performance challenges in high-stress environments.
Most valuable were the very specific and learnable techniques that can be taught to next-generation leaders to build confidence and improve performance.
Gizelle George-Joseph
Gizelle George-Joseph
Courtesy of Gizelle George-Joseph
Title: COO of Global Investment Research
Recommendation: "The Promise of Leadership," readings curated by the Aspen Institute's Finance Leaders Fellowship
Why: A selection of readings curated by the Aspen Institute's Finance Leaders Fellowship as part of the final week-long intensive seminar had the most significant impact on my leadership this year.
There were many aspects of the readings and the seminar that resonated, including a deep discussion on happiness and what makes for a good life: health, wealth, knowledge, friendship, good moral character β all of it? There was also a heart-wrenching reminder of both the courage and the depravity that can exist in the world through stories of survivors of the 1994 Rwandan Genocide, as told by New Yorker writer Paul Gourevitch in the book "We Wish to Inform You That Tomorrow We Will be Killed With Our Families."
From the readings, which included works by Frederick Douglas, Wendell Barry, and Mary Oliver, I took away multiple concepts that I continue to contemplate both as a leader and a citizen of the world and these have guided many of my endeavors and decisions this year. My takeaways included the importance of taking action to create change in big and small ways and enjoying the journey of life itself.
Carey Halio
Carey Halio
Courtesy of Goldman Sachs
Title: Global Treasurer
Recommendation: Speeches by the Federal Reserve Vice Chair Philip Jefferson
Why: This fall, I really enjoyed two speeches by Vice Chair Philip Jefferson from the Federal Reserve on the history of the discount window since it was initially created in 1913, and how it has provided liquidity to the US banking system and broader economy in different environments.
Despite being someone who has been a student of the banking industry for over 25 years, I learned new points that help me think about our approach to the discount window today. It was a good reminder to not only constantly seek out information but to look at history as a tool for understanding the path in front of you.
I am a firm believer that you can always learn more about your industry and your area of expertise β it is truly endless. The more you can expand your knowledge base, the better you will be at your core function, the more you will be able to connect the dots, and the more effective you will be as a leader. While this example is unique to my work, I think the theme applies more universally.
Why: I have always been interested in learning about how leaders operate under highly ambiguous and stressful conditions.Whether it is Woodward, William Manchester, or David Halberstam, authors who explore leadership actions in difficult situations that changed the course of history can provide compelling lessons on decision-making under pressure.
Making one decision versus another, having even a slight misunderstanding, or making a seemingly minor miscalculation can cause mistakes that may look innocuous at the time but can have a lasting impact.
Ericka Leslie
Ericka Leslie
Courtesy of Goldman Sachs
Title: COO of Global Banking & Markets
Recommendation: "Trust the Universe," a lecture by Alan Watts
Why: Throughout my career, I have found the philosopher Alan Watts to be particularly inspiring as I think about how to lead different organizations and functions. I regularly revisit his famous lecture "Trust the Universe" on Spotify and recommend it to my colleagues each year. He argues that most people fail to trust the organization they are in and try to control it, which eventually leads to failure.
If you trust the system, as long as you believe in it, then your ability to get the most out of other people to scale and grow your business is greatly enhanced. Through trust and delegated authority, businesses can grow, and organizations can scale. This idea is borrowed from the way the human body operates, and he presents it as a more natural way to create meaningful impact in an organization.
These lessons are both timeless and universal and something I try to integrate into my work every day.
Asahi Pompey
Asahi Pompey
Courtesy of Goldman Sachs
Title: Global Head of Corporate Engagement and Chair of the Urban Investment Group at Goldman Sachs
Recommendation: "Good Bones," a show by the playwright James Ijames
Why: I saw "Good Bones" at the Public Theater β not once, but twice β because it was that compelling. The play explores the complexities of urban renewal projects, asking essential questions like: Who belongs in a neighborhood, and who benefits from its evolution?
The work my team and I lead is centered on creating durable, lasting economic progress, with over $20 billion deployed in community development projects like affordable housing. "Good Bones" was a welcome reminder that as investors, we should never lose sight of the history and the voice of a community β to build long-term trust, and ultimately, to deliver sustainable impact.
