This is really good stuff from the FT’s Michael Steen, summing up the confusing welter of communications that has bubbled from ECB board and council members since Mario Draghi attempted some light forward guidance at the last ECB press conference: During his press conference on the subject, the ECB chief did his best not to define that extended period but became unstuck when asked if it was six or 12 months, replying: “It is not six months, it is not 12 months, it is an extended period of time.”
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:
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.
The Bank of Italy has provided a robust defence of its regulation of Monte dei Paschi di Siena || Monte Paschi ignored warnings over risk, documents show || RBS is winding down its M&A business || Wider euro ‘Tobin tax’ will net €35bn || Chesapeake’s controversial CEO, Aubrey McClendon, is resigning || Individual investors helping drive US stockmarket surge || Swiss banks lose old taste for gold || Brussels soften line on bank ringfences || Euro zone economic sentiment rises more than expected || Euro carry reversal inflicts global pain || Amazon’s profits fell 45% in Q4 || India’s finance minister sees end to Vodafone dispute || Apple failed to get its $1.05bn damages award against Samsung increased || China anger at EU telecoms demands || Toyota to recall 752,000 Corollas in U.S. for airbag problems || European Cloud Over Ford || Markets roundup || Germany won’t stand in Cyprus’ way, apparently || Backloading the carbon markets || FOMC preview
RBS winds down M&A business || Asian stocks rise || Brussels may soften line on ringfencing || Chesapeake’s McClendon to retire || Bank of Italy defends MPS supervision || Apple fails to get Samsung penalty raised || Italy’s foreign tax crackdown
BoJ adopts 2% inflation target and unlimited asset purchases || House Republicans introduce bill to temporarily extend debt limit || Rules to ease office-to-flat conversions || Jens Weidmann warns of currency wars || Deutsche to face US energy trading fine || European (lack of) writedowns questioned || China says top 10 steel mills to control 60 percent of capacity by 2015 || Rio rethinks Mozambique business || Markets
On Monday night, FT Alphaville had the pleasure of chairing a discussion on “Socially Useful Banking“. The key speaker was none other than Bank of England’s executive director for financial stability, Andy Haldane. His speech was entitled “A leaf being turned“. Since we were there for the evening, and moderating the lively Q&A, it’s been interesting to see what angles the papers have taken on it. Here-under a headline digest:
Romney basically won last night’s debate: Mitt Romney was widely viewed as more successful in the first US presidential debate of this campaign, in which he focused on weak growth and high unemployment. Two of Barack Obama’s top campaign advisers conceded that Romney won on style, even as they said the president won on substance.
Asian stock markets rose despite news of weaker Chinese services growth, stoking speculation the nation will step up measures to stimulate the economy and overshadowing concern about Spain’s reluctance to seek a bailout. (Bloomberg) China’s non-manufacturing industries expanded at the weakest pace since at least March 2011. The services PMI fell to 53.7 from 56.3 in August. (Bloomberg)
NY lawsuit filed against JP Morgan over Bear Stearns MBS: New York Attorney General Eric Schneiderman filed a civil fraud lawsuit against JPMorgan on Monday over mortgage-backed securities packaged and sold by Bear Stearns, which JP Morgan bought in March 2008. The suit seeks unspecified damages and cites $22.5bn of losses were suffered by investors. It is the first action to come out of a working group created by President Barack Obama earlier this year to go after wrongdoing that led to the financial crisis. JP Morgan in a statement it would contest the allegations. Schneiderman’s office said: “We intend to follow up with similar actions against other sponsors and underwriters.” (Financial Times)(Reuters)(Wall Street Journal) EU report will call for bank bonuses to be paid in debt: The Liikanen commission, an independent review set up almost a year ago by EU commissioner Michel Barnier, will on Tuesday recommend reforms for long-term pay incentives as well as advocating ringfencing trading activities to make big banks safer. Some of the panel’s most radical measures have been toned down and Barnier will decide whether any of the proposals will be included in his reforms. (Financial Times)
Glencore softened terms of its offer for Xstrata, saying it would keep Sir John Bond on as chairman of the mining company as part of the revised offer and retaining the same balanced board structure as proposed in February, with equal numbers of non-executive directors from each company’s board. Xstrata, which on Friday said it needed more information to consider Mr Glasenberg’s latest plans, declined to comment on Sunday and Qatar Holding, a key shareholder in Xstrata, is awaiting the board’s response. (Financial Times) Glencore could publish details of its revised offer as early as today. (Reuters) Confidence is growing that a German court may approve the ESM in its ruling on Wednesday, and there are fresh signs that pro-EU parties in the Netherlands have surged ahead in national elections. Meanwhile Olli Rehn, Brussels’ economics commissioner, said the “strict and effective” conditions described in the Outright Monetary Transactions programme would be much the same as the annual Brussels-led recommendations for national governments’ fiscal targets and economic reforms, but with greater detail and timetables for implementation. (Financial Times)
Yeah, yeah. We all know the views on bond-buying from the likes of Draghi, Weidmann and Nowotny. But what about other ECB council members? Ahead of Thursday’s fateful meetings, here’s a rundown, courtesy of Neil Mellor and team at BNY Mellon:
There’s really only one thing on the agenda this Thursday – the ECB’s meeting and subsequent press conference. But few in the City expect President Trichet to surprise the markets with a shock-and-awe style bond-buying blitz. Indeed, analysts are preparing for disappointment, and telling their clients to do the same.