100 posts
No Guilt at Citibank
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In the days leading up to Labor Day 2012, Citigroup announced that the bank would pay $590 million to settle a class-action lawsuit by stockholders who contended that the bank’s management as well as some directors had misled the stockholders about...
Should Banks be Ethical, Sustainable and Boring?
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“Ensuring that banks are boring may prove to be a key element of a new business model for the banking sector, enabling the sector to re-establish its ethical framework and focus financing on sustainability.” (Source: Forbes) Good article on the f...
A European Banking Union: Is it possible?
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It was one of the fundamental topics of the last two summits in Brussels in an effort to provide a more direct and efficient solution to the recapitlization of banking institutions of overdebted states. But is this a realistic solution for Eurozone i...
Events Overtake Finance Ministers
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The agenda for today's meeting of EU finance ministers looked out of date before they started.
The shortcomings of a Eurosceptic editorial policy
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On 13th June 2012 the Daily Express made a gamble that the EU would be more unpopular with its readership than the United Kingdom’s banking sector, when the newspaper published an article by Macer Hall on its website entitled: “NOW EU WANTS TO GR...
Honeyball’s Weekly Round-Up
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Hardly anyone can have missed the banking scandal story which dominated headlines for most of last week. In the Mail on Sunday this weekend Ed Miliband offered his vision for the future of big banking. This morning he is due … Continue reading...
Organising bank supervision and resolution in Europe
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Authors: Guntram B. WolffThe Euro Summit has decided to create common supervision and allow for direct capital injections into banks by the European Stability Mechanism (ESM). This is an important step towards breaking the negative feed-back loop bet...
Basic bank account, one (small) step forward
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Earlier this week, the European Parliament adopted a resolution urging the commission to legislate on universal access to a basic payment account for the 10% of EU citizens who still do not have one. In particular, the baisc account should be - less...
The negative carry universe
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This is a follow-up to our post on “base money confusion“, which incorporates some of the ideas we’ve raised in our “beyond scarcity” series.Let’s...
Kicking like a sleep twitch?
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Johan De Rycker Wednesday, 04 July 2012 Italy having done the heavy lifting versus Germany, obviously Spain won. I'm not even sure whether you really should take football as a simile here. Monti did get somewhe...
‘I ain’t dead’ — US bank holding companies
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Click for Goldman’s ‘living will ‘ for regulators, listing how it would try to resolve by selling parts of its business under bankruptcy:Other bank holding...
Cajas or Landesbanken?
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Click through the pic to the full IMF report on country x to find out. (p. 17)Related link:Eurozone off on journey to central control – FT...
The base money confusion
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FT Alphaville had an interesting email exchange with Peter Stella this past week, snippets of which we would like to share (with Stella’s permission).Stella is currently...
A note on the COFER data
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If there was ever an expression of the fight facing the Bank of Japan in a risk-off world if it wishes to keep the yen down, then the IMF’s latest round of Currency Composition...
Europe’s Banking Union: Possible Next Steps on a Bumpy Path
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Authors: Nicolas VéronIn their summit statement of June 29, the heads of state and government of the euro zone issued a declaration widely interpreted by investors as the founding act of a European banking union, about which European policymak...
Belgian Lender Complicates Slovenia’s Finances
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Slovenia's finance ministry said Monday it will persist in attempts to persuade Belgian bank KBC Group NV to provide its troubled local unit with fresh funding as the government of the former communist country faces growing pressure to prop up its ca...
ESM for Spain ? Irish & Belgian banks could get their bailout!
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Dear reader,just after the last big summit of June 28th & 29th which gave European leaders and investors a big relief, the author here found two small articles which indicate that the ESM could or should be used to help out Irish & Belgian ba...
The Way Out?
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European leaders have agreed on a new plan, which will allow the bailout funds (ESM and EFSF) to inject capital directly into troubled banks, conditional upon the establishment of a new EU banking supervision authority. The markets are pleased, for t...
Can Banks Be Trusted Without Strong Regulations?
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If ever there was a demonstration that “light-touch” regulation of financial firms has not been a great success, this week has been it. Over the years, we have heard huge amounts from the banking sector about how they are competent to reg...
On Banking Unions – Concepts, their Status, Proposals & Examples
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The point of this post is to summarise existing information about banking unions. This is a very vague term that incorporates several concepts. Therefore clarifying this seems quite timely, in light of ongoing discussions. This is briefly described i...