When it comes to running a team and leading an organization, the same ideas are at play. Building and managing relationships with honesty and empathy, especially during times of change, creates a foundation of collective resilience, which is essential for the long-term success of an organization.
Padi Raphael
Padi Raphael
Courtesy of Goldman Sachs
Title: Global head of Third Party Wealth Management in Goldman Sachs Asset Management
Recommendation: "The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution" by Gregory Zuckerman
Why: One book I read this year that stands out to me is "The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution" by Gregory Zuckerman,a compelling biography of a titan of the hedge fund industry. Jim's story underscores the value of being the very best at what you do by finding a niche in which your skills and perspective can uniquely position you to win.
Producing consistent alpha in investing can be a notoriously difficult undertaking, and the book narrates a masterclass in resilience, painting a picture of Jim's extraordinary successes following early hardships in launching his career.
Two themes that resonated with me as a leader were perseverance in the face of challenges and a lifelong love of learning. In his own immortal words: "work with the smartest people you can, hopefully smarter than you...be persistent, don't give up easily. Be guided by beauty...". The book is a highly engaging read, and I devoured it in one sitting!
John Waldron
John Waldron
Courtesy of Goldman Sachs
Title: President & COO
Recommendation: "Eisenhower: The White House Years" by Jim Newton
Why: I spend a lot of time thinking about risk and how to steer our organization through today's geopolitical crosscurrents, so I went looking for inspiration and found it in Jim Newton's book, "Eisenhower: The White House Years."
Although Newton covers the entirety of Eisenhower's life, he focuses on Ike's two terms as president, which are largely remembered as eight torpid years of peace and prosperity, though, as Newton points out, there was nothing ho-hum about them. Eisenhower inherited not only a hot war on the Korean peninsula, but also a Cold War with the Soviet Union, whose tensions erupted in Iran, Vietnam, Guatemala, Taiwan, Hungary, the Suez Canal, Lebanon, Cuba, the Congo.
It is a sign of Eisenhower's success that those perilous years are now remembered as the days of "Leave It to Beaver," and yet he was still human. He wasn't immediately sympathetic to the cause of civil rights, though when push came to shove during the Little Rock crisis of 1957, he did send in the National Guard to enforce court-ordered desegregation. He also advocated for and oversaw the establishment of the Interstate Highway System, which laid the foundation for years of robust economic growth.
He was a man who wasn't afraid to compromise and who always took the long view. Not a bad example for other leaders to follow.
Tucker York
Tucker York
Courtesy of Goldman Sachs
Title: Global Head of Wealth Management
Recommendation: "Leadership by the Good Book" by David L. Steward
Why: Each year, I keep a list of the books I've read, who recommended them to me, and any takeaways or lessons that I took from the reading. One that stood out this year was "Leadership by the Good Book" by David L. Steward. David gave me the book during his visit to Goldman Sachs this fall as he was the keynote speaker at our inaugural Garland Summit.
While the book suggests biblical lessons appropriate for the business world, the wisdom is non-denominational. David and his coauthor, Brandon Mann, delve into the themes of servant leadership, loving what you do, investing in your people, risking your reputation for what's right, growing through external challenges, and celebrating milestones on the journey. I saw clear parallels to our work in serving clients, risk management, and mentoring our people.
Regardless of one's religious affiliation, the applied learnings are relevant for the business world and the guidance applies to my work at Goldman Sachs.
Russian President Vladimir Putin had called on the country's central bank to make a "balanced" decision about its key interest rate.
Getty Images
Russian interest rates on deposits and loans have risen faster than its central bank's key rate.
A central-bank official said lending might have slowed too quickly in the battle to lower inflation.
Russia's central bank has kept its interest rate at 21% to avoid excessive cooling in its economy.
Russia's central bank has been hiking rates consistently in the second half of this year in an attempt to cool high inflation β but it may be running ahead of the curve.
Bank lending has slowed, but there's a risk that it's "faster than necessary" in the fight to bring down inflation to Russia's target rate, a central-bank official told Interfax on Tuesday.
