Breakingviews

Volatility is the new weather for Citi and BofA

January 15, 2015

Both joined JPMorgan in blaming market ups and downs for hurting earnings. That’s rich after years of claiming conditions were too docile. Nor can it mask the deeper problem at the two banks. Even if traders do better and one-offs are stripped out, returns remain inadequate.

James Gorman can leave Brian Moynihan in slow lane

December 18, 2014

The Morgan Stanley and BofA CEOs each marks five years in charge in 2015. Neither has had an easy time of it. Gorman, though, ought to be able to lead his firm back above a 10 pct ROE – an important, if humdrum, ambition. Moynihan’s lending behemoth remains a ways off that.

BofA stuck in a low-profitability trap

July 16, 2014

Several of the bank’s businesses put in a good showing for the second quarter. Trouble is, even after aggressive cost-cutting, BofA is floundering. Strip out legal costs, tax breaks and other noise, and the firm run by Brian Moynihan can only manage a 6.4 pct return on equity.

Shorter-hour memos won’t cure sick bank cultures

By Edward Hadas
January 14, 2014

Investment banks now want younger workers to spend less time on the job. And they’re also appalled at insider-trading allegations, including a new one on U.S. interest-rate swaps. But such practices won’t stop without an end to the industry’s endorsement of amoral ambition.

JPMorgan pays price for embarrassing regulators

September 19, 2013

The bank is close to a $700 mln Whale-trade deal. It’s the rancid cherry on the cake CEO Jamie Dimon baked with shareholders’ flour and eggs, making watchdogs look stupid after years of chiding them. It’s unlikely to cost him his job. But it’s a good lesson in hubris management.

Brian Moynihan can’t ignore Citi’s regime change

October 17, 2012

The BofA boss has had less time in the corner office than Vikram Pandit did. But he faces the same challenges to boost performance, as the bank’s third-quarter 6.3 pct ROE shows. While improving, Moynihan needs to do more before he, too, clashes with the board and shareholders.

Latest attempt to find Libor victim: Main Street

October 17, 2012

U.S. homeowners are accusing big banks of making money out of nudging the benchmark interest rate higher. Bringing in Joe Public could add to political pressure for tougher regulation. Even so, it’s hard to see how more than a tiny amount of harm was done.

Wall Street, City pay still must fall by a third

October 11, 2012

Morgan Stanley’s boss is right that investment banking is overstaffed and overpaid. The bill for traders, advisers and money managers at seven global firms needs to drop by about $30 bln, a Breakingviews calculator shows, to give shareholders a shot at decent returns on equity.

BoE governor’s arm-twisting raises tricky issues

By Hugo Dixon
July 11, 2012

Barclays’ chairman says Mervyn King made it plain to him that Bob Diamond no longer enjoyed the support of regulators. While the bank should have got rid of its CEO, King had no official authority to tell it to do so. So what exactly happened?

BofA shareholders resigned to life on skid row

August 23, 2011

Bank of America's shareholders are resigning themselves to life on skid row. Fears of a dilutive capital hike have helped send the stock down to just 30 percent of book value. The worries may prove overblown.