Four banks have stolen loads of column inches on Wednesday with news that they are developing “a new form of digital cash that they believe will become an industry standard to clear and settle financial trades over blockchain, the technology underpinning bitcoin”.
In the fanfare, however, lots of common sense has been abandoned.
The big idea here (allegedly) is that banks will use a “utility settlement coin” to bypass the need for costly and inefficient fiat liquidity from the cbank.
The utility settlement coin, based on a solution developed by Clearmatics Technologies, aims to let financial institutions pay for securities, such as bonds and equities, without waiting for traditional money transfers to be completed. Instead they would use digital coins that are directly convertible into cash at central banks, cutting the time and cost of post-trade settlement and clearing.
Roll up. UBS Global Economist Paul Donovan will be on tap to discuss Davos, the alleged Fourth Industrial Revolution, and all things market-related during today’s session of Markets Live.
It’s rather timely, given that the Footsie was off 3 per cent at pixel.
So get your questions ready. You can prepare by reading the UBS white paper here.
Click here at 11am.
New to Markets Live? Read this. Read more
This guest post is from Lutfey Siddiqi, managing director at UBS Investment Bank, and Simon Smiles, chief investment officer for ultra high net worth at UBS Wealth Management. It’s on the back of a UBS white paper for Davos, which you can read here.
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This guest post is from Simon Smiles, chief investment officer for ultra high net worth at UBS Wealth Management, and his strategist colleague Christopher Swann.
The latest transfer season in the UK was another record-breaker for the Premier League, with clubs shelling out £862m on players from other teams. That was over 10 times the annual sum that clubs have committed to the youth Elite Player Performance Plan – which aims to develop homegrown talent. This underinvestment may help explain why the Premier League is forced to import 67 per cent of players from abroad while the English team hasn’t won a World Cup in almost 50 years. Read more
UBS + Away-day in a fancy high-tech facility at a not too secret location due to tweeting oversight = !!!Future shock!!!
We’ve been live at the scene of the new UBS ‘refresh’ on Monday — and it seems what the rebranded Swiss bank wants to discuss is EVERYTHING TO DO WITH THE FUTURE. Read more
Oldham, Lancs, in the case of this correspondent. Read more
This guest post is from Camp Alphaville speaker Themis Themistocleous, who is head of the European Investment Office at UBS Wealth Management
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European bond markets in context for global investors, via a helpful UBS matrix below.
Naked yields along the top, 12 month currency hedged variety for investors in various domiciles underneath.
Thoughts from a glance? Maybe firms worried that few traders remember what high rates look like should just hire Brazilians. Also, Aussies should buy Treasuries. Read more
An expensive business, banking. There’s offices, staff, technology, terminals, compliance…
Actually, maybe it would be wise to spend a bit more on the last one. The FT’s running total of legal fines and settlements paid by banks to US regulators since 2007 now comes to $155bn.
In case you were wondering, over eight years that works out to $53m per day (including weekends, because client service is a 24 hour kind of business, right.) Read more
This guest post is from the co-authors of UBS’s white paper for the WEF meeting 2015 in Davos, which started on Wednesday.
Note that one of the co-authors, UBS Investment Bank’s chief economist Larry Hatheway, will be fielding questions on the energy chapter on Friday at 11:30am during Markets Live. Read more
This guest post is from the co-authors of UBS’s white paper for the WEF meeting in Davos, which started on Wednesday.
Note that one of the co-authors, UBS Global Asset Management’s head of asset allocation & currency Andreas Koester, will be fielding questions on the financial policy chapter on Thursday at 11am during Markets Live. Read more
This guest post is from the co-authors of UBS’s white paper for the WEF meeting in Davos, which gets underway today.
Note that one of the co-authors, UBS Wealth Management’s global chief investment officer Mark Haefele, will be fielding questions on the technology chapter during Wednesday’s Markets Live session at 11am. Read more
Tuesday at 11am.
Paul Donovan, global economist at UBS, will join Bryce and Murphy for our regular Markets Live session. Extracts from his latest note on the Scottish independence vote below… Read more
Canadian inspiration is all the rage. The Guardian reports that poutine has reached British shores, while UBS looks to the country’s history of separatist politics for guidance following a YouGov poll which suggested a surge for the yeas ahead of Scotland’s independence vote on September 18.
In 1995 Quebec voted against independence by a slim margin: 50.58 per cent no to 49.42 yes. A similar result, cautions the bank, could “awaken investors generally dormant sense of risk of Scottish independence”. Read more
This guest post is from Mark Haefele, global chief investment officer at UBS Wealth Management and also chairman of the UBS Global Investment Committee.
Note that Mark will be fielding questions on the topic of poverty during Markets Live at 11am on Tuesday. A UBS white paper on fighting poverty is available here.