Andrey Gangan, the director of the Central Bank of Russia's Monetary Policy Department, told the news agency that bank interest rates on deposits and loans were rising faster than the central bank's benchmark rate, slowing lending activity.
The development prompted the central bank to keep its benchmark interest rate at 21% on Friday. Analysts polled by Reuters had expected Russia's central bank to hike its key rate to 23%.
"Throughout December, we received increasing confirmation of tighter monetary conditions, culminating in Friday's decision," Gangan said.
Citing official data, Interfax reported that corporate bank lending grew 0.8% in November, down from 2.3% in October.
Lenders are planning to expand their loan portfolios at a lower level next year, Gangan said.
Putin called for a 'balanced' decision on interest rates
Gangan's comments followed speculation that Russia's central bank had been under pressure from President Vladimir Putin and the business community to hold back on rate hikes.
A day before the central bank's meeting, Putin called for aΒ "balanced" decisionΒ about the interest rate.
Russia's top central banker, Elvira Nabiullina, said at a press conference following Friday's interest-rate announcement that she was worried about "excessive cooling" in the country's overheated economy.
Despite the slowdown in bank lending that prompted Russia's central bank to keep rates steady, inflation remains high, reflecting challenges in the country's sanctions-hit economy.
Russia's inflation rate hovered at about 8% in the year to November, compared with the target rate of about 4%, according to government figures.
Gangan told Interfax that full-year inflation was expected to be about 9.6% to 9.8%. Price raises are expected to peak in April 2025 before falling.
"The current price growth we are observing is the result of factors that have accumulated over most of this year," he said.
But the central bank still needs to keep rates steady this time so that the slowdown in bank lending β which leads to economic cooling β would not be "faster than necessary for bringing inflation back to the target," Gangan said.
A Wired investigation found that Google Maps can be near impossible to use in the West Bank, especially since the start of the war. Users told the publication that the navigation app would direct them into walls, fail to account for time-consuming checkpoints, or steer them onto restricted roads leading to Israeli settlements, which can [β¦]
Elvira Nabiullina, Russia's top central banker, expressed that concern on Friday when she kept the key interest rate unchanged. Analysts polled by Reuters had expected her to hike rates to 23%.
"Our politics is aimed at prevention of extreme scenarios, which means that we cannot let the economy overheat further," Nabiullina said at a press conference following the rates decision, according to TASS state news agency.
"It is necessary to make sure that overheating subsides. That said, it is necessary to avoid excessive cooling, which is why we keep a close eye on this," she said.
Nabiullina said the central bank kept the interest rate steady as monetary conditions have "tightened even more than was implied by the key rate increase" in October, when the bank raised the rate from 19% to 21%. Russia started the year with its benchmark interest rate at 16%.
"Consequently, lending growth notably slowed down in November," she said. "We will need some time to assess how steady this deceleration in lending is and how the economy is adjusting to the new conditions."
Russian business leaders complain about high interest rates
Nabiullina's comments came as Russia's inflation hovered around 8% in the year to November, compared to the target rate of about 4%. Staples, like the price of butter and potatoes, have shot up this year. But the central bank's three straight rate hikes since June may be working, the top central banker signaled.
"Tough monetary conditions have evolved in the economy, which are to provide for inflation slowdown in coming quarters," she said, per TASS.
Russian business leaders have been complaining about the central bank's high interest rates, which they say are stifling business activities.
Sergei Chemezov, the CEO of the defense conglomerate Rostec, said in October that record-high interest rates were "eating up" the profit from the company's orders.
"If we continue to work like this, then most of our enterprises will go bankrupt," Chemezov said.
Economic cracks in Russia
Even Russian President Vladimir Putin on Thursday acknowledged that his country's economy is not in a good place β and he blamed the central bank and federal government.
The Russian leader said that the central bank could have used instruments other than interest rates to cool the economy and that the federal government could have worked with economic stakeholders to improve supply.
"There are some issues here, namely inflation, a certain overheating of the economy, and the government and the central bank are already tasked with bringing the tempo down," Putin said during his marathon annual press conference.
