It may seem fanciful that Tidjane Thiam and other directors at Prudential believed that a leak of their planned $35bn takeover of AIA three years ago might come from the FSA. But they did. Here’s paragraph 4.6 from the final notice censuring Mr Thiam and fining the Pru $30m…
4.6. The directors of Prudential, including Mr Thiam, met on 31 January 2010 to be briefed on the proposed transaction by Credit Suisse. There was a consensus between the directors of Prudential at this meeting that:
(1) a leak was the key risk to the transaction;
(2) the FSA was one of a number of parties which might be the cause of a leak; and
A theory was gaining ground on Wednesday that, having utterly failed in any way to deal with Britain’s cartwheeling banks ahead of the crisis, the FSA, Britain’s alleged financial regulator, has now set its sights on wrecking the healthy side of Britain’s financial sector.
The Prudential has been fined £30m, and its strikingly successful chief executive, Tidjane Thiam, has been censured, seemingly for worrying that someone at the FSA might possibly leak news of the Pru’s ultimately bungled takeover bid for AIA three years ago. Read more
The competition is on! Sure, UBS is already ahead of Barclays in the FSA fine stakes, but will the inevitable embarrassing communiques beat “done for you, big boy”? Opening gambit from the FSA’s Final Notice to UBS on Wednesday morning (emphasis ours):
For example, on 18 September 2008, a Trader explained to a Broker: “if you keep 6s [i.e. the six month JPY LIBOR rate] unchanged today … I will f[**]king do one humongous deal with you …
Rule-making is a natural response to a financial crisis. There is, of course, also a tendency for the new rules to be more complex than their predecessors. But this evolution has given some regulators pause for thought.
Consider the below a case study, as fuel for debate. It’s an example of when a local regulator managed to fudge the implementation of the edicts from the gnomes of Basel… Read more
Consultation paper from the Financial Services authority, fresh off the printing press on Wednesday morning… Read more
The London Metal Exchange said that the UK’s Financial Services Authority had given approval for its $2.2bn acquisition by Hong Kong Exchanges and Clearing. The transaction is expected to close next week.
But there are still hurdles. First, a court hearing. From the statement by HKEx: Read more
Definitely a turn-around for the books in the Kweku Adoboli case.
From the FSA on Monday, emphasis FT Alphaville’s (and the whole release really is worth a read): Read more
Section 348 of the Financial Services and Markets Act 2000 is what the FSA refers to when one calls to get information on most things that are of interest. Their hands are tied. Even if they are bursting to share information, they can’t. Should it be this way? Read more
“A judgmental structure of supervision that emphasises the big issues has to be matched by proper transparency . . . or it won’t work.” Andrew Bailey, head of prudential regulation at the Financial Services Authority, told that to parliamentarians on Monday.
Too bad there’s seemingly no tradition of transparent supervision in the UK, especially when it comes to banks. Read more
So they’re innocent. Really.
Yes, really. From Bloomberg:
Two girlfriends of former Mizuho International Plc investment banker Thomas Ammann were found not guilty of illegally trading on tips from him about Canon Inc.’s acquisition of OCE NV.
Short-sellers must now notify the market when a net short position on a European stock reaches 0.5 per cent of the issued share capital of the company concerned and again at each 0.1 per cent increment after that. Then the information on UK stocks goes on the FSA’s website (in a particularly hard to use format).
But disclosures so far indicate that the new rules are missing a significant chunk of short-selling activity. Data from Markit suggests that, for example, Lonmin has around 17 per cent in undisclosed short interest. Read more
Hours (well minutes) of fun courtesy of the EU.
It’s the new disclosure regime for short selling, which involves the FSA publishing a list of the most shorted stocks in the UK. Read more
The final notice on this speaks for itself (at length). The FSA has fined Bank of Scotland for screwing up the mortgage records for 250,000 Halifax customers.
More than 20,000 of these were…how do we put this… Read more
FSA chief, Lord Turner, gave a *cough* wide ranging speech last night in the City. From the FT:
Although the FSA chairman never mentioned that he had applied to replace Sir Mervyn King as a potential governor of the Bank of England, the speech highlighted his willingness to take bold and unorthodox action to promote growth.
