JPM insider non-trading case puts banks on notice 3 Apr 2012 Britain’s regulator has fined Ian Hannam for sharing price-sensitive information about a client. The penalty looks harsh since the JPMorgan dealmaker’s slip was accidental and nobody traded on the tip. Even if Hannam wins his appeal, advisers may have to re-think how they work.
EU banks should disclose ECB earnings boost 3 Apr 2012 Some lenders are enjoying a temporary uplift from buying high-yielding sovereign debt financed by the central bank’s cheap three-year loans. Banks are reluctant to spell out the extent of the improvement. But as first quarter results approach, investors should demand clarity.
Goldman follows board stitch-up with smackdown 2 Apr 2012 The Wall Street firm just avoided a push to split the chairman and CEO roles by simply renaming its top director. Now it has given the job to the wrong guy. James Schiro is already on the board, and his record hardly proves he’ll ask tough questions. Goldman isn’t getting it.
Temasek on top in SE Asia bank stake swap 2 Apr 2012 The Singaporean fund will exchange its stake in Indonesia’s Bank Danamon for an enlarged slice of DBS, a bigger lender based in its home state. The price is high and there are integration dangers for DBS. But if all goes well, Temasek will enjoy a windfall of almost $2 billion.
Review: Fictional financiers remain elusive 30 Mar 2012 Despite the crash, recent novels have produced few memorable investment bankers. Roger Yount, the anti-hero of John Lanchester’s “Capital”, might have been an exception. Sadly, his tale is lost in the sprawling novel’s attempt to capture a cross-section of London.
Goldman Sachs now treats shareholders like muppets 28 Mar 2012 The firm criticized for ripping off clients is doing just that to investors. Goldman has long argued that its presiding director fulfils many of the duties of an independent chairman. Renaming him lead director to head off a chairman/CEO split is the underhand trade of the year.
Regulator holds key to unshackling RBS from state 28 Mar 2012 Interest from Middle Eastern funds has raised hopes the UK government might shrink its stake in the bailed-out lender. But any sale is doubtful until RBS has escaped costly state insurance. To do so, it must first persuade the Financial Services Authority it has enough capital.
Gupta’s quiet win is loud warning for prosecutors 28 Mar 2012 Granting the former Goldman director access to government notes may help him parry insider-trading charges, but it also puts teeth in rules for sharing evidence. Recent cases show prosecutors too often hide crucial information. The Gupta ruling should help put an end to that.
Spanish bank take-under reveals real estate mess 27 Mar 2012 Caixabank is buying smaller rival Banca Civica and its dud property loans at a discount to market value. Caixa reaps savings from cutting costs, including its own network, and avoids being pushed into a deal with larger Bankia. Without state support, though, it’s still a risk.
Volcker Rule remedy a decent compromise 26 Mar 2012 A bipartisan group of lawmakers wants to give regulators more time to figure out the complexities of banning prop trading. Their genuinely practical one-page fix is a rare treat from chambers famous for partisan bickering - assuming the senators can get it passed.
How to solve Dublin’s IOU problem 26 Mar 2012 Ireland is trying to restructure the fearfully complex promissory notes it issued to bail out its banks. Ideally, it would like to hang onto 31 billion euros of cheap Eurosystem money for 30 years. While that’s too much to expect, there should be scope for compromise.
Bank bailout views skewer GOP star’s credibility 23 Mar 2012 Paul Ryan’s new budget takes bold steps to shrink U.S. debt, but makes a troubling error. He suggests that Dodd-Frank’s new mechanism to wind down big banks will cost taxpayers and spur bailouts. This misstep casts doubt on his ability to favor practical solutions over politics.
UK’s bubble-prickers seek iron grip on banks 23 Mar 2012 The new Financial Policy Committee wants mega powers to prevent future excess, including controlling capital ratios and reining in insurers and fund managers. It’s clear the FPC will have muscle. The snag is that it has few ideas for solving the current problem: risk aversion.
UBS rolls the dice with Andrea Orcel grab 22 Mar 2012 The Swiss group is preparing to install the Merrill Lynch rainmaker as co-head of investment banking. It’s a sign that crisis- and scandal-scarred UBS can still attract big names. But Orcel’s patchy management track record raises questions about how well he’ll fit in.
Judges’ words can speak as loudly as actions 20 Mar 2012 Leo Strine and Jed Rakoff have become known for their tough and snarky rulings, including recent ones thumping Goldman Sachs and Citigroup. Jurists don’t always have the full force of the law needed to up-end the status quo. But the bully pulpit is proving just as powerful.
Vatican bank struggles to be cleansed of past sins 20 Mar 2012 JPMorgan has closed the Holy See’s account due to a lack of transparency. The Vatican is also straining to be admitted to the list of countries that comply with anti-fraud and money laundering rules. It should either close the bank, or come clean about its shady past.
Wall Street’s bonus model fails legal eagles, too 19 Mar 2012 Dewey & LeBoeuf lured rainmakers with guaranteed payouts, echoing a structure common in banking. Pay cuts for other partners at the New York firm have led to an exodus. Dewey’s struggle to regain equilibrium is a cautionary tale about getting swept up in a culture of stardom.
Profumo can’t start Monte dei Paschi M&A spree yet 19 Mar 2012 The man who built UniCredit with a blitz of deals can’t repeat the trick at MPS, which he is now going to chair – at least until its finances are stabilised. Even then, Profumo will need to face down scepticism over past deals and get any plans past the bank’s core investor.
Goldman Sachs history shows resignation naivete 19 Mar 2012 A week has gone by since Greg Smith quit the firm with a New York Times op-ed. While its resonance has been striking, its revelations, in their historical context, aren’t. Greed has always struggled with duty to clients in finance, even if it ballooned post-IPO at Goldman.
Hedge funds show banks how to recoup loans to Gulf 19 Mar 2012 Bahraini investment house Arcapita has been forced to file for U.S. bankruptcy protection after pressure from non-bank creditors – a first in the region. That won’t end “extend and pretend” debt deals, but it may deliver one of the Gulf’s first effective restructurings.