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Euromoney (November Issue)

2014/ 11/ 08 by jd in Global News

Despite the relative success of recent stress tests, “the financial sector remains at the core of the eurozone’s economic woes. Weak corporates and overleveraged households continue to weigh on bank balance sheets and lenders across the region remain vulnerable to write-downs.” The “flimsy” stress tests failed to “address the underlying problems of bad credit that slow growth and lowflation are compounding…. The euro banking crisis remains.”


Institutional Investor (April 24)

2014/ 04/ 26 by jd in Global News

To strengthen their balance sheets, large banks (including Deutsche Bank, Royal Bank of Scotland, UBS, Morgan Stanley, JPMorgan Chase and Barclays) have been reducing their commodities businesses, mainly through sales to independent trading companies. With these sales “to smaller players, conflicts of interest remain a potential problem” and nobody’s sure whether new problems will accompany this major shift. Given the skinnier balance sheets of the new players, market liquidity could conceivably suffer. In addition, “concerns abound that the underlying problems that have traditionally beset the commodities markets are simply being pushed onto a new and less tightly regulated set of actors.”


Institutional Investor (September 17)

2013/ 09/ 18 by jd in Global News

“As the global recession and financial crisis recede in the rearview mirror, companies have been acting more proactively in using their balance sheets in ways that enhance shareholder value. But we think they can do more…. By mid-2013, U.S. companies were sitting on cash that was equivalent to about 11 percent of their total assets, a three-decade high and earning almost nothing.” Fortunately, there are signs of change. Companies “have become more receptive to using debt to buy back shares, increase dividends and make acquisitions.”


The Economist (November 3)

2012/ 11/ 04 by jd in Global News

Even as profits have tumbled, balance sheets have soared as companies across the globe put more cash aside. “The financial crisis has made firms more skittish about relying on banks or securities markets for funds.” At least in Japan, this “urge to save may be lessening. Japanese firms, with few growth prospects at home, have been making foreign deals. Marc Zenner of JPMorgan Chase notes that in the past 18 months firms that announce acquisitions have been rewarded with higher share prices.”