Spain’s bank rescue is part bail-in, part bail-out
By George Hay and Neil Unmack
The authors are Reuters Breakingviews columnists. The opinions expressed are their own
Spain’s bank haircuts are part bail-in, and part bail-out. The indebted government has lopped 10 billion euros off its euro zone-funded bank rescue bill by cutting the value of its worst lenders’ hybrid debt. Yet if it hadn’t been for political considerations, the burden-sharing might have been greater.
BREAKINGVIEWS:Spain’s bank rescue is part bail-in, part bail-out
(The authors are Reuters Breakingviews columnists. The opinions
expressed are their own)
By George Hay and Neil Unmack
LONDON, Nov 29 (Reuters Breakingviews) – Spain’s bank
haircuts are part bail-in, and part bail-out. The indebted
government has lopped 10 billion euros off its euro zone-funded
bank rescue bill by cutting the value of its worst lenders’
hybrid debt. Yet if it hadn’t been for political considerations,
the burden-sharing might have been greater.
Carney at BoE changes the game for UK banks
By George Hay
The author is a Reuters Breakingviews columnist. The opinions expressed are his own
Mark Carney’s appointment as governor of the Bank of England changes the game for UK banks. On the big issues – capital, liquidity, and structural reform – the Canadian central banker is unlikely to deviate significantly from current policies. But the new man’s different skills and interests, compared to current incumbent Mervyn King, could still make a tangible difference.
UK should resist yet another bank levy hike
(The author is a Reuters Breakingviews columnist. The opinions
expressed are his own)
By George Hay
LONDON, Nov 26 (Reuters Breakingviews) – The UK should
resist yet another bank levy hike. When the coalition’s annual
tax on lenders’ balance sheets was announced in June 2010, it
looked a smart way to raise cash while encouraging banks to
slash risky short-term funding. But bankers now expect a third
hike in the levy’s rate. This sensible tax risks becoming a
joke.
Monte dei Paschi finds patriotism doesn’t pay
(The author is a Reuters Breakingviews columnist. The opinions
expressed are his own)
By George Hay
LONDON, Nov 23 (Reuters Breakingviews) – Monte dei Paschi
(BMPS.MI: Quote, Profile, Research) is about to find out that patriotism doesn’t pay. The
venerable Italian bank had hoped that the latest 1.5 billion
euros of bailout cash it received from the Italian government
wouldn’t end up diluting its existing shareholders too much. But
Brussels is likely to nip this in the bud.
Investment banks’ next challenge: cutting salaries
(The authors are Reuters Breakingviews columnists. The opinions
expressed are their own)
By Peter Thal Larsen and George Hay
HONG KONG/LONDON, Nov 6 (Reuters Breakingviews) – Investment
banks are facing a new conundrum: how to cut their employees’
salaries. The industry made a collective blunder when it
responded to the crisis by upping basic pay, particularly for
senior bankers. That has made it harder for banks to cut costs
as revenue withers. Reversing the hike won’t be easy, especially
as regulations remain uncertain. But if the alternative is to
chop a greater number of jobs, employees may reluctantly agree.
Barclays needs a decisive UBS-style strategy shift
By George Hay and Dominic Elliott
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.
Barclays needs a decisive, UBS-style change of direction. While rivals like Deutsche Bank and Credit Suisse saw revenue in fixed income, currencies and commodities spike in the third quarter, Barclays’ normally strong FICC business underperformed. Worse, the results also included two fresh regulatory probes. It shows why new chief executive Antony Jenkins should consider changes as radical in tone as UBS’s root-and-branch restructuring.
Spain needs to do more to tempt bad bank investors
(The author is a Reuters Breakingviews columnist. The opinions
expressed are his own)
By George Hay
LONDON, Oct 30 (Reuters Breakingviews) – Spain at last has
put a price on its banks’ stinky assets. The indebted euro zone
member said on Oct. 29 that toxic property loans belonging to
its most troubled lenders would be transferred to an “asset
management company” (Sareb in its Spanish acronym), at around
half their nominal value. But this may not prove enough to
entice the private investors needed to keep the entity off the
state’s books.
Breakingviews-Can Barclays old boys make the Irish play pay?
(The author is a Reuters Breakingviews columnist. The opinions
expressed are his own)
By George Hay
LONDON, Oct 24 (Reuters Breakingviews) – Barclays (BARC.L: Quote, Profile, Research)
former bankers like helping struggling institutions. Three years
ago a group of them enabled their ex-employer to tidy its
balance sheet when they acquired $12.3 billion of nasty
structured credit gunk through their controversial Protium fund.
Now the same team is offering assistance to Irish taxpayers,
taking a 17 percent stake in the National Asset Management
Agency, Ireland’s bad bank. Protium extracted a pound of flesh
from Barclays, and it’s not clear why Walbrook Capital, as the
latest venture is known, wouldn’t do the same.
RBS’s CEO succession gains urgency post Panditgate
By George Hay
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Royal Bank of Scotland’s succession planning is attaining greater urgency. After recent milestones, Chief Executive Stephen Hester is on track to achieve his five-year turnaround plan by its 2013 deadline. Meanwhile, Vikram Pandit’s unceremonious ouster from Citigroup on Oct. 16 shows the wisdom of quitting while ahead. RBS’s board should put two and two together and prepare for life after Hester.
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