These words from Merkel in reference to the markets forcing the politicians to in effect shore up the markets is exactly the kind of unintended consequence that I expected to happen when I wrote the Great Unwinding posts. Merkel defies pressure on debt crisis | ft.com “Politics cannot and will not simply follow the markets,” Germany’s chancellor said, repeating her refusal to countenance funding indebted nations with a bond guaranteed by all members of the single currency bloc. “The markets want to force us into doing certain things, and that we won’t do,” Ms Merkel said, shrugging off last week’s … Continue reading Undercurrents in western banks today signal a shift back to basics banking

The Globe notes a recent post at Zero Hedge that blows open a little known fact of Canadian bank accounting. Canada’s banks: Next dominos to fall? | Globe and Mail Now wait, say those of you who have been paying attention to Canadian bank disclosure. Canadian banks routinely disclose TCE ratios north of 10 per cent. Well, yes, but it’s a case of apples and oranges. The banks talk about tangible common equity to risk weighted assets, while Mr. Durden (am I the only one who feels strange calling him that?) is looking at TCE to total assets. Risk weighted … Continue reading Canadian Bank equity called into question by Zero Hedge

A useless piece of trivia from the markets. Apple is worth as much as all EU banks | Financial Post Technology company Apple is now worth as much as the 32 biggest euro zone banks. That’s the stark result from a steep fall in the share price of banks including Spain’s Santander, France’s BNP Paribas, Germany’s Deutsche Bank and Italy’s Unicredit, compared to a steady rise in Apple’s valuation, according to Thomson Reuters data. Continue reading Apple is worth as much as all EU banks | Financial Post

Step by step this cynical blogger is becoming a convert.  Raising $10M is a big deal.  It seems the model is to provide a quality front end with a bank and FDIC guarantees behind. I remember back in the 90’s when internet was new and one of the models we conjectured was banks becoming ‘manufacturers’ sitting the in the background offerring banking services wholesale.  Part of that model requires Banks to buy in. BankSimple have absorbed that model it seems and found willing providers.  key will be the financial arrangement between the players.  It is easy to take on the … Continue reading BankSimple raises $10 million and offers hope for banking innovation

This is a must read for anyone interested in banks and banking. The coming world of smaller banks | Frank Partnoy – ft.com How many people does it take to operate a modern bank and how much should such a bank’s shares be worth? With that simple question Frank kicks of the article by reciting the seemingly dramatic reductions in banking staff.  Yet he points out the markets reacted by driving down stock prices of banks.  Then comes the killer point (emphasis mine) Bank analysts cite several reasons for share price declines, including litigation exposure, declining investor and consumer confidence … Continue reading After the 2008 tipping point, banks need genuine breakout strategies, not incremental improvement

About time is all I can say about this.  The country that sticks to miles and mag stripes truly needs to get with the programme and I hope Visa are serious about forcing this through.  MasterCard should be all over this too. Visa cites m-payments as it pushes US to EMV | Finextra Now card giant Visa has set out its programme to drive the adoption of dual-interface chip technology to "help prepare the US payment infrastructure for the arrival of NFC-based mobile payments" as well as improve security and international interoperability. Continue reading Visa plots to enforce chip cards in US

This from June 17th, 2011 based on an IMF report indicating political risk in the US,  seemed to many as an irrelevant comment at the time.  No more, and note the reference to political risk in the S&P report.  All the talk of the $2 trillion mistake is missing the point.  Even after the mistake is adjusted, the fact of American arrogance and political ineptitude between the three branches of government (Congress, Senate, President) adds up to political risk when viewed from outside America. Continue reading America has a political risk issue to resolve

Alex at mybanktracker.com has a review of the current trend to eliminate bank debit rewards, following changes in interchange rules.  He has identified which banks are involved along with the article describing the background. The Future of debit rewards Continue reading MyBankTracker.com Review: The Future of Debit Rewards

This article is a good example of buzzwords getting ahead of common sense, at least as much as we can discern from the articles.  Apologies for picking on Westpac but none to Microsoft or IBM. Westpac to save from its own private cloud AustralianIT Next month, Westpac will begin migrating about 40,000 mailboxes to the single Outlook platform from IBM Lotus Notes and Novell GroupWise used across the group. Full implementation is expected to take between 12 and 15 months. With the private cloud, Microsoft applications will be hosted at Fujitsu’s local data centre and accessed by Westpac staff. So … Continue reading Westpac announcements sound like they are driven by vendor PR

With only a few days left the people who manage money, banks and traders are essentially warning of a September 2008 scenario. Fed under fire over default talks They want to address contingency planning for a run on money market funds that hold Treasury bonds, the impact on capital and liquidity ratios if there are large inflows or outflows of deposits and the potential effect on short-term financing from any problems in the repurchase, or “repo”, market. Continue reading Serious fear enters the markets, only 3 years later – July 28th 2011