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Reuters blog archive
from Breakingviews:
Wells Fargo boss takes turn on soapbox
By Jeffrey Goldfarb
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
John Stumpf may be easing his way onto the soapbox. The Wells Fargo chief executive runs the biggest U.S. bank by market value, at $210 billion, but has kept a lower profile than many of his peers. Lately, though, he has been critiquing regulation more, tiptoeing into a role filled until recently by JPMorgan boss Jamie Dimon.
Wells Fargo, with its Midwestern roots and San Francisco headquarters where Old West stagecoaches are displayed, deliberately distances itself from the image of the slick East Coast banker. “I’m not one of you New York guys with your fancy products,” Chairman Dick Kovacevich said at a 2008 gathering of bank bosses as a massive bailout took shape, according to the book “Too Big To Fail.”
Even after acquiring Wachovia and its investment bank, Stumpf has carried on the tradition of his predecessor, maintaining a healthy separation – at least publicly – from policy debates the other side of the country. It’s evident in his yearly letter to shareholders, a forum commonly used by corporate chieftains to express their viewpoints. In JPMorgan’s 2011 annual report, for example, Dimon devoted eight of his 38 pages to global regulation. Stumpf barely mentioned the subject in a missive that was only eight pages total.
from Felix Salmon:
Why dedecimalization is a bad idea
Dan Primack is excited about a new bill which would give small-cap companies the option to have their stocks be quoted at 5-cent or 10-cent increments rather than the standard one-cent gap. He explains:
Small-cap stocks are trapped in a cycle of arrested development. They are small, so they are ignored by analysts and market-makers. And because they are ignored by analysts and market-makers, they remain small.
from Unstructured Finance:
Wall Street’s trading businesses turn to survival of the least dead
Darwin theorized that peacocks' colorful plumage was a sign of their evolutionary strength.
Wall Street has always been known as a cutthroat kind of place, but lately it seems big investment banks are just mulling around, hoping their competitors die first.
from Breakingviews:
Barnier broadside leaves EU looking soft on banks
By Dominic Elliott
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
The European Union’s top financial regulator seems out of touch on banking reform. His peers want banks to keep more capital, but Michel Barnier says the United States should give European banks a break.
from Chrystia Freeland:
Banker steps into the role of superhero
In other ages, we have called on shamans or saints in times of crisis when the usual remedies have not worked.
In the stagnant world economy today, we have designated central bankers as our superheroes, and we are relying on their magical monetary powers to restart global growth.
from Breakingviews:
Mafia and Cyprus may release IPO animal spirits
By Robert Cyran
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
The mafia and Cyprus could trigger a full release of animal spirits. High debt didn’t deter buyers from this month’s Intelsat and SeaWorld initial public offerings. Now comes Qiwi, a Cyprus-domiciled, Russian payment system warning about the potential effects of organized crime, the island’s bailout, money laundering and a dual-class share structure. It puts investor appetite to the ultimate test.
from MacroScope:
Central bank independence is a bit like marriage: Israel’s Fischer
For Bank of Israel governor Stanley Fischer, this week’s high-powered macroeconomics conference at the International Monetary Fund was a homecoming of sorts. After all, he was the IMF’s first deputy managing director from 1994 to 2001. The familiar nature of his surroundings may have helped inspire Fischer to use a household analogy to describe the vaunted but often ethereal principle of central bank independence.
Fischer, a vice chairman at Citigroup between 2002 and 2005, sought to answer a question posed by conference organizers: If central banks are in charge of monetary policy, financial supervision and macroprudential policy, should we rethink central bank independence? His take: “The answer is yes.”
from Felix Salmon:
The problem with Promontory
The NYT and American Banker have both published detailed articles on Gene Ludwig and Promontory, with the former getting the most eyebrow-raising datapoint: never mind his $11.5 million Washington estate, Ludwig is paying himself "more than $30 million annually, making him better paid than top executives at many big banks".
In fact, $30 million a year makes Gene Ludwig better paid than any executive at any bank: to put that number in context, JP Morgan's Jamie Dimon was paid $11.5 million last year, down from $23 million in 2011, while Goldman Sachs's Lloyd Blankfein made $21 million in 2012. Those men run huge international banks with tens of thousands of employees and balance sheets which are properly calculated in the trillions; Ludwig, by contrast, basically just runs an advisory shop with no balance sheet to speak of at all.
from Breakingviews:
HBOS top brass reap what they sowed
By George Hay
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
HBOS’s top managers are finally starting to reap what they sowed. So far, official blame for the spectacular collapse of one of the UK’s biggest banks has been restricted to its former head of corporate lending Peter Cummings, who was fined 500,000 pounds by the UK regulator in September. A hard-hitting report by Britain's Parliamentary Commission on Banking Standards has rightly begun to point the finger at the very top.
from Breakingviews:
UK’s new bank capital tsar starts as good cop
By George Hay
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
The UK’s new bank capital tsar has started life as a good cop. The Financial Policy Committee, created to monitor macroeconomic risks facing domestic lenders, has ordered banks to raise 25 billion pounds by the end of the year. That’s a lot, but it could have been worse.
