Breakingviews

Trading illiquidity theories lack solid ground

June 18, 2015

Blackstone’s Steve Schwarzman is the latest financial bigwig to argue that the enforced shrinkage of banks’ activities is hurting liquidity so badly that it could fuel the next crisis. A look at how markets have changed – and how brokers actually behave – suggests otherwise.

Deutsche’s attitude problem compounds Libor hit

April 23, 2015

The German bank is paying a record $2.5 bln to settle rate-rigging charges. To make things worse Deutsche Bank misled the UK regulator and others. That’s not smart in a highly regulated industry. With a currency market fine also pending, the reputational damage could grow.

Santander’s U.S. woes a cautionary M&A tale

March 12, 2015

The Spanish bank’s stateside lender is struggling to pass the Fed’s stress test for the second year in a row. A flawed bank takes time to fix. But Santander let it drag on too long. New bosses should help. The tardy response, though, keeps Santander on the takeover sidelines.

Guest view: Banks need to lead on cultural change

By Guest Contributor
January 6, 2015

While lenders have boosted capital, reduced leverage and added liquidity, they have not shown the same commitment to adjusting their core behaviors, including their risk cultures, argues former Citigroup executive and author William Rhodes.

Europe could edge past U.S. in race to courthouse

December 17, 2014

New rules and bank scandals boost financial fraud and class-action filings in Britain. Patent combatants flock to German judges. And spats over failed investments clog EU courts. The upshot: a lawsuit boom that may topple America as the world’s business litigation capital.

Billy Salomon dies as his trading era returns

December 10, 2014

In 15 years as boss of his father’s eponymous firm, Salomon, who passed at age 100, made it a bonds powerhouse. Wall Street twisted the model into prop desks that helped seed the financial crisis. U.S. banks are now barred from such trades. What’s left is more Salomon’s style.

Wall Street in grip of Geithner nostalgia

December 2, 2014

When the former U.S. Treasury boss made a surprise visit to a recent gathering of bank CEOs, the warm welcome he received could be misinterpreted as appreciation for an old softy. In fact, it was recognition that the current regime doesn’t have its heart in financial regulation.

Wells Fargo: first big bank simple enough to fail

November 26, 2014

The $1.6 trln lender secured a provisional stamp of approval from regulators for its living will. Less credible plans from 11 other titans suggest size isn’t the issue. Wells ranks fourth in assets and first in market cap. The real problems are complexity and interconnectedness.

UBS’ legal pain is beginning to look manageable

October 28, 2014

The Swiss bank is still paying for past sins, with a 12 month extension of a U.S. non-prosecution deal and a hefty $1.9 bln addition to legal reserves in the third quarter. But the underlying businesses are now prospering. Investors can finally eye decent returns.

China’s capital defences have sprung a major leak

October 22, 2014

Strict controls should shield China from flighty foreign capital. In practice, investors have snuck in at least $725 billion of short-term money since 2008. That makes the economy vulnerable to outflows. Central bankers are saddled with preventing a trickle becoming a flood.