EU needs better capitalised banks, not bigger ones

October 12, 2015

SocGen and Barclays warn big European broker-dealers are being outmuscled by U.S. rivals. That’s true, but American superiority is partly due to better capital positions. Sorting this out, even at the expense of short-term competitiveness, makes more sense than easing regulation.

The Devil’s Dictionary of Post-Crisis Finance

By Edward Chancellor
October 9, 2015

Ambrose Bierce wrote “The Devil’s Dictionary” a century ago, ranging acerbically across government, commerce and life. Breakingviews’ original re-use of the form for finance – in 2007, when the crisis was barely beginning – is no longer adequate. Herewith part one of the sequel.

StanChart takes bet on management incompetence

October 9, 2015

The UK-listed emerging markets lender is to cut a quarter of its 4,000 top people, Reuters reports. Something is definitely needed to improve StanChart’s capital and returns. But this plan will only work if 1,000 high earners aren’t paying their way.

Hillary Clinton lands soft punches on Wall Street

October 8, 2015

The White House hopeful has unveiled a slew of ideas for reining in financial excess. Initiatives like imposing risk fees on big banks and improving hedge fund reporting won’t win many friends in the industry. But they’re manageable blows that Wall Street could roll with.

Deutsche Bank’s kitchen sink augurs new plumbing

October 8, 2015

Germany’s biggest lender has shocked with a pre-announced 6.2 bln euro Q3 loss on writedowns of past M&A. Even the symbolic dividend looks endangered. In particular, a revaluation of the 1999 Bankers Trust deal implies new boss John Cryan may have a thorough renovation in mind.

Hugo Dixon: Greek bank recap is race against time

By Hugo Dixon
October 5, 2015

Capital must be injected by year-end to avoid a disastrous bail-in of uninsured depositors. To meet the deadline, Europe’s central bank must finish its stress test and decide how much capital is required. The banks then need time to see if private investors will take part.

Rob Cox: Poland risks backsliding on free markets

October 1, 2015

The country’s unparalleled success since communism’s fall owes much to its embrace of a liberal economic agenda. As elections approach, the rhetoric from leading politicians suggests a worrisome slippage from the principles that make Poland the envy of its European neighbors.

VW emissions scandal could be auto sector’s Libor

September 21, 2015

U.S. authorities say Europe’s biggest carmaker rigged emissions tests. The questions it raises recall bank rate-fixing scandals: how widespread the bad behaviour was, whether bosses knew, and who else was at it. Without rogue traders to blame, this could be harder to defuse.

CDS market wrestles to throw off Libor’s shadow

September 15, 2015

A $1.9 billion settlement adds credit default swaps to the market abuse hall of shame. There, as with Libor, banks are accused of abusing their position. Yet further issues look less likely: post-crisis regulation is offsetting lenders’ still-significant role.

Bank watchdogs tie themselves in knots over TLAC

September 10, 2015

Financial regulators are throwing a bone to sprawling global banks by watering down plans for what happens if a lender goes bust. Putting the likes of HSBC on an even footing with rivals structured differently is justifiable. But it makes resolving crises that bit harder.