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’Morgan Stanley’s most mysterious footnote — Part 2
In Part 1, we looked in and around Morgan Stanley’s mysterious little footnote about how the bank had reduced net exposure to Italy from $4.9bn to $1.5bn with a restructuring that settled in the early days of 2012.
Morgan Stanley’s most mysterious footnote — Part 1
(7) On December 22, 2011, the Company executed certain derivative restructuring amendments which settled on January 3, 2012. …
This mysterious little footnote announced to the world that in the fourth quarter,
Recapturing the losses of the crisis
Deferred tax assets are a favourite of FT Alphaville’s. Some banks made such awful losses during the crisis they opted to store the losses on balance sheets for a sunny day when they started making profits again.
Fitch downgrades a slew of investment banks
Fitch follows S&P and downgrades a gaggle of investment banks.
Unlike S&P, however, this isn’t down to a change in methodology. Rather, as our emphasis below suggests, the rating agency argues that the banks aren’t as protected in “periods of exogenous financial stress”
European banks ‘need tons of money’, says GMO
In a note released on Tuesday, GMO, the global asset management firm headed by Jeremy Grantham, writes that ”European banks need tons of money” to correct capital shortfalls. This much, we know.
But the five scenarios used by Richard P.
Sovereign downgrades and the eurozone
As S&P decides whether to downgrade Germany and the five other triple-A members of the eurozone, RBS considers who would be hardest hit by the move other than President Sarkozy and his re-election hopes.
Sweet deals in European bank deleveraging
What links Hershey to the eurozone debt crisis? Well, aside from making a product that cracks under pressure, the confectioner has recently renewed a syndicated lending deal that Nomura’s analysts say augurs further European bank deleveraging.
Dumb investors
From the FT:
Bank stocks are seen as a “dumb” place for investors to put their money, according to the head of part-nationalised Royal Bank of Scotland.
In an often tetchy interrogation by the Treasury select committee on Wednesday,
Indie v sell-side research and a UniCredit spam alert
Turn on your spam filters. UniCredit is on fire:
This email torrent was prompted by the bank’s decision to merge its loss-making western European equity-research unit with new partners Kepler Capital Markets (a French brokerage and independent provider of equity research).
Welcome to the European bank recap jungle
It gets worse here every day, et cetera.
The FT’s Peter Spiegel has a bit of tonight’s draft eurozone statement as it pertains to bank recapitalisation:
There is broad agreement on requiring a significantly higher capital ratio of 9 per cent of the highest quality capital and after accounting for market valuation of sovereign debt exposures,
The history and future of banking, according to Andy Haldane
Andy Haldane’s latest speech is a coherent, logically argued history of modern banking that ends with four intriguing policy ideas. The Bank of England’s Executive Director, Financial Stability, is always worth reading but his Wincott Annual Memorial Lecture,
The pictorial UBS beat
UBS beat profit forecasts with their Q3 results on Tuesday, coming in with a SFr 1.02bn ($1.13bn) of net profit.
In the absence of unauthorised gains to offset them, unauthorised (er) losses from the trading scandal cost the group SFr 1.85bn.
The continuing mystery of US banks’ European exposure
Europe may or may not be saved but Q3 earnings releases by US banks suggest they’re content with their exposure to the continent.
We looked at the methodology behind exposure disclosure in this post.
Morgan Stanley’s Q3 “beats”, with a boost from “fluctuations”
Morgan Stanley beat analyst expectations with third quarter earnings Wednesday morning. FT Alphaville looks under the bonnet, but first, here’s the announcement (with our emphasis and including some choice footnotes ’cause that’s how we roll):
Bank of America results: DOA or DVA? [updated]
Alright, Bank of America, you win. FT Alphaville thought Citi was the worst when it came to being obtrusive about taking gains on the deterioration of their own creditworthiness. Citi’s DVA of $1.9bn was “Liabilities at Fair Value Option”.
Wells Fargo feels the squeeze
Citigroup wasn’t the only US banking giant to report results on Monday.
Wells Fargo, America’s fourth biggest bank by assets and second biggest bank by operating income, also released its quarterly earnings statement.
The not so great European banking recap
Are you confused by the ‘facts’ and figures on the latest bank stress test?
These charts (click to expand) from Morgan Stanley’s Huw Van Steenis should help.
Using reported 2011 core Tier 1 capital,
Taking the stress test to nine (ex-bad stuff)
Just like the good old days. A Pestowire ‘exclusive’ on banking recapitalisations.
From the BBC:
The European Banking Authority is proposing that eurozone banks should hold capital equivalent to between 9% and 10% of their risk-weighted assets,
It’s going to be a miserable third quarter for banks, say banks
US bank reporting season is almost upon us and we’re looking forward to investigating the mysteries surrounding the performance of the bulge bracket since the turn of the year.
To give you a sense of how bad it’s been for the 1 per cent,
The mystery of US banks’ second mortgage exposure
How big a hit should US banks take on their second mortgage portfolio?
A question that’s been asked again and again (and again and again) by this blog and others. Regulators are worried: Bloomberg reported last month that the Fed and the OCC are checking whether banks have put aside enough reserves to cover losses.
Moody’s downgrades 12 UK financial institutions
And you thought it was going to be a quiet Friday?
No such luck. Moody’s has today downgraded 12 UK financial institutions. Here are the details (our emphasis):
London, 07 October 2011 — Moody’s Investors Service has today downgraded the senior debt and deposit ratings of 12 UK financial institutions and confirmed the ratings of 1 institution.
Goldman predicts a fire sale of USD assets by French banks
There were a few cheeky titbits in an otherwise workmanlike Goldman Sachs note published Wednesday on US banks.
First up for a teasing: French banks. As we know, US banks are sitting ducklings in the middle of the European maelstrom.
The end of the beginning?
Have Eurozone policy makers finally got it?
The signs are certainly encouraging, says Citigroup.
… in the last 2 weeks we have moved from not being sure that Europe was coordinated enough and didn’t ‘get’ it &
The mystery of US banks’ European exposure
This might just be the most important piece of paper in US banking right now:
FFIEC 009 is the form US banks send to regulators about their exposure to Europe (sovereigns and corporates) and it provides the basis for many of the estimates of vulnerability.
Le Spleen de Morgan Stanley
All is not well in the kingdom of Stanley. The CDS spreads have blown out and the market is concerned. Very, very concerned. Moody’s Analytics is here to tell us all about why that is.
The first [concern] is the exposure of MS to European institutions and the second is the level of trading revenues in the third quarter.