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from Breakingviews:

“New Deutsche” just got pushed back again

By Dominic Elliott

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Raising $12 billion last month now looks like the easy part of Deutsche Bank’s renewal. The German lender is, it emerges, under fire from United States regulators for a raft of procedural failings. Deutsche may have repaired its capital position and revamped its strategy this year. But persuading investors the bank holds itself to higher standards than before the crisis is starting to look like a generation’s work.

The Federal Reserve Bank of New York voiced disapproval to Deutsche in December, according to a letter leaked to the Wall Street Journal. The charge-sheet is serious. Deutsche’s inadequate housekeeping stretches back to 2002. Worse, the watchdog found the bank had failed to make any progress in fixing previously flagged failings.

Other big banks’ reporting systems have also been found wanting since the crisis. There were 800 IT-system data points that the FRBNY says Deutsche should have automated that were actually manual entry. That echoes the shoddy spreadsheet skills unearthed at JPMorgan during the “London Whale” trading fiasco. The U.S. Federal Reserve lambasted Citigroup in March for lacking robust processes to project losses and measure exposures. Bank of America Merrill Lynch, meanwhile, revealed in April that it had been miscalculating its capital position.

from Breakingviews:

UK banks have much to fear from latest probe

By Chris Hughes

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The latest competition review of UK banking should aim to be the last. An antitrust probe in 2000 led to limited price controls after concluding that British lenders made excess profit. There were two more big investigations after the financial crisis. Yet concerns about market inefficiencies persist. That suggests the Competition and Markets Authority should do something radical this time.

from Breakingviews:

Why investors were taken in by Gowex

By Fiona Maharg-Bravo

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

It’s easy to be wise with hindsight. Take the collapsed Spanish free wifi provider Gowex. The company raised several large red flags that domestic regulators and investors should have noticed. It took a foreign investor, specialist short-seller Gotham City Research, to uncover Gowex chief executive’s fraud.

from Breakingviews:

Portugal in race against time to sort out BES

By George Hay and Neil Unmack

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

Lisbon needs to sort out Banco Espirito Santo – fast. Despite a recent successful rights issue, Portugal’s second-largest bank by value has a troubled major shareholder and a large exposure to shaky Angolan loans. With Portuguese bond yields up 40 basis points since July 7 and domestic bank shares tanking, a speedy restructuring is needed.

from Breakingviews:

Capital flight crackdown would hurt outside China

By Peter Thal Larsen

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

A Chinese crackdown on capital flight would be felt around the world. The government has long tolerated some cash finding its way around the country’s financial border controls. If Beijing decides to plug the leaks then banks, casinos and overseas property markets would suffer.

from Breakingviews:

U.S. cooks up penalties with anti-foreign flavor

By Reynolds Holding

The author is a Reuters Breakingviews columnist. The opinions expressed are his own. 

Uncle Sam is cooking up penalties with an anti-foreign flavor. New research suggests that overseas firms like BNP Paribas do in fact pay bigger fines and plead guilty more often than U.S. companies. One reason may be that prosecutors target only the most serious cases abroad. But the differences feed suspicions that America is playing favorites.

from Breakingviews:

Barclays’ hit reflects investment bank fears

By Dominic Elliott

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The market’s reaction to accusations that Barclays duped clients in its dark pool reflects more general fears of investment banking. Shares in the UK bank tanked as much as 9 percent on June 26 after New York Attorney General Eric Schneiderman alleged Barclays misled investors by playing down the number of “predatory” high-frequency traders on its private trading platform for equities. Barclays says it takes the allegations “very seriously.”

from Breakingviews:

China veto is wake-up call for world’s dealmakers

By Ethan Bilby 

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Chinese regulators have sunk their first overseas transaction, killing a container-shipping alliance led by Denmark’s Maersk. The particular national interest made this tie-up especially vulnerable. But there’s a real risk China could torpedo other global deals.

from Breakingviews:

BNP’s chief operating officer retires. Next?

By Pierre Briançon

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.  

The only thing missing in the BNP Paribas release announcing the retirement of Chief Operating Officer Georges Chodron de Courcel is that he wanted a new challenge. Otherwise, it is business as usual at France’s largest bank: the long-serving No. 2 was planning to retire in September. He suddenly noticed that a new French law was putting a limit on the number of directorships he could hold, so in fact he will leave at the end of this month. U.S. probe, anyone? Sanctions violations? Multibillion-dollar fine?

from The Great Debate UK:

The Banking Standards Review Council has the potential to make a difference

--Tim Dolan is a Partner in the Financial Markets team in King & Wood Mallesons SJ Berwin’s London office. The opinions expressed are his own.--

With the Financial Services Authority (FSA) already replaced by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA), what use does the UK have for another new financial sector body, the Banking Standards Review Council?

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