Posts tagged 'Banks'

Swimming naked in China

David joined the FT in 2011 as a Marjorie Deane fellow. He covered emerging markets, equities and currencies before making the jump over to FT Alphaville in May 2012.

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| Jun 10 12:19 | Comment |

China Everbright Bank placed itself directly in the firing line of terrible puns last week when reports it had defaulted started to circle.

Thankfully, Anne Stevenson-Yang from J Capital read into the news a bit further than most:

The interbank defaults last Thursday provided definitive, if indirect, proof that the cash coming into China is for financial investment and interest arbitrage. It masquerades as a trade surplus but is not. With the tightening of the domestic central bank credit window, Chinese banks are heavily dependent on these inflows for the cash they need to roll over loans. That is why the banks immediately went into distress when regulators decided to clamp down on fraud on the trade account.

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All up in Bloomberg’s broker-dealer business

Tracy Alloway used to be deputy editor of FT Alphaville. Here she learned the details of derivatives, the absurdities of accounting and the various structures of ... erm ... structured finance. She now covers big US banks for the FT paper, including Goldman Sachs and Morgan Stanley. She pops up on FT Alphaville every once in a while.

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| May 15 08:35 | Comment |

The world is becoming intimately acquainted with the technical ins-and-outs of the Bloomberg LP empire.

There is Bloomberg’s bread-and-butter business of selling sophisticated data terminals to thousands of banking, hedge fund and regulatory authorities around the world. There is also the well-respected news wire run by Matt Winkler. Read more

Loopy

David joined the FT in 2011 as a Marjorie Deane fellow. He covered emerging markets, equities and currencies before making the jump over to FT Alphaville in May 2012.

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| May 02 11:56 | Comment |

A telling chart (which you can click to enlarge) from BNP Paribas’ Ricardo Santos and Michelle Lam. As they note — after a break particularly in the second half of 2012, there’s recently been a marked increase in banks’ holdings of sovereign debt… especially in Italy, France, Portugal and Spain. Read more

The great Aussie bank share price bubble

| May 02 00:57 | Comment |

Via UBS:

The Aussie banks are very good companies. They are profitable, resilient, well capitalised, well managed, shareholder focused and have a very strong industry and regulatory structure. However, following the significant leveraging of the Australian & NZ households over the last thirty years they are now low growth and remain heavily exposed to housing, funding markets & unemployment risk. Read more

This brave new world

David joined the FT in 2011 as a Marjorie Deane fellow. He covered emerging markets, equities and currencies before making the jump over to FT Alphaville in May 2012.

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| Apr 05 15:52 | Comment |

Cyprus may not be a template but as Pawel Morski said, the actual template is probably not going to look all that different.

We’ve already written a little bit about this and on Thursday Barclays published a note suggesting the Cyprus mess, plus the incoming common resolution framework, might wipe €15bn annually from the profits of Europe’s biggest banks. The draft of said framework is scheduled to come into play by 2015 with the bail-in tool, which had been delayed until 2018, perhaps being moved forward. We await clarity from European legislators this summer, if the summer ever arrives.

Concerning Barclays’ €15bn figure, it’s made up of a few different, but connected, elements. Read more

If you can’t beat them, just spend

Izabella Kaminska joined FT Alphaville in October 2008. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP's internal magazine.

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| Mar 28 09:30 | Comment |

Gary Jenkins writing in Credit Matters this week gets to the heart of the matter when it comes to what investors should do with their money (our emphasis):

Is nowhere safe? The natural reaction to this is that fi nancing for banks should become more expensive. We are already seeing this reaction in the market to some degree. But what does this mean for a product like Cocos? How does an investor monitor the risk of conversion if the ECB could, on any given day, decide to withdraw liquidity unless the bank were to improve its capital position?

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Getting Cookie Monster to eat carrots

Joseph joined FT Alphaville way back in March 2010. He likes all the politically and legally fiddly bits of finance. He also likes credit, rates, global macro, tail risk, and all that stuff. (You should email him story ideas. He’ll take anything.)

