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Jun 28, 2012

Libor fallout could trash UK bank earnings again

By George Hay

LONDON, June 28 (Reuters Breakingviews) – The Libor scandal
is a red rag to compensation lawyers. For British banks, the
affair threatens to force them into making hefty provisions that
would trash earnings a second year in a row. And the pain could
spread beyond the UK.

In 2011, UK lenders’ profit was savaged by multi-billion
pound provisions to deal with the legal fallout from the
misselling of useless insurance to protect mortgages from
default. Now investors are rightly fearing another earnings
bonfire following revelations that Barclays (BARC.L: Quote, Profile, Research) and
potentially other global banks have been manipulating the London
Interbank Offered Rate. Barclays’ shares fell 15 percent on June
28, while Royal Bank of Scotland (RBS.L: Quote, Profile, Research) fell 11 percent.

Jun 28, 2012

BREAKINGVIEWS:Libor fallout could trash UK bank earnings again

By George Hay

LONDON, June 28 (Reuters Breakingviews) – The Libor scandal
is a red rag to compensation lawyers. For British banks, the
affair threatens to force them into making hefty provisions that
would trash earnings a second year in a row. And the pain could
spread beyond the UK.

In 2011, UK lenders’ profit was savaged by multi-billion
pound provisions to deal with the legal fallout from the
misselling of useless insurance to protect mortgages from
default. Now investors are rightly fearing another earnings
bonfire following revelations that Barclays (BARC.L: Quote, Profile, Research) and
potentially other global banks have been manipulating the London
Interbank Offered Rate. Barclays’ shares fell 15 percent on June
28, while Royal Bank of Scotland (RBS.L: Quote, Profile, Research) fell 11 percent.

Jun 28, 2012
via Breakingviews

MPS capital plan only solves immediate crisis

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By George Hay

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

Monte dei Paschi di Siena has bowed to the inevitable. Italy’s third-largest bank always looked a good 1.5 billion euros short of capital to pass the European Banking Authority’s stress tests. That’s exactly the amount the Italian state will now pump into the Tuscan lender.

Jun 27, 2012
via Breakingviews

Barclays’ Libor penalty goes beyond the financial

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

Barclays’ reputation has hit a new low. The UK bank on June 27 received a 290 million pound fine from UK and U.S. regulators for trying to rig the London Interbank Offered Rate (Libor). The UK element is the biggest fine the Financial Services Authority has ever handed out.

Jun 26, 2012

Mexican glassmaker case may export U.S. bankruptcy rules

By Tom Hals

(Reuters) – Mexican glassmaker Vitro SAB is heading to a U.S. appeals court to save its restructuring at home from an assault by U.S. creditors in a case that could transport the U.S. bankruptcy code beyond that nation’s borders.

The case pits one of Monterrey, Mexico’s powerful and politically connected “Group of 10″ businesses against U.S. hedge funds, which Latin American critics have reviled as “vultures” for their battle against Argentina’s sovereign debt restructuring.

Jun 25, 2012

RBS tech mess will entrench UK’s “free” banking

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

By George Hay

LONDON, June 25 (Reuters Breakingviews) – Stephen Hester
must be chewing the carpet. Since joining the Royal Bank of
Scotland after its near-total nationalisation in 2008, the UK
lender’s chief executive has spent his time gradually
detoxifying RBS’s subprime-infected investment bank, and
restoring severely underpowered capital and liquidity. But he
has been tripped up by a more basic problem: the retail bank’s
payments system is on the blink.

Jun 25, 2012
via Breakingviews

Monte dei Paschi faces its moment of truth

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By George Hay

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

The citizens of Siena are used to white knuckle rides. On July 2 each year, the medieval Tuscan town hosts the Palio, a world-renowned horse race in which 10 brightly coloured jockeys and their mounts thunder three times round the central Piazza del Campo. But this year, the really gripping action will take place a week earlier, up the road at the Palazzo Salimbeni. And it will involve the local bank.

Jun 21, 2012

Sale of RG Steel mills extended by up to 4 weeks

WILMINGTON, Del, June 21 (Reuters) – RG Steel will have up
to four extra weeks to find a buyer for its three mills after
unsecured creditors objected to the bankrupt steelmaker’s
original auction schedule as a rushed fire sale.

The extended schedule, which could push the auction of the
mills to Aug. 21, came after hours of negotiations between the
company and its creditors and lenders on Thursday.

Jun 20, 2012
via Breakingviews

Chris Hohn’s Lloyds plan isn’t pure self-interest

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By George Hay

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

Hedge fund managers are not known for their altruism. So when Chris Hohn offers free advice to the UK regulator about Lloyds Banking Group, there’s a fair chance the activist investor is talking his own book. But that doesn’t mean he’s wrong.

Jun 13, 2012
via Breakingviews

UK banks’ euro zone firewall needs government help

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By George Hay

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

UK banks’ euro zone firewall needs strengthening. Despite a range of support measures introduced after the 2008 financial crisis, the Bank of England’s arsenal for managing a pan-European liquidity freeze looks underpowered when compared with the European Central Bank’s three-year loans. But if the euro zone cracks, UK lenders would be better off turning to the government for support.

    • 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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