Securities Technology Monitor (August 6)
High frequency trading “can wreak havoc in the global financial marketplace by amplifying moves on the up- and down-sides.” The “Knightmare on Wall Street” focused attention on this issue when a software glitch at Knight Capital caused almost 40 NYSE-listed stocks to move more than 10% in less than 60 minutes. “The problem with the rising popularity of High-Frequency Trading is that it may be distorting global financial markets significantly, increasingly destabilising those markets and causing the rise of systemic risk.”
High frequency trading “can wreak havoc in the global financial marketplace by amplifying moves on the up- and down-sides.” The “Knightmare on Wall Street” focused attention on this issue when a software glitch at Knight Capital caused almost 40 NYSE-listed stocks to move more than 10% in less than 60 minutes. “The problem with the rising popularity of High-Frequency Trading is that it may be distorting global financial markets significantly, increasingly destabilising those markets and causing the rise of systemic risk.”
Bloomberg (May 7)
Greece’s election “raised the risk that the nation will exit the euro and prompted calls for policies to boost European economic growth.” The likelihood that Greece will quit the euro in the next 12-18 months has risen to 50%-75% according to Citigroup Inc. economists Guillaume Menuet and Juergen Michels.
Greece’s election “raised the risk that the nation will exit the euro and prompted calls for policies to boost European economic growth.” The likelihood that Greece will quit the euro in the next 12-18 months has risen to 50%-75% according to Citigroup Inc. economists Guillaume Menuet and Juergen Michels.
Tags: Ecoonomists, euro, Exit, Greece, Risk
Euromoney (April Issue)
“Asian sovereigns are overtaking advanced western economies in their financial and economic stability.” With the input of 400 economists and specialists, Euromoney conducted its latest country risk survey. The results reveal a “profound shift in global perceptions.” Six Asian countries (Indonesia, Singapore, Hong Kong, Malaysia, Taiwan and Macau) have advanced more than 10 places in the rankings and Singapore is now considered the world’s second-safest sovereign. In contrast, the highest ranking Eurozone country is Finland in fifth place. Hong Kong was rated the tenth safest, trumping Germany which stands at thirteenth.
Financial Times (March 6, 2012)
Last year’s massive quake “awakened” Japan. The nation is now doing a comprehensive “rethink on how to mitigate the effects of disasters.” “Longstanding assumptions” are being overturned to envision even greater seismic risk. The newspaper emphasizes, “It would be wrong to dwell on such matters all the time. Despite its vulnerability to natural disaster, orderly Japan remains one of the world’s safest places to live.”
Last year’s massive quake “awakened” Japan. The nation is now doing a comprehensive “rethink on how to mitigate the effects of disasters.” “Longstanding assumptions” are being overturned to envision even greater seismic risk. The newspaper emphasizes, “It would be wrong to dwell on such matters all the time. Despite its vulnerability to natural disaster, orderly Japan remains one of the world’s safest places to live.”
Tags: Earthquake, Japan, Natural disaster, Risk, Safety
LA Times (October 23)
Lurid Downloader “has been systematically and silently stealing data from carefully targeted government computers in 61 countries.” Advanced persistent threats (APTs), such as Lurid Downloader, are “the latest trend in cyberattacks.” Because the Internet was designed to be open, it is now creating massive risk as so much vital infrastructure and communication depends on it. “As modern society leans ever more heavily on the Internet…, its fragility becomes an ever greater concern.” Unfortunately, the “only answer to the persistent problem of malware may be to rebuild the Internet from scratch.”
Tags: APTs, Cyberattack, Internet, Malware, Risk
Financial Times (October 5)
In a better-late-than-never move, the EU is moving to ensure banks are adequately capitalized. The EU still needs to get to the heart of the matter, “given that the biggest systemic risk to the region’s banks is contagion from sovereign debt.” Eurozone policymaking continues to deny “how serious the problems are until there is no alternative…. By then the cost of action is greater than it might have been with a more timely response.”
Tags: Banks, EU, Risk, Slow response, Sovereign debt
Bloomberg (September 14)
“European banks are losing deposits as savers and money funds spooked by the region’s debt crisis search for havens, a trend that could worsen economic and financial conditions.” Deposits dropped 40% at Irish banks during the past 18 months, but the trend is affecting Greek, German, French, UK and Spanish banks as well. In turn, banks are showing a clear preference for the perceived safety of the Federal Reserve over the European Central Bank. “The cash that foreign banks keep at the U.S. Federal Reserve has more than doubled to $979 billion at the end of August from $443 billion at the end of February.”
“European banks are losing deposits as savers and money funds spooked by the region’s debt crisis search for havens, a trend that could worsen economic and financial conditions.” Deposits dropped 40% at Irish banks during the past 18 months, but the trend is affecting Greek, German, French, UK and Spanish banks as well. In turn, banks are showing a clear preference for the perceived safety of the Federal Reserve over the European Central Bank. “The cash that foreign banks keep at the U.S. Federal Reserve has more than doubled to $979 billion at the end of August from $443 billion at the end of February.”
Los Angeles Times (August 28)
“Politicians who dismiss the risk of climate change like to talk about the uncertainties of the science.” They’d spend less time talking and more time working to halt climate change if they took their cues from professionals who deal with risk. “The real economic costs of mispricing this risk have caught the attention of a good segment of the business community, from commodity traders to insurers. Reinsurers in particular (companies that insure the insurers against catastrophe) see risks on a global scale.”
Tags: Catastrophe, Climate change, Global warming, Politicians, Risk
Financial Times (March 6)
In times of trouble, investors flock to the U.S. dollar. Or did. Despite turbulence in the Mideast, the Financial Times reports, “Hedge funds and forex dealers are betting record amounts against the dollar, reflecting a growing belief that the US currency has lost its haven appeal and that eurozone interest rates will soon rise.”
New York Times (February 5)
Bank of America lost $2.2 billion, but awarded CEO Brian Moynihan $9 million in restricted stock. At Goldman Sachs, Lloyd Blankfein scored even more. In fact, pay and benefits set a new record of $135.5 billion at the top 25 publicly traded Wall Street banks and security firms. The New York Times is not impressed. “More needs to be done to tame bankers’ appetite for high-risk financial strategies that shower them with profit in good times and leave the taxpayers holding the bag when their bets go bad.”
Tags: Bank of America, Goldman Sachs, Pay, Reward, Risk