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| Mar 22 15:49 | Comment |

Starring A. European Banker as the Cookie Monster and Mario Draghi as Ernie:

Ernie gets Cookie Monster to eat a carrot Read more

Accounting convergence – lost?

Joseph joined FT Alphaville way back in March 2010. He likes all the politically and legally fiddly bits of finance. He also likes credit, rates, global macro, tail risk, and all that stuff. (You should email him story ideas. He’ll take anything.)

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| Mar 07 16:15 | Comment |

Enjoy! Some 148 pages of accounting-for-loan-losses reading:

It’s the IASB’s latest version of its attempt to make banks recognise “lifetime expected” losses on loans or bonds as soon as there are “significant” signs of a credit going bad, instead of waiting until it’s too late and risking a sudden wave of defaults. Read more

RBS, and “just amazing how libor fixing can make you that much money”

Joseph joined FT Alphaville way back in March 2010. He likes all the politically and legally fiddly bits of finance. He also likes credit, rates, global macro, tail risk, and all that stuff. (You should email him story ideas. He’ll take anything.)

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| Feb 06 15:15 | Comment |

Yeah, so “stupid Libor emails” is now an established sub-genre in banker literature.

Though the funny thing about Wednesday’s RBS revelations is that attempts at manipulation generally, at least at the start, weren’t written down. The whole problem was that people trading rates were sat right next to people in charge of submitting rates for Libor. That’s due to the “Short-Term Markets Desk”, RBS management’s October 2006 bid to “facilitate more communication”. Oops. Read more

Dutch-bottomed bank bondholders

Joseph joined FT Alphaville way back in March 2010. He likes all the politically and legally fiddly bits of finance. He also likes credit, rates, global macro, tail risk, and all that stuff. (You should email him story ideas. He’ll take anything.)

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| Feb 04 17:05 | Comment |

Well, we think “Dutch-bottomed” is probably a better metaphor for what’s happened to SNS Reaal’s subordinated bondholders than Bond Vigilantes’ “Going Dutch”. That just means splitting the bill. Dutch-bottomed is empty, or perhaps fallen through the trap door.

The Netherlands government did an unusual thing when it nationalised SNS, a small and struggling mortgage bank on Friday. It expropriated subordinated bonds of the lender. Here’s the decree. It theoretically suggests the holders still have a claim on the value of the bonds, at some point: Read more

That ring fence will be electrified after all

Kate is FT AV’s Asia Correspondent. She joined FT Alphaville in mid-2011 after carrying out various roles in the FT’s London office since 2005: interactive editor, companies reporter, and founding editor of the FT’s Energy Source blog.

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| Feb 04 10:08 | Comment |

So, it’s happening. The Banking Reform bill to be published today will give the Treasury and the bank regulator the power to break up a bank that doesn’t respect the ringfence between retail banking and the riskier stuff. Read more

Reforming RWAs, some reading

Joseph joined FT Alphaville way back in March 2010. He likes all the politically and legally fiddly bits of finance. He also likes credit, rates, global macro, tail risk, and all that stuff. (You should email him story ideas. He’ll take anything.)

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| Jan 31 12:12 | Comment |

As promised…

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LTRO flowed

David joined the FT in 2011 as a Marjorie Deane fellow. He covered emerging markets, equities and currencies before making the jump over to FT Alphaville in May 2012.

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| Jan 30 15:03 | Comment |

That’s a very small €3.7bn take up by banks participating in the European Central Bank’s three-month Long Term Refinancing Operation on Wednesday. We’d expected more. Read more

Cut and paste – your guide to ‘economic’ vs ‘regulatory’ liquidity

Tracy Alloway used to be deputy editor of FT Alphaville. Here she learned the details of derivatives, the absurdities of accounting and the various structures of ... erm ... structured finance. She now covers big US banks for the FT paper, including Goldman Sachs and Morgan Stanley. She pops up on FT Alphaville every once in a while.

