Most Clicked SIFMA Global SmartBrief Stories
1. UK regulators could gain authority to tear up bankers' contracts
SIFMA Global SmartBrief | Nov 16, 2009
The government of UK Prime Minister Gordon Brown will outline plans for reining in bankers' compensation deemed as encouraging excessive risk-taking. The Financial Services Authority would be given "powers if necessary to tear up contracts that would result in payments being made that would cause instability", said Chancellor Alistair Darling. The legislation would not apply to 2009 bonuses, however. Wall Street Journal, The (16 Nov.) Times (London), The (16 Nov.) Bloomberg (15 Nov.)
2. Global policymakers debate contingent-convertible bonds
SIFMA Global SmartBrief | Nov 17, 2009
Bank of England Deputy Governor Paul Tucker voiced support for contingent-capital bonds, known as CoCos, playing a role in recapitalising banks. US Federal Reserve Chairman Ben Bernanke also endorsed the type of hybrid bonds, which convert into equity when the issuer reaches a predetermined level of stress. Critics warned that some bond investors might avoid CoCos because they are not allowed to own equity. Tucker suggested that the bonds could be a beneficial part of contingency plans. Wall Street Journal, The (17 Nov.)
3. Lehman sues Barclays to get back asset "windfall"
SIFMA Global SmartBrief | Nov 17, 2009
The estate of Lehman Brothers and a trustee for the bank's brokerage filed a lawsuit against Barclays in an attempt to claw back as much as $10 billion. The US bank claims the UK bank received billions of dollars in assets after the collapse of Lehman. "The sale transaction was secretly structured from the outset to give Barclays an immediate and enormous windfall profit," lawyers for Lehman said. Financial Times (tiered subscription model) (17 Nov.) Bloomberg (17 Nov.)
4. CESR says review of dark pools to be completed soon
SIFMA Global SmartBrief | Nov 19, 2009
Eddy Wymeersch, chairman of the Committee of European Securities Regulators, said the regulator is working on its review of dark-pool trading venues and might encourage the EU to act quickly on the issue. "Our review will take place before the end of the year," Wymeersch said. "Once we see how the situation is, we will be able to take action and probably ask the European Commission to act before the overall [Markets in Financial Instruments Directive] review [of EU trading rules], but of course that is a decision to be taken by the commission." Reuters (17 Nov.)
5. UK proposes FSA powers to suspend "abusive" short-selling
SIFMA Global SmartBrief | Nov 20, 2009
The UK government's Financial Services Bill includes a measure that would give the Financial Services Authority powers to impose "emergency restrictions" on some forms of short-selling. The market watchdog would also have the authority to require all financial institutions to disclose their short positions. The bill makes up the bulk of UK Prime Minister Gordon Brown's legislative agenda. "Along with governments around the world, we have learned important lessons about the weaknesses of global banking," said Chancellor Alistair Darling. "The bill we are introducing today is central to the government's reform agenda." Bloomberg (19 Nov.)
6. Analysis: CLO market starts to recover
SIFMA Global SmartBrief | Nov 19, 2009
As loans soured during the financial crisis, collateralised loan obligation funds suffered. The CLO market is starting to recover as companies are bought out or refinance loans through bond markets. Cash inflows to CLO funds are picking up, which might lead to more lending for leveraged deals. Wall Street Journal, The (18 Nov.)
7. Bankers, investors say CoCo is only start of new ideas
SIFMA Global SmartBrief | Nov 19, 2009
Bankers and investors said contingent-convertible bonds, also known as CoCos, are likely only the first of several new forms of bank capital as banks seek to shore up balance sheets. "CoCos are not the only structures, and banks are bouncing a lot of different ideas off us," said financial analyst Richard Thomson of Henderson Global Investors' Credit Alpha team. "There is a lot of interest in writedown features." CoCos were designed to meet concerns raised by regulators, resulting in much interest in the hybrid bonds. Financial Times (tiered subscription model) (18 Nov.)
8. Bond-market rally to help Bundesbank as it unloads MBS
SIFMA Global SmartBrief | Nov 16, 2009
Lehman Brothers pledged mortgage-backed securities as collateral for loans from Germany's central bank during the early stages of the credit crisis. The Bundesbank plans to unload those securities and is expected to benefit from a months-long rally in bond markets. Bloomberg (13 Nov.)
9. MUFG, Morgan Stanley delay merger of Japanese brokerage units
SIFMA Global SmartBrief | Nov 18, 2009
Mitsubishi UFJ Financial Group is expected to announce that a merger of the Japanese brokerage divisions of MUFG and Morgan Stanley will be postponed a few months, sources said. The delay is part of a few changes made to the merger plan in response to regulatory concerns. Japan's Financial Services Agency and the Securities and Exchange Commission in the US will have final say on the revised plan. Wall Street Journal, The (17 Nov.)
10. European policymakers, bankers debate best ways forward
SIFMA Global SmartBrief | Nov 18, 2009
While policymakers are trying to figure out how to withdraw from massive stimulus programmes and what kind of regulations to impose on financial institutions, bankers are warning that such efforts could hinder the nascent economic recovery. Bankers are encouraging policymakers to ensure measures are coordinated globally. "There is once again a real danger that the cumulative impact of doctrinaire policy could have some perverse and unintended effects on the economy and for wider society," said Stephen Green, chairman of HSBC. The Basel Committee on Banking Supervision plans to test the effects of tougher capital rules before boosting requirements. Reuters (17 Nov.) Financial Times (tiered subscription model) (17 Nov.)
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Companies in the news
- Alchemy Partners
- BC Partners
- CIT Group
- Caledonia Investments Plc
- Canara Bank
- Fortress Investment Group
- General Atlantic LLC
- General Electric Company
- ICICI Bank
- Intesa Sanpaolo SpA
- KKR & Co.
- Regions Financial Corp.
- Remgro Ltd
- Royal Bank of Canada
- Royal Bank of Scotland