Lord Turner, Paul Tucker, a deputy governor, and Sir John Vickers are among the leading candidates to take charge of the BoE, which will have expanded powers next year. Paddy Power, the bookmaker, puts even odds on Mr Tucker. Sir John is at 4-1 and Lord Turner 9-2.
Here’s the full thing for those who want it. And some excerpts if you don’t (with our emphasis): Read more
The massive flaws in the method of setting Libor and similar rates are probably familiar to most FTAV readers by now — as are the challenges of coming up with a better replacement.
The review led by new FSA chief Martin Wheatley set out to either “strengthen Libor” or “find an alternative to Libor”. Read more
The Treasury Committee has let loose some letters between its chairman, MP Andrew Tyrie, and the former chief executive of the FSA Hector Sants. The subject matter of the correspondence concerns the original approval by the FSA of Bob Diamond appointment as CEO of Barclays back in 2010.
The freshly released content (see below) provides confirmation that the FSA caveated its approval of Diamond with a warning that it could change its mind if there was an adverse outcome from the Libor investigation. Read more
Kleinmanwire has suddenly pattered back to life!…
One of the former executives who led HBOS to the brink of collapse in 2008 is to be hit with a massive fine and a lifetime ban from the industry, I can exclusively reveal. Read more
Here’s the chief executive elect at the soon-to-be-fangled Financial Conduct Authority, wanting it all back like the old days. Bless.
We all know what it is like to walk into a bank to do something simple, like pay a credit card bill, only for the person behind the counter to ask if you would like to extend your credit, take out more insurance or look at their competitive mortgage rates? To be honest, I only have a credit card to shop online, I have all the insurance I need and the mortgage on my house is fixed. Read more
This is long over due. (Click the image)
Click to enlarge:
It’s the product of all those Select Committee hearings, including appearances by Messrs. Diamond and Tucker. It is only a preliminary report. But it does not have kind words for the authorities who failed to stop the attempted manipulation of Libor before and during the financial crisis. (Barclays management is of course completely coruscated.) As jaded as we’ve all become by the Libor scandal, it’s pretty damning. Read more
You’ll have read a preview of this here, but the plan of action for reforming or replacing the London Inter Bank Offered Rate has now been mapped out by the incoming boss of the Financial Conduct Authority, Martin Wheatley, is now out.
Don’t get too excited. Read more
First, an inventory from Barclays’ Marcus Agius to Committee head Andrew Tyrie in advance of his appearance on Tuesday morning (click through the pics to get the full documents):
The statements of CFTC and Department of Justice in the US, and FSA in the UK, are out concerning Barclays’ $200m, $160m, and £59.5m fines respectively for “attempted manipulation of and false reporting of LIBOR and Euribor Benchmark rates”. The FSA fine is the largest the agency has ever imposed.
From the CFTC statement: Read more
My word, this is pointless. Even by FSA standards. Click to read.
Choose your story.
From the WSJ just after 4pm London time: Read more
From the FSA (who else?). Emphasis ours.
Independent research recommends projection rates are revised downwards Read more
It must have come as quite a shock to the FSA apparatchiks when Ian Hannam turned on them. The accepted procedure following the ritual humiliation, fine and brutal publicity that accompanies a critical report is for the miscreant to issue a more-in-sorrow-than-anger statement, and express a desire to move on. Hannam, though, is made of sterner stuff, and the FSA will now be forced to justify its action in front of an independent tribunal.
It promises to be quite a scrap. The 24-page Decision Notice is not one of the FSA’s finest documents. The logic is thin, relying on arguments like: Read more
Just when we were considering launching the Ian Hannam is Innocent OK? campaign, this crosses our radar…
The statement above comes from reader WEB, in a comment on Tuesday’s post concerning the public hanging of Ian Hannam, the heroic JP Morgan Cazenove banker fined by the FSA for supposedly distributing price sensitive information in two emails.
Scrolling through the related comments here on FT Alphaville and also elsewhere on FT.com, opinions would seem to fall into three camps: there’s the ‘screw him, he’s just a bankster’ brigade; then there’s the view that the FSA is fairly imposing its rulebook; and finally there are those who think the FSA is out of order here and maybe out of control more generally. Read more