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| Jan 28 21:34 | Comment |

Are you a bank agonising over whether to keep your triple A-rated covered bonds as part of your liquidity buffer or send them to the European Central Bank? Not sure what to do with your AA-rated non-financial euro corporate debt?

Then you need this handy table from BofAML’s structured finance guru, Alexander Batchvarov. Read more

Icesaved?

Joseph joined FT Alphaville way back in March 2010. He likes all the politically and legally fiddly bits of finance. He also likes credit, rates, global macro, tail risk, and all that stuff. (You should email him story ideas. He’ll take anything.)

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| Jan 28 17:05 | Comment |

Whatever it is that Iceland gains from winning this EFTA court case on the Icesave deposits…

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LTRO flow

David joined the FT in 2011 as a Marjorie Deane fellow. He covered emerging markets, equities and currencies before making the jump over to FT Alphaville in May 2012.

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| Jan 25 14:21 | Comment |

From the ECB on Friday:

As announced by the Governing Council on 8 December 2011, counterparties have the option to repay, after one year, any part of the amounts that they were allotted in the longer-term refinancing operations settled on 21 December 2011 and 1 March 2012, on any main refinancing operation settlement day. Accordingly, on 30 January 2013 EUR 137159.10 million will be repaid in the tender 20110149 by 278 counterparties.

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Reforming risk-weights, quotes du jour

Joseph joined FT Alphaville way back in March 2010. He likes all the politically and legally fiddly bits of finance. He also likes credit, rates, global macro, tail risk, and all that stuff. (You should email him story ideas. He’ll take anything.)

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| Jan 25 09:25 | Comment |

They all come from this Stefan Ingves speech given on Thursday — in which the Basel Committee chair addresses “some concerns… that banks are not calculating risk weighted assets” – the denominator in a bank’s regulatory capital ratio – “consistently”.

Basel is about to release results of a probe into banking and trading books… Read more

The great European bank heist reversal

David joined the FT in 2011 as a Marjorie Deane fellow. He covered emerging markets, equities and currencies before making the jump over to FT Alphaville in May 2012.

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| Jan 15 15:49 | Comment |

LTRO repayment chat is speeding up the closer we get to the fateful day at the end of January when Euro-banks might actually start sending back once cheap cash to the central bank. How much will be repaid, by whom and when are the questions that need to be answered.

Thing is, it seems that by at least one measure, the market is mispricing the amount of cash that’ll flow back to the European Central Bank. And maybe ignoring the ECB’s motives in this whole debate. Read more

Euphoria in the banking sector

Paul Murphy is the founding editor of FT Alphaville.

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| Jan 02 10:23 | Comment |

Amidst a general fiscal-fudge-relief-rally on Wednesday, one sector stood out…

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Why negative interest rates are a bad idea, by Capital Economics

Izabella Kaminska joined FT Alphaville in October 2008. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP's internal magazine.

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| Dec 18 2012 16:43 | Comment |

Dear central bank of Santa,

We, the banks, think we have been really good this year. We didn’t pick on retail customers. We didn’t tell on our Libor manipulating friends. We respected our regulator parents. And most importantly we didn’t have a hissy fit that nearly brought down the global monetary system. Read more

European banks: same, same, and eventually different

Lisa joined FT Alphaville in September 2011 after a tour of duty through the guts of the financial industry, having worked as an analyst at a bank and for a financial data company. She's now the Head of New Projects for FT.com.

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| Nov 22 2012 11:59 | Comment |

Nothing like systemic risk to bring the banks together. The crisis at times left little between them. Eventually though, the market will start to differentiate more. As Huw van Steenis and his colleagues at Morgan Stanley put it in a recent note Read more

Euro area bank lending: Halloween edition

David joined the FT in 2011 as a Marjorie Deane fellow. He covered emerging markets, equities and currencies before making the jump over to FT Alphaville in May 2012.

