Greek senior bank bonds stuck in purgatory 10 Sep 2015 Senior debt of Greece’s lenders is trading around half face value. The prices show investors know a bank restructuring will mean losses. Gauging the scale of these depends not just on Greece’s erratic economy but their treatment by regulators. This is currently up in the air.
Brazil needs more than S&P downgrade to wake up 10 Sep 2015 The rating agency dropped the $2 trln economy’s investment-grade status, and Moody’s could follow. President Rousseff’s ineptitude, intractability in Congress and Finance Minister Levy’s weakness portend even more trouble. Lawmakers could offer a fix, but that’s unlikely.
Tough talk on jailing bosses is ultra-cheap 10 Sep 2015 U.S. lawmen are touting new rules to nail people not just their employers. It’s a bit late and also glosses over that the failure to prosecute individuals really comes down to the difficulty of making a case. The C-suite won’t be intimidated until regulators walk the walk.
Bank watchdogs tie themselves in knots over TLAC 10 Sep 2015 Financial regulators are throwing a bone to sprawling global banks by watering down plans for what happens if a lender goes bust. Putting the likes of HSBC on an even footing with rivals structured differently is justifiable. But it makes resolving crises that bit harder.
Osborne finds right outlet for political ambition 10 Sep 2015 The UK chancellor and perhaps future leader is proposing European treaty change to protect the UK financial sector. Of late, George Osborne policy pronouncements like a UK minimum wage have been political stunts. Protecting the City combines political appeal with practical necessity.
Jefferies may be canary in shuttered Wall St mine 9 Sep 2015 Unlike the rest of the U.S. securities industry, the firm controlled by $7.7 bln Leucadia isn’t barred from proprietary trading. So its quarterly results could offer some insight into just how much the Volcker Rule helps or hinders the likes of Goldman Sachs in volatile markets.
BofA’s hapless board deserves investor rebellion 8 Sep 2015 Directors last year overrode a 2009 shareholder vote to separate the chairman and CEO roles, giving Brian Moynihan both. Though governance has improved, the blunder implies the board remains too aloof. If BofA loses the coming vote, it’s a mark against directors, not Moynihan.
Blackstone hotel deal may include early checkout 8 Sep 2015 The buyout firm is paying $6 bln for Strategic Hotels, owner of Four Seasons and Ritz-Carlton properties. The 13 pct premium seems measly given the appetite of foreign buyers for luxury lodging. Maybe Blackstone’s rewarding commercial real estate breakup of 2007 would work again.
Mitsui Sumitomo assumes a lot with Amlin swoop 8 Sep 2015 The Japanese insurer is paying 3.5 billion stg for the second-biggest insurer in London’s Lloyd’s market. Paying a big premium for already well-valued overseas assets is becoming a national trend in Japan. Mitsui will need punchy synergies to hit its target’s cost of capital.
Brussels may offer loophole for bank capital hit 7 Sep 2015 New accounting rules on how much lenders must put aside to cover future bad loans are sensible, but risk knocking holes in banks’ precious solvency ratios. The European Commission has a way to stop this happening. For once, red tape may be the banks’ friend.
American Express may face its Microsoft moment 4 Sep 2015 The $75 bln credit-card firm led by Ken Chenault is ValueAct’s latest target. It’s not clear how breaking up or returning capital will remedy Amex’s subpar growth and lagging stock. Going after the long-serving boss, ValueAct’s successful strategy at the software giant, might.
Europe’s fuzzy capital markets union takes shape 4 Sep 2015 The European Commission is mulling a directive to harmonise member states’ various insolvency regimes. If common principles can be nailed down, bankruptcy will get smoother. And the Juncker commission’s goal of better integrated capital markets would have a hope of success.
IMF misses chance to help global policymakers 3 Sep 2015 The lender’s warning on global economic risks lacks what policymakers need: insight into what’s happening to China and why market ructions have been so severe. G20 finance officials heading for Turkey need meatier, more challenging views than the IMF seems prepared to give.
Fosun global ambition clashes with market reality 3 Sep 2015 The Chinese conglomerate’s bid for private bank BHF Kleinwort Benson comes with alluring logic and a reasonable premium. That might not be enough. Weak markets in China, and an apparent belief that Fosun will offer more, are pulling in opposite and unhelpful directions.
Buyout barons like the sound of a blank check 2 Sep 2015 David Bonderman’s TPG and Alec Gores’ eponymous firm are the latest to jump on the shell-company bandwagon. A cutthroat M&A scene and the success enjoyed by the likes of Martin Franklin have amplified the siren call. Not all acquisition nous is necessarily the same, however.
Novo Banco has issues – Chinese owner or not 2 Sep 2015 Insurer Anbang is no longer in line to acquire the bailed-out Portuguese bank. Yet given rival Chinese group Fosun remains in the race, Chineseness is unlikely to be the problem. Any buyer for Novo Banco needs to get comfortable with its uncertain capital and litigation bills.
Poland makes bank investors political playthings 1 Sep 2015 Warsaw could force lenders to cough up $5.9 bln to relieve borrowers with Swiss franc mortgages not obviously in distress. With elections looming, the party ahead in the polls wants to tax banks’ balance sheets. It may be pure politics, but the danger is that foreign money flees.
Markets are a test of central bankers’ backbone 27 Aug 2015 Equities are rallying after a Fed official cast doubt on the need for a September rate rise. China’s slowdown and sliding commodities may warrant circumspection among global central bankers. But market gyrations don’t. Monetary policy inaction should be for the right reasons.
China’s sensible rate cut sends dangerous signals 25 Aug 2015 The central bank has lowered interest rates by a quarter point and reduced the amount lenders must hold in reserve. It helps ease the slowdown and offsets capital outflows. But by responding to two days of stock market turmoil, policymakers run the risk of stoking moral hazard.
Zurich buys protection with 5.6 bln pound RSA bid 25 Aug 2015 The Swiss insurer has made a 550 pence-per-share indicative offer for its UK peer. At that price, it could achieve a 10 pct return with fairly undemanding cost savings. Twitchy markets may help Zurich clinch a deal that both sides’ shareholders can argue is a fair result.