Euromoney (July issue)
“Market share of financial businesses vital to supporting global economic growth is concentrating rapidly into the hands of a small group of the world’s biggest banks.” During the first half of 2013, the top 10 banks commanded 56% of all investment banking fees. This “does not look a particularly welcome development, increasing as it does, the dependence of corporations, governments, large investors and other banks on just a few providers and along with it the exposure of the global financial system to risk of failure at any of these top 10.”
Tags: Banks, Economic growth, Exposure, Fees, Global financial system, Investment banking, Investors, Market share, Risk
Businessweek (June 21)
“China’s credit crunch signals how serious Beijing is about reform.” During June, interbank lending rates soared to 13.91% in China, in what was the worst credit crunch for a decade. “Despite spooking global markets and no doubt causing consternation among Chinese banks and borrowers, the whole episode is a positive sign…. It shows China’s top leaders are still serious about broader economic restructuring and that they mean business when it comes to cleaning up some of the frothiness in the banking sector.”
Euromoney (June Issue)
Portugal successfully raised €3 billion through a 10-year sovereign issue. This “might or might not amount to a return to full market access, but it is certainly a positive development.” Portugal still has a way to go, though, with “progress on its economy and the state of its banks… equally crucial.”
Tags: Banks, Economy, Full market access, Portugal, Sovereign
Euromoney (May Issue)
“The Cyprus solution is inadequate as well as sending the wrong messages on depositors’ risks and free capital flows. Then there’s Slovenia…and Italy….. So the euro debt crisis is not over….. Markets are far too sanguine about the outcomes.”
Tags: Banks, Cyprus, Debt crisis, Depositors, EU, euro, Free capital flows, Markets, Outcomes, Risks
Investment Week (May 14, 2013)
A recent sentiment poll by Bank of America Merrill Lynch shows that worries over the commodity sector are moving to the fore as fears over Europe dissipate. “A quarter of respondents to the Bank of America Merrill Lynch’s monthly poll on manager sentiment said a commodity collapse is the number one tail risk, an increase from 18% in April.” In contrast, respondents identifying “EU sovereigns and banks as the number one tail risk dropped to 29% from 42% in April.”
Tags: Bank of America Merrill Lynch, Banks, Commodities, EU, Fund managers, Sentiment, Sovereigns, Tail risk
Forbes (May 5, 2013)
Urging financial institutions to adopt one-size fits all risk models has can be disastrous. “We have real-life proof of the folly in this kind of forced uniformity: the Basel Accords. For years regulators around the world have been concocting uniform risk assessments to judge bank loans. The results of this exercise have been disastrous. Banks had to hold no reserves against government debt yet hold hefty set-asides for business loans. Greek government bonds were seen as infinitely safer than a loan to, say, IBM. Mortgage-backed securities also got preferred regulatory treatment–and we all know where that led.”
Tags: Banks, Basel Accord, Government debt, Loans, Mortgage-backed securities, Regulators, Reserves, Uniform risk assessment
BBC (March 21)
“Disruption that paralysed the computer networks of broadcasters and banks in South Korea appears to have been caused by a virus…. two South Korean banks, Shinhan Bank and Nonghyup, and three TV stations KBS, MBS and YTN, all reported that their networks had suddenly shut down on Wednesday afternoon.” The cyber-attack originated from an internet address in China, leading many to guess North Korea is ultimately behind the attack. To disguise its identity, the North has been known to route cyber-attacks through China.
Tags: Banks, China, Cyber-attack, North Korea, South Korea, TV stations, Virus
Euromoney (February Issue)
“The European Central bank’s announcement that 278 eurozone banks repaid €137.2 billion of their long-term refinancing operation (LTRO) borrowings on January 30 was seized upon by the market as supporting evidence for a broad range of contradictory positions….Indeed, there was a general sense of confusion after the ECB’s announcement and very little consensus emerged as to what the repayments actually meant….. Attempting to extrapolate much from the figure could turn out to be a fool’s errand.”
Financial Times (February 1)
“Europe enjoyed the first month of 2013 in a mood of relative optimism – a relief after years where one financial near-death experience followed the other. The fissile market pressures on the eurozone are slowly going into reverse, with private money leaving havens and returning to the periphery. Yet clouds continue to clump over the region’s banks. Even if the debt crisis gradually abates, Europe is far from done with cleaning up its banking system.”
Tags: Banks, Debt crisis, Europe, eurozone, Optimism
Institutional Investor (January 31)
“A platform war is intensifying in the global foreign exchange market, with more than half a dozen entrants jumping into the space in the past few months. It’s still too early to know which platforms will emerge as winners, but the proliferation of venues is already sparking declines in already-low trading costs, with banks earning less on each trade, in a situation similar to what’s happened in equity markets over the past decade. One banker estimates that revenue per trade has dropped by about 9 percent over the past year through a narrowing of bid-offer spreads.”