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| Oct 31 2012 16:32 | Comment |

Click through the pic for the full document (it’s not the most fun read):

Now, we don’t want to get carried away here. The report – covering lending in the third quarter and expectations for the fourth – wasn’t pretty, but it’s worth pointing out that there are glints of cautious funding optimism to be found, both within the report and without, particularly where corporates are concerned. Read more

“Misunderstanding Financial Crises”, a Q&A with Gary Gorton

Cardiff writes mostly about US macroeconomic issues, with daily excursions into other topics about which he claim no expertise. Before Alphaville, Cardiff spent a little more than two years as a reporter at Dow Jones Financial News covering investment banking, asset management, and private equity. Along the way he has written freelance pieces on a variety of other topics from behavioural psychology to Muay Thai, the latter also being a personal interest that involves frequently getting kicked in the shins (and torso, and head).

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| Oct 25 2012 17:02 | Comment |

Read enough books and economics papers about the recent US financial crisis, and at some point you might notice something odd.

Most of them are about the factors that made the crisis and subsequent recession so profound and enduring — excess leverage, deregulation, lax lending standards, the rise of securitisation, blindness of the rating agencies, fraudulent bankers — but very few of them are about what actually started the crisis. Read more

Paying back the LTRO early… or not

David joined the FT in 2011 as a Marjorie Deane fellow. He covered emerging markets, equities and currencies before making the jump over to FT Alphaville in May 2012.

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| Oct 24 2012 18:10 | Comment |

Consider this chart from Bank of America Merrill Lynch:

What it shows is pressure building on the front-end of Euribor contracts. Short positions might be stacking up, apparently.

Why? It might be because there is speculation flitting about that European banks will begin to pay back some of their LTRO cash in the near future. Something not everyone thinks is likely to happen. Read more

UK consumers fail to read Funding for Lending memo

Paul Murphy is the founding editor of FT Alphaville.

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| Oct 23 2012 10:29 | Comment |

Figures from the BBA on Tuesday generally confirmed what we already knew: July’s £100bn Funding for Lending scheme, which was supposed to reduce the real cost of borrowing in return for the banks getting even cheaper access to cash, is simply failing to get through.

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Basel III joke in here*

Paul Murphy is the founding editor of FT Alphaville.

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| Oct 11 2012 15:21 | Comment |

Call it can-kicking at the highest European level. Call it inevitable. Both statements are probably true.

Nevertheless, banking stock across Europe were racing higher on Thursday on the back of this: Read more

The EU’s high level experts on banking have spoke

Paul Murphy is the founding editor of FT Alphaville.

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| Oct 02 2012 12:55 | Comment |

Here’s the Liikanen Report. Click to view.

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Sovereign risk-weighting, face-off du jour

Joseph joined FT Alphaville way back in March 2010. He likes all the politically and legally fiddly bits of finance. He also likes credit, rates, global macro, tail risk, and all that stuff. (You should email him story ideas. He’ll take anything.)

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| Oct 01 2012 18:17 | Comment |

Basel catches European bank capital legislation letting big cross-border lenders play a bit too fast and loose with zero risk-weighting of government bonds for its taste, the FT says.

Well, here’s the key para… Read more

Cœuré on collateral scarcity

Joseph joined FT Alphaville way back in March 2010. He likes all the politically and legally fiddly bits of finance. He also likes credit, rates, global macro, tail risk, and all that stuff. (You should email him story ideas. He’ll take anything.)

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| Oct 01 2012 15:10 | Comment |

Fact du jour on collateral accepted at European Central Bank liquidity ops, via Benoît Cœuré, ECB executive board member:

...non-marketable assets and above all, credit claims (i.e. normal bank loans) have become the largest single asset class in our collateral portfolio. Read more

Carry on bank credit

Joseph joined FT Alphaville way back in March 2010. He likes all the politically and legally fiddly bits of finance. He also likes credit, rates, global macro, tail risk, and all that stuff. (You should email him story ideas. He’ll take anything.)

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| Sep 11 2012 11:53 | Comment |

US banks as one of the last big carry opps, really? Chart via Ralph Axel at BofA Merrill Lynch:

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