Bank of America is now in the category “beleaguered“. Bank of America has reshuffled its top ranks, ousting Sallie Krawcheck from its wealth management division in an effort to streamline the beleaguered financial group. Continue reading Bank of America is now in the category “beleaguered“
Probably prescient choice of words. Deutsche Bank’s chief executive has said he may have to consider cutting costs in a stark warning Banks also needed to ask themselves more questions about the usefulness of many of their services for the real economy. Continue reading Deutsche Bank’s chief executive has said he may have to consider cutting costs in a stark warning
A remarkable statistic from a small bank in Nebraska. Banking in a Time of Over-Regulation | WSJ Consider a conversation I had recently with a banker in Nebraska. For the first time, he said, his bank now devotes more work hours to compliance than to lending. Specifically, he has 1.2 employees on compliance for every one employee focused on lending and bringing in business. Continue reading 1.2 employees on compliance for every one employee focused on lending and bringing in business | Nebraska banker
With one speech Lagarde, the new head of the IMF makes it clear that she believes the state of economies and banks is running severe risks that are not being accepted by politicians both in Europe and US. This follows the similar but softer theme from Bernanke. Lagarde calls for urgent action on banks European banks need “urgent recapitalisation” to stop the spread of the eurozone’s sovereign and financial crisis; the US must act to stop a downward spiral in house prices; and both need credible long-term fiscal policies that allow spending to continue to support growth in the short … Continue reading Lagarde (IMF) calls for action on Banks
Much has been written on the Global Financial Crisis (GFC) and the focus has leant heavily on re-regulation, and higher bank capital. However there remains a nagging sense that nothing really has changed and that it could happen again. This piece from Wray at Levy is a refreshing look at some practical aspects of the GFC that resonate more clearly as potential foundational causes and that remain in place, and are not dealt with by regulation, at least not directly. The first is financial leverage amongst banks. Lessons we should have learned from the Global Financial Crisis : Wray – … Continue reading Some fresh thinking points to bank practices as root cause of the Global Financial Crisis – Wray, Levy Institute
I am watching “’Inside Job’ tonight. Its a documentary on the financial crisis narrated by Matt Damon. The thing that is fascinating me is the dates. Many of the senior people interviewed including bankers and government are noting 2009 as the time they saw a problem. I searched my own blog, and the first indications of a problem were are least two years earlier. All I do is read the press. I am not involved directly in investment banking, but am directly involved in retail financial services. Yet this blog had indications of the eventual problem as early as 2007, … Continue reading Where were the financial media in 2007 ?
There is a lot of downsizing going in with banks. My speculation is that this will broaden into a more sweeping breakup of universal banks. As a prelude, I will start a scorecard of employee shifts amongst the large banks. Here is the first installment. Continue reading Banks employee reduction assessment – 1
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
Bankwatch 