The end of impunity for bankers? How Spain’s indignados are using crowdfunding to bring them to justice
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Following the collapse of the bank he was running until earlier this year, Rodrigo Rato probably thought he would be able to slip into a quiet, if tarnished retirement. A former managing director of the IMF and minister of the economy during Spain...
From voxeu.org: Banking union instead of Eurobonds – disentangling sovereign and banking crises
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If you missed this piece on voxeu.org, by Beck, Gros and Schoenmaker, well, it's worth reading!A couple of paragraphs for giving you a taste:Matching supervision and resolution frameworks to the geographic perimeter of larger cross-border banks has b...
European Banking Union
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A paper from Bruegel on what a European banking union should look like. Since it appears that we're going to have one, it's good to have a blueprint.
Poland to Keep Safe Distance from Euro’s Banking Union
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Poland rushed head over heels to sign up for the euro zone's new set of fiscal rules last year out of fear it would be left out of Europe's more integrated core. But the latest proposal for fixing the euro, a banking union for the bloc, seems too rep...
Banks must learn to reward the good risks | Mariana Mazzucato
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The finance world works against the manufacturing and innovation that we need to rebuild our economiesAfter many years obsessing over the financial sector, our politicians are finally talking about rebalancing the economy, towards "real" areas like m...
The Moody’s bank downgrades
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New York, June 21, 2012 — Moody’s Investors Service today repositioned the ratings of 15 banks and securities firms with global capital markets operations. The long-term...
“Hypothetical, illustrative example of the orderly liquidation of JPMorgan Chase”
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The FT’s Tom Braithwaite has the goods:In March, Gregory Baer, deputy general counsel, presented a plan to policymakers and bankers to show the results of a hypothetical $50bn loss....
Banking Regulator: Congress Sides with Banks
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According to Gary Gensler, head of the Commodity Futures Trading Commission, Congress stands with the big banks in the struggle to shield Americans from the risks and excesses of Wall Street. He pointed in particular to a proposal from the U.S. House...
A permanent European mechanism for bank restructuring
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The recent news about Spain negotiations on bank restructuring seem encouraging. From my point of view the outcome of today talks signals that there is room to start separating the function of restructuring troubled banking system from the other func...
With No Cat In The Hat To Be Found, European Financials Turn World Banks Lower … And The See Saw Destruciton Of Fiat Wealth Commences As Bonds Fall On As Stocks Rally
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Financial Market report for Friday June 8, 2012; this is the tenth week of entry into the Second Great Depression, The bonfire of the the world banks continued today, .with a slow burn as European Financials, EUFN, traded lower, (yet up 7.5% for th...
European banking union isn’t the solution to the immediate crisis facing the eurozone
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In City AM today we lay out our thoughts on the latest plan to save the eurozone - a 'banking union'. Although the plan has some merit and may be needed in the long term it just doesn't look suitable for solving the short term crisis facing the euroz...
"A Banking Union – Europe’s TARP?" by George Irvin
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In October 2008 President G. W. Bush saved the US banking system by pumping $700bn into it — the ‘Troubled Assets Relief Program’ (TARP). It looks as though Angela Merkel and the Eurozone (EZ) may be about to do the same. Why? While Germany...
EU-wide bank deposit scheme: neither politically feasible nor credible
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With the risk of a bank run in the EZ rising, there has been talk amongst EU policymakers of creating a European-wide bank deposit guarantee scheme. Over the past week, members of the European Commission and ECB president Mario Draghi have all spoken...
Is An EU Banking Union Coming Soon?
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Financial Market Report for May 31, 2012 Share value of Banco Santander, STD, and the National Bank of Greece, NBG, fell sharply lower this month. Reuters reports Money flies out of Spain. Marketwatch reports Bankia shares sink 28% after bailout plan...
Crédit Agricole Threatened by Greek Collapse
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Crédit Agricole, which purchased the Greek bank Emporiki in 2006, has suffered huge losses over the past two years. Stockholders have lost a great deal of money and are angry at management.
Simplified cross-border money transfers thanks to SEPA
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Yesterday, the European Parliament adopted in the first reading a new Regulation establishing technical requirements for credit transfers and direct debits in euros and amending Regulation (EC) No 924/2009 (position of the EP may be found here, the f...