Global economic growth, the rise of China, and the fall of communism have all contributed to lifting hundreds of millions out of poverty in the past 25 years. Unfortunately, the ‘easy gains’ have been made. The aforementioned factors are either one-off in nature, or likely to be less supportive in the future. As a result, private individuals, particularly wealthy investors, have a potentially significant role to play in reducing poverty, through a combination of sustainable and impact investing, and philanthropy. Read more
According to a white paper released by UBS for this week’s World Economic Forum in Davos, the world economy remains as unbalanced today as it has been over the past quarter century – with big implications for the global economic recovery.
The authors argue that the adjustment of current account imbalances in the world economy was mostly a function of recession, not shifts in competitiveness. Large current account deficit countries restored external equilibrium at the cost of domestic disequilibrium, so output plummeted and unemployment soared. Read more
According to a white paper released by UBS for this week’s World Economic Forum in Davos, one of the surprising factors ‘reshaping the world’ – the Davos theme this year – is an aggregate absence of austerity among governments globally.
Viewing the global economy as a single unit, the authors see a very different picture to the post-crisis world of austerity. Indeed, the two largest components of global GDP, namely private consumption and fixed investment, both hit multi-year peaks in the first quarter of 2008. The ensuing recession was arguably made less severe by the ongoing rise in government consumption. Read more
That’s a compressed summary of a white paper released by UBS on Wednesday, How trade, technology and finance can help keep the recovery going
The gist is that recent advances in information and communications technology, new innovations in methods of manufacturing, and fresh ways of harnessing and exploiting energy could unleash significant growth benefits for the world economy over the next few decades. Read more
This guest post is from Mark Haefele, Global Head of Investment at UBS Wealth Management, and his colleague Chris Wright, Cross-Asset Strategist.
A key rule in financial markets is that rational investors should not take unnecessary risks. It is strange, then, that some savvy investors still allocate to commodities over a long-term, five-year-plus horizon. The assumption is that commodities diversify portfolios, hedge against inflation, and, in the case of gold, offer a safe store of value. But our research suggests these justifications for long-term bets on commodities are illusory. Read more
Although huge, all conquering, dollar-scooping behemoths of asset management would also seem to work.
Towers Watson and Pensions & Investments have counted up money manager dollars world-wide, once again, and when it comes to size, passive investment products are (almost) the only game in town. Read more
Alexander Friedman, global chief investment officer of UBS AG, and his colleague Kiran Ganesh, cross asset strategist at UBS Wealth Management, share their thoughts on the core issues behind the Washington impasse. For reference, Friedman is American and oversees $1.7 trillion in managed assets…
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Risk is on. The sun’s out (at least in London). Cue two fun slides from Julien Garran of UBS. Click to view.
René Stulz and other academics members of the avowedly non-partisan Squam Lake Group have come out with an update of their well-received 2010 paper on fixing finance, post the crisis. Click below to read their fresh thoughts on banker pay and the knotty problem of properly aligning incentives.
UBS reported a fourth quarter loss of CHF1.2bn — actually CHF1.9bn, when considering Libor fines and other regulatory and legal costs, plus restructuring costs. The loss came in a little lower than the median estimate of analysts surveyed by Bloomberg.
The full monstrous PDF is here, but meanwhile, we note the FT’s Daniel Schäfer scooped an interesting change to the bank’s bonus policy for its 6,500 highest earners: Read more
Soon, it appears, we’ll have another big Libor settlement to write about — this one from RBS. Both the FT and the WSJ are tipping the fines to be in the order of £500m. The FT says it could be more than £400m to the US authorities and about £100m to the FSA; the WSJ doesn’t mention how it might breakdown between the US and UK, but says the settlement “could be completed within the next two weeks”.
Also, yikes! RBS (or specifically, an Asian unit of RBS) might have to plead guilty to some criminal charges if the US prosecutors have their way, says the WSJ.
Shockingly RBS does not like this. But… RBS may not have any choice: Read more
If you wanted to see a group of British MPs not really getting why a group of former UBS execs didn’t get that a Libor scandal was raging under their watch, the only place to be was the Thatcher Room in the House of Commons on Thursday. 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 …
The FSA’s component of the UBS settlement relating to Libor and Euribor was £160m — the largest fine it has ever imposed.
The UK financial regulator made some revealing comments on the Swiss group’s transgressions, which it says “involved a significant number of employees and occurred over a period of years in a number of countries”: Read more
UBS will pay a total of CHF1.4bn ($1.5bn) — or, more than three Barclays — in fines and profit disgorgements related to Libor and Euribor claims. The payments will go to US, UK and Swiss regulators. The bank has also warned of losses totalling about CHF2 to 2.5bn for the fourth quarter, largely due to the settlements and provisioning, although CHF500m related to its restructuring.
Here is the statement: Read more