Dominic's Feed
Jan 13, 2014
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Leverage reprieve may be short-lived

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By Dominic Elliott

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

Banks’ reprieve from leverage ratio prescriptions could be short-lived. The Basel Committee that oversees global banking rules has tweaked the way it measures a lender’s equity as a proportion of its assets. European banks with big fixed income trading operations, like Deutsche Bank and Barclays, stand to benefit most and their shares have rallied. But the flipside is that a common global measure could in time be raised more easily.

Dec 4, 2013
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Libor losers become EU cartel winners

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By Dominic Elliott and George Hay
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

The rewards of early settlement in the Libor scandal are becoming more obvious. The first banks to settle with financial agencies over allegations of rate-rigging, Barclays and UBS, have just saved $930 million and $3.4 billion respectively in trust-busting fines after blowing the whistle on other miscreants to the European Commission. Their lenient treatment highlights the risks in delaying settlements, and the potentially extreme penalties when wrongdoing is categorised as anti-competitive.

Nov 22, 2013
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Banks need to lop another quarter off costs

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By Dominic Elliott

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

Big has been bad for shareholders in investment banks. That’s according to a report published by consultancy McKinsey on Nov. 20. The 13 largest investment banks made an average return on equity (ROE) of just 8 percent last year – below the 10 percent achieved by the next 200. Given banks’ double-digit cost of capital, the bulge bracket is still frittering away shareholders’ money. More cuts are needed.

Oct 31, 2013
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FX probe shows risks of benchmarks

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By Dominic Elliott

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

A regulatory probe into allegations of rigging in foreign-exchange markets shows that the benefits of benchmark rates come with risks. Four investment banks – Barclays, Deutsche, Royal Bank of Scotland and UBS – confirmed on Oct. 29 and Oct. 30 that they were reviewing their FX trading practices. U.S., UK and Swiss regulators all said earlier in the month that they were investigating trading in currency markets. In anticipation of a potential backlash, Royal Bank of Scotland emailed select clients last week to reassure them about its FX rates-setting process, according to a person who has read the email.

Oct 29, 2013
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Deutsche’s fixed-income pain could exceed rivals’

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By Dominic Elliott

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

Deutsche Bank’s third-quarter hit in fixed-income trading could presage a painful loss in market share. The German bank suffered a 48 percent fall in third-quarter debt sales and trading revenue – as bad as any peer. And things could get tougher still.

Oct 24, 2013
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Credit Suisse shoved into another restructuring

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By Dominic Elliott

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

When Credit Suisse decided to shrink its fixed income business, many thought it wasn’t enough. They were right. After cutting a third of its products since 2009, the Swiss bank is renewing the assault.

Oct 22, 2013
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Blueprint for new BoE could start with rebrand

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By Dominic Elliott and Christopher Hughes
The authors are Reuters Breakingviews columnists. The opinions expressed are his own.


Bank of England Governor Mark Carney has hired McKinsey and Deloitte to advise on strategy. Breakingviews imagines what the consultancies might recommend.

Sep 17, 2013
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Smooth Lloyds sale is mixed omen for bank ECM

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By Dominic Elliott

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

The ease with which the UK government has offloaded 3.2 billion pounds of shares in Lloyds Banking Group is a mixed omen for bank equity sales. The disposal was perfectly timed and expertly sized. But unusually strong demand from U.S. funds was also a critical factor in its success.

Sep 12, 2013

Deutsche Libor case dumps burden of proof on banks

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

By Dominic Elliott

LONDON, Sept 12 (Reuters Breakingviews) – The odd bad apple
excuse may become more difficult for banks confronted with
employees’ disreputable behaviour. A Frankfurt judge has ordered
Deutsche Bank (DBKGn.DE: Quote, Profile, Research) to reinstate four traders it fired in
February for alleged rate-setting misdeeds, partly on the
grounds that the German lender’s rules weren’t explicit enough.
The ruling may yet be appealed, but the verdict nonetheless
illustrates how hard it is to nail Libor wrongdoing. According
to evidence heard in court, Deutsche Bank’s internal probe
appears to have been relatively wide-ranging and long-lasting.
The bank interviewed 40 people involved in setting Libor and
Euribor before firing five traders in February, one of whom
settled separately.

Aug 30, 2013

Shadow bank leverage curbs need more work

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

By Dominic Elliott

LONDON, Aug 30 (Reuters Breakingviews) – Curbing leverage in
opaque areas of finance sounds like a good idea. The Financial
Stability Board of global regulators reckons it can make markets
safer by placing hard limits on lending against specific assets
– particularly for securities lending and repo financing. If it
wants to go down that path, the proposals need more work.

    • About Dominic

      "Dominic is a London-based columnist covering investment banking. Prior to Breakingviews, he spent two years at moneydealer ICAP, where he brokered equity derivatives trades between investment banks, high-frequency trading firms and hedge funds. He has more than five years of financial journalism experience, including stints as news editor and investment banking editor at Financial News. He has also written for The Wall Street Journal Europe. Dominic holds an MA in Classics from Oxford University and an MSc in Development Management from the London School of Economics. Follow Dominic on Twitter @DominicElliott"
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