George's Feed
Oct 29, 2014
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Deutsche Bank’s fixed income wager yet to pay off

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By George Hay

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

Deutsche Bank’s strategy is still on probation. The German group decided earlier this year not to follow Barclays, its largest European rival, in cutting back its investment bank. The bet will only pay off if the recent slowdown in bond trading is merely cyclical, not part of a structural decline. The evidence from the third quarter results is inconclusive.

Oct 27, 2014
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EU bank stress-test winners still short of capital

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By George Hay

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

Investors are turning their noses up at the European bank stress tests. Shares in the sector fell 1.9 percent on average on the morning after publication, with both banks that passed and those that failed being targeted. That’s because a clean bill of health on the test’s headline terms does not necessarily mean a lender has enough capital over the medium term.

Oct 1, 2014
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Sovereign doom loop haunts EU bank stress tests

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By George Hay

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

The euro zone’s nascent banking union was supposed to unpick the “sovereign doom loop” by which ropey banks endangered weak countries, and vice versa. Its first task was to be a rigorous test of how much capital each lender could count on in adverse scenarios. Yet the new single banking supervisor’s exercise could tighten, rather than loosen, the state/bank co-dependency.

Sep 19, 2014
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Scots’ no to independence still leaves UK in limbo

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By George Hay

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

Scotland’s landmark decision to reject independence is not the end of British uncertainty. The 55:45 split, with almost all the votes counted early on Sept. 19, leaves the UK intact. But the terms of the unionist victory introduce tensions which could yet lead to a national division.

Sep 11, 2014
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RBS/Lloyds moving plans leave key questions opaque

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By George Hay

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

Scotland’s largest banks have moved to head off a crisis. Royal Bank of Scotland and Lloyds Banking Group say they will shift their Edinburgh-domiciled operations to London, should Scots vote for independence on Sept. 18. That’s a step towards financial stability – but not if you’re a Scottish consumer.

Aug 20, 2014
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Latest blunder hits StanChart where it most hurts

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By George Hay

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

Standard Chartered’s latest blunder hits the UK bank where it hurts most. New York State’s Department of Financial Services has slapped a $300 million fine on the emerging markets-focused lender for compliance lapses. It reinforces the disturbing impression that StanChart’s top brass aren’t on top of things.

Aug 14, 2014
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Holiday email embargo a must-have, not an opt-in

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By George Hay

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

Daimler wants to stop email ruining the holidays of its 275,000 employees. So the German carmaker is giving them the right to have all messages received during vacation automatically re-routed, with the sender warned to try again later. In this case, choice may not be the best policy.

Aug 1, 2014

Underwriters share blame in Portuguese bank fiasco

By George Hay and Dominic Elliott

LONDON, Aug 1 (Reuters Breakingviews) – Banco Espirito
Santo’s shares have tanked 70 pct since a rights issue barely
two months ago. UBS and Morgan Stanley, which led the 1 bln euro
equity raise, hoisted red flags. The banks could have heeded
their own findings and refused the job. Customers have a right
to be angry.

A full view will be published shortly.

CONTEXT NEWS

- Banco Espirito Santo on July 30 reported a loss of 3.6
billion euros and said it would need to raise fresh capital. The
Bank of Portugal said senior BES officials had been suspended
over suspected “harmful management” that may have contributed to
the bank’s losses.

Jul 31, 2014
via Breakingviews

Shock loss at BES makes bail-in a real risk

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By George Hay

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

A solution to the Banco Espirito Santo debacle looks increasingly likely to involve creditors. The troubled Portuguese lender revealed a much bigger-than-expected 3.6 billion euro loss on July 30 and warned of possible past law-breaking. If the kitchen-sinking was intended to help fill BES’s capital deficit with private investment, it may not work.

Jul 24, 2014
via Breakingviews

StanChart at risk of “doing an HSBC” – badly

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By George Hay

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

Standard Chartered STAN.L is doing a passable impression of HSBC circa 2010. The UK-based emerging markets bank has told investors that it does not accept “media rumours” concerning the future of Chairman John Peace and Chief Executive Peter Sands. The parallels with HSBC’s succession planning four years ago – a crisis that culminated in the dual departures of chairman and CEO amid a boardroom power struggle – are worrying.

    • About George

      "George Hay coordinates European financial coverage and writes about macroeconomics, the euro zone and UK/European financial policy. He covered European banks for Breakingviews during the financial crisis, and has also worked as a correspondent for AFX News and at United Business Media. He attended Edinburgh University and his work has been recognised at the UK’s Business Journalist of the Year Awards. Follow George on Twitter @gfhay"
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