Price rises had been an "unpleasant and bad" outcome, he said.
Given the sweeping sanctions against Russia's economy, Nabiullina faces a challenging job to keep Russia's seemingly resilient economy going.
Economic cracks are emerging as the Kremlin focuses on shoring up its defense industry for its war in Ukraine β but at the expense of other sectors, Alexandra Prokopenko, a fellow at the Carnegie Russia Eurasia Center fellow wrote on Friday.
Prokopenko, a former Russian central bank official, wrote that growth momentum could stall next year, with social and fiscal challenges developing into crises around 2026.
Citi rates its 200,000 employees on a forced curve that assesses peers from best to worst.
These rankings influence who gets promoted and who loses their bonus β or worse.
Managing directors told BI how the process works and why it can pit employees against each other.
Citigroup welcomed 344 new managing directors earlier this month, marking its biggest class in years. Behind the scenes, the promotion process can be political and fraught, pitting employees against each other, four current and former managing directors told Business Insider.
Citi evaluates employees on a forced curve, requiring managers to rank them from best to worst using a four-level scale with a certain percentage in each bucket. This system means there's a finite number of top ratings, so employees could exceed all the requirements of their role and still receive a middling grade, said the employees, who spoke on the condition of anonymity.
"We are a company filled with hardworking, achievement-oriented colleagues and we embrace meritocracy," a Citi spokesperson told BI in a written statement. "Our process aims to ensure that colleagues across Citi are held to consistent standards and are assessed by those who have the most direct knowledge of their contributions."
Over the years, the percentage ranges for each bracket have shifted slightly. A managing director said this year each business line could assign top ratings of 1 ("exemplary") and 2 ("exceeds expectations") to 5% to 10% and 15% to 30% of staff, respectively. The lion's share of employees β 50% to 65% β are labeled as "valued contributors." The remaining 3% to 7% who receive a 4 rating ("needs improvement") may face consequences such as being put on a performance improvement plan or losing bonus eligibility.
"It creates an air of distrust inside of cultures and a lot of anxiety for employees that are high performers but may not be recognized for the work they do," John Frehse, a senior managing director at the management consultancy Ankura, said about the ranking practice.
Citi CEO Jane Fraser.
Patrick T. Fallon/Getty Images
The same morning the new class of managing directors was announced, Citi held a virtual town hall for employees. During the Q&A session, human resources addressed an employee's written question that noted the forced distribution system could be unfair to small, high-performing teams. Sara Wechter, Citi's head of human resources, replied that there was no forced bell curve.
A senior Citi executive familiar with the process told BI that Citi's curve is not forced as it uses brackets rather than fixed percentages.
"We have guidelines associated with ratings, which is different from a forced curve," he said.
That reasoning is of little comfort to employees BI spoke to who assign those ratings.
"They are playing with words," said a managing director in the wealth division. "We were mandated to strictly follow the prescribed curve."
This season's annual reviews, which began last week, play a key role in bonus allocations and promotions, including to managing director.
They come at a tense time for Citi's workforce. As part of CEO Jane Fraser's mission to turn around the bank, Citi has laid off 7,000 employees and divested from several businesses. The overhaul isn't over, with the bank planning to cut 20,000 jobs from its workforce of more than 200,000 employees by 2026. Amid these changes, the managing director said there's more anxiety about the review process and uncertainty about bonuses.
Here's how Citi's forced curve works
Grading on a forced curve is not unique to Citi. The practice, otherwise known as stack ranking, was popularized in the 1980s when General Electric's former CEO Jack Welch used it to cut bottom performers. However, this "rank and yank" tactic has fallen out of fashion with many major companies such as Microsoft and Amazon. Most banks engage in some form of stack ranking but the details differ, such as how strictly they adhere to a curve or the grading criteria they use.Morgan Stanley uses a five-point scale. Goldman Sachs has changed its system several times and, beginning in 2020, it's used a three-level system.
"Good companies try to distinguish between the higher and lower performers and do that in terms of how people get raises, what their total compensation would be," said Anthony Nyberg, a professor of management at the Darla Moore School of Business at the University of South Carolina.
