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Oct 8, 2012

Greek banks need more than a megadeal to be a buy

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

By George Hay

LONDON, Oct 8 (Reuters Breakingviews) – Colossal synergies,
unassailable market dominance and a cheap valuation. National
Bank of Greece’s (NBGr.AT: Quote, Profile, Research) megadeal with rival Eurobank EFG
(EFGr.AT: Quote, Profile, Research) has the ingredients that normally make investors
salivate. But this is Greece, and even this startling
combination doesn’t add up to a compelling equity story in the
Greek banking sector.

Oct 1, 2012
via Breakingviews

Spain adds bank stress tests to saga of missteps

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By George Hay

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

Spain is doing its Don Quixote impression again. The troubled euro state’s latest attempt at shoring up trust in its imploding banking system was supposed to be the final one. Madrid was expected to pump enough capital in its lenders to lay concerns to rest. But the rosy assumptions chosen by the government are still too close to Cervantes’ ever-dreaming literary character.

Sep 28, 2012
via Breakingviews

Review: The real way HBOS gave us extra

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

Anyone watching British TV in 2002 will probably remember Howard from the Sheldon branch. The bald, bespectacled bank teller at a new bank called HBOS tried to attract deposits by singing clumsily adapted pop songs. The nadir of this allegedly amusing commercial effort was undoubtedly “Who gives you extra?”, a parody of the Baha Men’s “Who let the dogs out?”. Like Howard, who rapidly became a star, HBOS was trying to be something it was not.
“Hubris: How HBOS Wrecked the Best Bank in Britain”, Ray Perman’s timely guide to the bank’s spectacular 2008 demise, gives a comprehensive insight into what HBOS “extra” ended up being: an extremely unamusing forced takeover, and an 11.5 billion pound state recapitalisation.

Sep 28, 2012
via Breakingviews

UK blazes the right trail on Libor reform

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By George Hay

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

Martin Wheatley’s Libor reforms strike the right balance. Given the tidal wave of public anger in June when Barclays was shown to have attempted to fiddle the critical benchmark interest rate, the UK regulator could have recommended the London Interbank Offered Rate be scrapped entirely. His actual approach – reform rather than revolution – makes more sense.

Sep 25, 2012
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BBA ouster is right first step for Libor reform

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

So, farewell then, the British Bankers’ Association. The UK financial lobby group has signalled that it will not kick up a fuss should it lose its integral role setting and overseeing the London Interbank Offered Rate, or Libor. After a damaging global scandal in which it was revealed that banks routinely tried to fiddle the interest rate benchmark for trillions of dollars of international contracts, it’s an encouraging sign that reform will not be piecemeal.

Sep 24, 2012
via Breakingviews

Spain looking to cut corners on bank bailout

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By George Hay

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

Spain remains intent on cutting corners on its long-awaited bank bailout. The country has been promised up to 100 billion euros to recapitalise its ailing lenders. It’s looking worryingly like it will try everything to minimise the headline number. The country’s government obviously doesn’t get that it must be conservative to be credible.

Sep 19, 2012

Regulatory pushback turns up heat on Marcus Agius

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

By George Hay

LONDON, Sept 19 (Reuters Breakingviews) – The Libor-fixing
scandal continues to plague Barclays (BARC.L: Quote, Profile, Research). Proof that the UK
bank had attempted to manipulate the London Interbank Offered
Rate led to the departures of Chief Executive Bob Diamond and
Chairman Marcus Agius during the summer. Now Hector Sants, the
former chief executive of the Financial Services Authority, has
taken issue with the way Agius characterized his dealings with
the UK regulator.

Sep 12, 2012

UK rules that HBOS was a fiasco but not a fraud

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

By George Hay

LONDON, Sept 12 (Reuters Breakingviews) – HBOS was a fiasco,
but not a fraud. That’s the message from the Financial Services
Authority’s investigations into the collapse of the UK bank in
2008. But even without a smoking gun, the judgment still raises
questions.

Sep 12, 2012
via Breakingviews

EU banking union still faces multiple battles

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By George Hay

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

Europe’s new banking union still faces multiple battles.

The most basic flashpoint is how many banks should be regulated by the European Central Bank, which will call the shots under the new single supervisory mechanism. The Commission envisages the ECB having authority over all banks. But Germany, whose local savings banks are politically well connected, only wants systemically important lenders covered. The Commission’s case is strong: after all, lots of small banks from Ireland, Greece, Spain and Cyprus have caused havoc in the crisis. But Germany has immense clout in Europe’s counsels.

Sep 10, 2012

Banker pay reform rests on ROE transparency

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

By George Hay

LONDON, Sept 10 (Reuters Breakingviews) – Banks need to stop
putting the cart before the horse on pay. Most universal lenders
are still paying huge bonuses, even though it is commonly
accepted that their investment banking businesses are not
earning acceptable returns for shareholders. The obvious reform
is for banks to work out whether they are exceeding their cost
of equity, and pay out bonuses only if the answer is yes. But
for that to happen, there would also need to be a revolution in
transparency.

    • About George

      "George Hay writes about the banking and property sectors. He joined from Thomson Financial News, where he was a companies correspondent. Before that he worked at United Business Media, where he was news editor of Building Magazine. He has a first in English Literature from Edinburgh University, and was nominated in two categories at the 2009 Business Journalist of the Year Awards."
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