Too-big-to-fail rules make banking less global

November 9, 2015

New guidelines will force lenders to hold big buffers of capital in their overseas arms. American and European banks can phase in their bail-in needs, and big Chinese groups no longer get off scot-free. Even so, the regulatory regime looks set to be another balkanising force.

Deutsche Bank revamp puts capital ahead of returns

April 27, 2015

Exiting Postbank, and cutting 200 bln euros of investment bank assets and 3.5 bln euros of costs, is what the German lender needs. A 5 pct leverage ratio goal is also higher than expected, raising the bar for European rivals. But it means investors face a wait for decent returns.

Santander has a 6 bln euro capital opportunity

September 26, 2014

The Spanish bank’s diversification and earnings power are cushions against a shock. But the core capital ratio looks tight. Given Santander’s high valuation, there may not be a better time to boost equity and silence capital sceptics. Raising 6 bln euros would do the trick.

Review: Seeing through bankers’ woolly thinking

March 22, 2013

Banks like to argue that higher capital ratios kill lending. A new book by economists Anat Admati and Martin Hellwig exposes this as self-serving. But getting lenders to bear their true costs to society will mean overcoming vested interests that extend beyond the industry.

Barclays in capital fog after Deutsche U-turn

May 1, 2013

The UK bank is looking exposed after its German peer raised 3 bln stg in new capital. Like Deutsche, Barclays may need more capital for its U.S. operations. And it remains to be seen whether the bank can count on hybrid debt or its main Qatari investors to plug any capital hole.

Volcker Rule won’t so quickly squelch house bets

August 5, 2010

Don't think Goldman Sachs is finished putting its own capital at risk. The Wall Street firm may be rushing to either restructure or spin off its private equity and proprietary trading units to comply with the newly enacted Volcker Rule. But the directive remains vague and leaves ample room for Goldman and its Wall Street rivals to bet with plenty of the house's money.

ECB’s bank review balances pragmatism and pain

October 23, 2013

The central bank’s template for its assessment of euro zone banks’ finances looks robust inasmuch as it will help harmonise opaque and disparate balance sheets. It’s not that strenuous on capital buffers – which takes sting out of the question of who will fill the holes.

Review: Zero margin call

April 4, 2014

Capitalism is dying, says Jeremy Rifkin in a new book. The wealthy can no longer expect to get rich at the expense of those wanting access to capital. As profit becomes a thing of the past, the age of collaboration is dawning. It is an intriguing but unconvincing thesis.

The FDIC tries a new gimmick

September 29, 2009

In the latest government gimmick to protect bank capital, the FDIC plans to replenish its Deposit Insurance Fund by front-loading regular premiums in lieu of another "special assessment." The good news is that the fund gets replenished and taxpayers don't foot the bill. The bad news is that Sheila Bair is missing a great opportunity to shrink the financial sector.

Banks’ escape won’t solve capital woes

September 29, 2009

One by one, Europe's banks are trying to wriggle free from state control. BNP Paribas is the latest escapee, with a plan to replace government-owned preference shares with common equity raised from shareholders. Judging by the market's reaction, it is unlikely to be the last. But the upbeat mood obscures the fact that banks have so far done precious little to expand their capital buffers.