Citi employees receive two main ratings with each one graded on a curve, two ex-managing directors said. The two criteria are the "what," which measures an employee's results, such as revenue metrics, and the "how," which evaluates their approach and leadership abilities. This means employees get a combination score such as 1-2.
While it is not a hard and fast rule, Citi employees are usually expected to earn top ratings for two to three consecutive years to receive a promotion, so the review process puts aspiring directors and managing directors under enormous pressure, three of the managing directors told BI.
Direct managers submit their ratings for review before having a so-called "calibration" meeting with their fellow managers, the top manager of their business unit, and an HR representative, the two former executives said. At these meetings, direct managers review an employee's scores and make a case for why the employee deserves a coveted 1 or 2.
After these calibration meetings, the top manager makes the final call on rankings. The outcome often disappoints managers and their reports, who may have never worked directly with the decision-maker, the managing directors said.
The senior executive said that small teams of three or four employees can secure exemptions to the curve. As for large teams with high performers, he said there might be exceptions on a year-to-year basis but he wasn't aware of any ever happening.
MDs said the process pits employees against each other
The evaluation process was described as contentious and stressful by the current and former managing directors, all of whom were responsible for rating employees. The calibration meetings were especially heated, with managers butting heads over which employees received the limited high ratings.
Given the number of top rankings is fixed, managers were typically unwilling to budge on the 1s and 2s they were allotted, even if another manager argued they had more high performers. "No one was like, 'You can take mine,'" said one of the ex-managing directors, who left Citi this year. "We fought."
The managers took issue with other aspects of the grading process. By implementing a curve on the team level, employees were sometimes compared to others with vastly disparate roles or responsibilities. Two of the ex-managing directors described some of the grading criteria as nebulous. For instance, they said, for employees with non-revenue-generating roles, the "what" score is effectively up to the manager's discretion.
Frehse told BI that the biggest flaw with stacked ranking is that performance reviews are inherently subjective.
"Stack ranking is inaccurate from the start," he said. "You're either only looking at the quantitative side, forgetting about the other side, or you're looking at both. And we know that the qualitative side is flawed and subjective."
Frehse said that leaves room for employees to believe favoritism is at work. Three of the managing directors told BI that they believed internal politics played a role in how employees were ranked and which managers received top ratings for their direct reports.
"When you use such a system, it tells you you can't trust different managers to be good managers," said one of the former managing directors.
The senior executive said that the many calibration meetings he attended were productive.
"It's just a way to get together, get out of the silos, and make sure that there's fairness and perspective that goes beyond your own team," he said.
While he maintained that he had not seen hostile calibration meetings, he said that some conversations could get heated.
"This is a very human thing when you have finite anything, and obviously we have finite compensation," he said. "Of course, people are aware of that, but I don't think it's a flaw in the design. I think that's just part of being human."
At its best, stacked ranking should reduce anxiety among employees, Nyberg said.
"People get very upset when things appear to be arbitrary, and the ranking system should actually reduce some of that as long as people can believe that you're doing those rankings in some sort of objective way," he said.
However, it's hard for employees to trust the system if they lose trust in their employers, which often happens after layoffs, Nyberg said.
"It's that contract between the organization and the employees starts to feel really violated that way, and then that permeates everything about it," he said, "then you wouldn't believe anything they say."
Tyme Group, a South African fintech, has secured $250 million in a Series D round, pushing its valuation to $1.5 billion. The funding was led by Nu Holdings, which owns Latin Americaβs most valuable fintech NuBank, investing $150 million for a 10% stake. M&G Catalyst Fund invested $50 million, while existing shareholders provided the remaining [β¦]
Some believe Klarnaβs planned IPO in 2025 could set the stage for other fintech startups to go public. But with the tech IPO market still sluggish, one of the candidates hotly tipped to follow suit has instead just announced a fundraise, and its CEO says going public is βnot a priority.β Zopa, the U.K. neobank [β¦]
Russian President Vladimir Putin said there was no reason to panic about the ruble's slide.
