By Pratima Desai
LONDON, Aug 13 (Reuters) – Fears of sensitive information seeping through Chinese walls has resurfaced after the recent purchase of London Metal Exchange registered warehouses by a major trader, but that concern is not universal.
Motives for buying warehouses include diversifying revenue streams. Lucrative financing deals that tie metal up for long periods and the potential launch of physically-backed exchange traded products (ETPs) also require long-term storage.
By Simon Gardner
SANTIAGO, Aug 11 (Reuters) – A Chilean government plan to regulate taxation of derivatives to encourage currency hedging by smaller companies should boost currency liquidity, help clear uncertainty, lure investment and boost the Chilean peso.
The government is set to present a bill on derivative tax regulations to Congress within days, aiming to clear up legal uncertainties regarding hedging versus speculation and boost use of instruments to cover risk, Finance Minister Felipe Larrain said on Tuesday.
Analysts are hungry for details of the bills, which Larrain outlined at a seminar, but said they should be positive for Chile’s foreign exchange market, which is far less liquid than those of regional powerhouses Mexico and Brazil.
By Joseph A. Giannone
NEW YORK, Aug 10 (Reuters) – Wall Street regulator FINRA, which demands disclosure and openness from brokers, is under pressure to lift the veil on its own affairs.
The Financial Industry Regulatory Authority, a private corporation that regulates the nation’s 4,700 brokerages, will learns at its annual meeting on Thursday how many support a dissident’s call for more transparency.
By Jane Merriman
LONDON, Aug 6 (Reuters) – Contingent capital, a breed of hybrid bond that could help capitalise banks in crisis, will struggle to grow into a mainstream asset class if rating agencies persist in refusing to rate it.
Contingent capital came into the spotlight nine months ago when Lloyds, converting existing hybrid debt, raised over 10 billion pounds as it raced to shore up its balance sheet.
The new form of hybrid bonds convert into equity capital when a bank hits trouble, topping up capital if it falls below a certain level, an attractive option for issuers especially as equity capital is expensive and scarce.
By Paul Taylor
PARIS, Aug 9 (Reuters) – What a difference a few weeks make.
In early June, doomsayers were predicting the demise of the euro after a 110 billion euro ($145.2 billion) bailout for Greece and a $1 trillion financial safety net for the rest of the 16-nation single currency area failed to calm market panic.
European banks were hardly lending to each other, the euro had hit a four-year low against the dollar, and there was widespread talk that Greece would have to default on its debt.
“We are assigning a higher and higher probability to a break-up of the euro zone,” Gina Sanchez, director of equity and asset allocation strategy at Roubini Global Economics told a Reuters Summit on June 8.
– John Kemp is a Reuters market analyst. The views expressed are his own –
By John Kemp
LONDON, Aug 6 (Reuters) – Russia’s decision to ban grain exports will be welcomed by some physical grain traders because it allows them to declare “force majeure”, walking away from wheat supply contracts that had become increasingly uneconomic to perform.
Force majeure was originally developed as a doctrine under civil law systems. There is no automatic or general right to invoke force majeure in the common laws of England and New York that govern most international commodity supply contracts.
By Peter Apps, Political Risk Correspondent
LONDON, Aug 6 (Reuters) – The arguments over whether several emerging nations can effectively hack BlackBerry devices give a rare glimpse of the shadowy world of state electronic surveillance already changing politics, espionage and business.
Saudi Arabia and the United Arab Emirates are both in dispute with Canadian smartphone maker Research In Motion, saying they want access to the encrypted phones to monitor security threats. Both are threatening to block its messenger function.
NEW YORK, Aug 6 (Reuters) – Ben Franklin observed that nothing can be said to be certain except death and taxes. Thanks to Congress, you can strike taxes from that short list.
Political stalemate has made 2010 the year without an estate tax, which means multimillionaires who died this year can pass on all their wealth without paying a penny to Uncle Sam.
Yet the odds of Congress reinstating the tax this year, while increasingly slim, are putting windfalls on hold.
By David Morgan
WASHINGTON, July 27 (Reuters) – Wall Street executives who endured two years of blame for the U.S. financial crisis and now face costly industry reforms are turning against Democrats by shifting campaign contributions to Republicans.
Long a reliable source of big contributions for Democratic coffers, financial institutions in New York, Chicago and San Francisco are dialing back donations and vowing to shun lawmakers who pushed for the toughest provisions as reform moved through Congress to President Barack Obama’s desk.
Financial executives say they were unfairly blamed for the worst recession since the 1930s so that Democrats could deliver politically motivated reforms to angry voters — reforms that will now cost firms billions of dollars in revenue.
By Maria Aspan and Kim Dixon
NEW YORK/WASHINGTON, July 26 (Reuters) – Elizabeth Warren, clad in cardigans and pearls, has become Wall Street’s public enemy No. 1, but that very vitriol that could earn her a post heading the government’s new consumer watchdog agency.
“I get disgusted every time I hear her speak. It’s like she’s sitting in some ivory tower, not understanding the ramifications of anything she says,” said Anton Schutz, president of Mendon Capital Advisors. “Any person you put in that role really ought to have some industry experience.”
Warren, a Harvard law professor and outspoken consumer rights advocate, is currently a top monitor of the government’s $700 billion bailout of the financial system.