French Banking Risk
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NYU Stern School of Business ranks banks for systemic risk. Of the ten banks in the world with the greatest systemic risk, three are French: BNP Paribas, SocGen, and Crédit Agricole.TOP 10SRISK%MESLVGBNP Paribas3.710.2948.79Mitsubishi UFJ Financial...
How banks get away with inventing profits | Gordon Kerr
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Abetted by a sloppy bailout structure, bankers now produce financial statements that would make Bernie Madoff blushBoth sides of the political divide are in agreement that bailing out the UK's failed banks in 2008 (and Northern Rock in 2007) was the...
Banking Intermediation, FRB & Bank Runs
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Having described the tools available to the ECB (and these can be generalized to other CBs), I would like to briefly consider the functioning of the banking sector. In this post I will consider the very basic concepts of banking … Continue read...
THE WORST VERY DECENT COUNTRY IN THE WORLD: A LOLGREECE CHRISTMAS CAROL
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UPDATE: A Greek version of this post was published on 5 Jan 2012 by protagon.grIn my months of relative absence I’ve been reading this blog over and over again, looking for things I ought to have done better or things I used to do well but no longe...
David Cameron has left the City more, not less, vulnerable to EU law | Philip Whyte
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Cameron may have feared Sarkozy and Merkel taming the City, but the UK is now powerless to thwart new legislationThere are many puzzles about the British government's tactics at last week's EU summit. One is why it chose to identify the City of Londo...
Collateral crunch, commodity financing edition
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Look at any financial market long enough and it starts to resemble the repo market.Conventional sales and buybacks. Islamic finance. Covered bonds. Commodity contango or backwardation trades....
Corporate bonds to the rescue?
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Back in September, the FT reported an interesting estimate by JP Morgan.Twenty-eight European banks would have faced a total liquidity shortfall of €493bn at the end of 2010,...
Why I was wrong, by Dick Bove
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Rochedale’s Dick Bove has pondered why he’s been wrong on the banks — spurred on, he writes, by a Bloomberg survey (which we couldn’t find) showing analysts’...
European banks: Gone ECBing
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Morgan Stanley is not making recommendations about which European banks to invest in. They are just telling you which ones are even worse than other ones, as they go through the...
Women Given a Poor Deal by the Banks
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Evidence has come to light today that women are being discriminated against by banks. The report, entitled ‘Women and Banks: Are Female Customers Facing Discrimination?’, by Noreena Hertz, looks at several cases where banks have discrim...
Restructuring, loans to Greece cost Dexia $8.7B
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BRUSSELS — Dexia, the Franco-Belgian lender that had to be bailed out last month, said Wednesday the firesale of its Belgian retail business and losses on Greek government bonds cost it almost euro6.32 billion ($8.74 billion) in the third quarter.
Do It Yourself Bank Stress Test
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Don't trust the authorities? Try your own stress test. (h/t pg)...
Those who profited on the road to financial crisis can compensate now. Get giving | Timothy Garton Ash
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Charity is no substitute for systemic reform, but it can help a lot in the meantime. And bankers have a moral debt to payBetween the steps of St Paul's Cathedral and the G20 meeting in Cannes, I have this message to bankers: give some of it back. By...
Banks and States
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Nicolas Véron argues that European banks must sever their ties with individual states and be placed under a transnational European Banking Authority with "supervisory and resolution authority." In other words, the EU should regulate banks, insure de...
Are Europe’s banks in crisis?
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Slowly, painfully slowly, a plan seems to be coming together to save the Eurozone. Wolfgang Münchau, writing in The Financial Times, says he has never seen European leaders looking so scared. And they have good reason to be scared; Robert Peston, &...
Bank One: Adding to Systemic Risk
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How soon we forget. How soon the financial crisis in September 2008 was relegated or even forgotten. Exactly three years later, the New York Times reported that Republicans have been repeatedly invoking the Dodd-Frank Act’s 848-page length and rule...
Interactive Debt Map
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A fun toy to see just how bad shape your bank is in. The politicians are saying everything is fine; the IMF disagrees.
Eurozone blues
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Who is going to be the Herostratus of the eurozone? Many are in the running if we try to follow events.In the column Public debt in the Eurozone, Japan, and the US, professor Charles Wyplosz presented a report about the ease of accumulating excessive...
Hungarian Minister Says Banks Should Share Burdens
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Hungary's government will ensure banks accept their share of burdens and risks during a difficult time for the country, Development Minister Tamas Fellegi said.