REUTERS/Yves Herman
Russian President Vladimir Putin said the ruble's plunge to two-year lows was no cause for panic.
The Russian currency hit its lowest level against the dollar since March 2022 this week.
Analysts say Russia is under pressure from inflation, military spending, and falling oil prices.
Russians shouldn't stress about the ruble tumbling to two-year lows, Vladimir Putin said Thursday. Analysts told Business Insider there was plenty of cause for concern.
The Russian leader told reporters that the "situation is under control" and that "there are absolutely no grounds for panic," according to a Google translation of a report from the RIA Novosti news agency.
Putin attributed the ruble's fluctuations "not only to inflation but also to budget payments and oil prices," along with many seasonal factors.
The Russian currency traded at 114 to the dollar on Wednesday, its weakest level since March 2022, shortly after the Ukraine invasion began. It was about 84 in early August, meaning the currency has depreciated by 36% in under four months. A greenback was worth about 108 rubles on Friday.
Russia's central bank stepped in to shore up the floundering ruble on Wednesday. It suspended purchases of foreign currency on the domestic market for the rest of this year to reduce volatility.
A Wednesday headline in the state newspaper Rossiyskaya Gazeta read, "Panic attack for Russia's currency market." The Kommersant newspaper warned readers to "buckle up your rubles."
The ruble's latest plunge follows the US sanctioning Gazprombank, one of Russia's largest lenders. The restrictions limit the bank's ability to access global financial markets and handle energy payments.
Russia also fired a hypersonic missile into Ukraine last week after its opponent launched missiles at targets inside Russia for the first time. The escalation has raised concerns of further economic disruption.
A weakening ruble benefits Russian exporters by making their goods more competitive in global markets. But it threatens to accelerate inflation by raising the cost of imports, leaving sellers little choice but to increase their prices. Stubborn inflation has already spurred Russia's central bank to raise the main interest rate to 21%, the highest level since 2003.
The Russian economy has suffered from Western sanctions imposed since Putin's invasion of Ukraine, with energy revenue tanking by almost a quarter last year. Other countries, such as India, have snapped up Russian oil instead, tempering the impact of price caps and other penalties.
Mounting pressure on Russia
Robin Brooks, a senior fellow focused on the global economy and development at the Brookings Institution, posted on X that the ruble's collapse shows how vulnerable Russia is to sanctions.
He also said the European Union's reluctance to impose certain penalties might have staved off economic disaster in Russia.
The collapse of Russia's Ruble (black) is a reminder how badly the EU failed on Russia. It follows the recent US sanctioning of Gazprombank, which the EU opposed for a long time. Russia could have been sent into deep financial crisis 2 years ago. The EU didn't let that happen... pic.twitter.com/XbOwqiABRd
George Pavel at the trading platform Naga.com told BI the ruble's dive had been driven by rising inflation and a widening budget deficit fueled by heavy military spending.
"Russia's economic path looks unsustainable barring major changes," he said, ticking off concerns such as slowing growth, stubborn inflation, a tight labor market, and the massive cost of the Ukraine war.
Brent crude is trading at just over $70 a barrel, and sliding oil prices pose an existential threat to Russia, said Kathleen Brooks, research director at XTB.
"Russian income is shrinking at the same time as defense spending is surging as the war with Ukraine enters a more intense phase," Brooks said. "While President Trump may go some way to ending the Russia-Ukraine war, his policy on energy and plans to get the US pumping even more oil could weigh on the oil price further in 2025, which is bad news for Russia."
Revolut, the London-based fintech unicorn, shared a few items on the companyβs 2025 roadmap at a corporate event in London on Friday. One of its main focuses for next year will be the introduction of an AI-enabled assistant to help its 50 million customers navigate the financial app, manage their money, and customize the software. [β¦]
Ten years after pitching onstage at TechCrunch Disrupt in London, fintech N26 has reported its first ever quarterly (pretax) profit. The challenger bank with millions of customers across Europe generated a net operating income of β¬2.8 million during the third quarter of 2024 (or $2.9 million at current exchange rates). This is an important milestone [β¦]
