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Sep 12, 2013

Analysis: Five years after Lehman, risk moves into the shadows

NEW YORK (Reuters) – Just days after UBS AG (UBSN.VX: Quote, Profile, Research, Stock Buzz) said that it would gut its fixed-income trading business last October, three of the Swiss bank’s senior executives left to launch a firm to go where big banks won’t anymore.

The fund, called Melody Capital Partners, is raising about $750 million to make loans or buy debt of companies and other entities with bad credit or no credit rating. Often the borrowers are in financial distress and the financing arrangements tend to be unusual in nature.

Sep 12, 2013

Five years after Lehman, risk moves into the shadows

NEW YORK, Sept 12 (Reuters) – Just days after UBS AG
said that it would gut its fixed-income trading
business last October, three of the Swiss bank’s senior
executives left to launch a firm to go where big banks won’t
anymore.

The fund, called Melody Capital Partners, is raising about
$750 million to make loans or buy debt of companies and other
entities with bad credit or no credit rating. Often the
borrowers are in financial distress and the financing
arrangements tend to be unusual in nature.

Aug 26, 2013

Goldman losses from options glitch in tens of millions: source

By Doris Frankel and Lauren Tara LaCapra

(Reuters) – Goldman Sachs Group Inc (GS.N: Quote, Profile, Research, Stock Buzz) lost tens of millions of dollars after a computer glitch led to a flood of erroneous options trades last week, a source close to the matter said on Monday.

Last Tuesday, an upgrade of Goldman’s internal system affected options on stocks and some exchange-traded funds with symbols beginning with the letters H through L, leading to trades vastly out of line with market prices.

Aug 26, 2013

Insight: Trades from 1990s come back to haunt Wall Street

By Lauren Tara LaCapra and Dan Wilchins

(Reuters) – In the 1990s, U.S. banks came up with a clever idea: using life insurance to bet that their employees would eventually die. Now those wagers are coming back to haunt Wall Street banks for reasons that have little to do with their employees’ longevity.

For more than a decade, the lenders purchased life insurance policies, known as “bank-owned life insurance,” on employees in bulk. These policies were unusual: banks chose how the premium would be invested; and were on the hook for investment losses or gains over time, unlike typical policies where the insurer invests the premium.

Aug 26, 2013

Trades from 1990s come back to haunt Wall Street

Aug 26 (Reuters) – In the 1990s, U.S. banks came up with a
clever idea: using life insurance to bet that their employees
would eventually die. Now those wagers are coming back to haunt
Wall Street banks for reasons that have little to do with their
employees’ longevity.

For more than a decade, the lenders purchased life insurance
policies, known as “bank-owned life insurance,” on employees in
bulk. These policies were unusual: banks chose how the premium
would be invested; and were on the hook for investment losses or
gains over time, unlike typical policies where the insurer
invests the premium.

Aug 21, 2013

Goldman assessing fallout from options trading glitch

NEW YORK/CHICAGO (Reuters) – Goldman Sachs Group Inc is assessing the financial damage caused by a trading glitch that led to a flood of erroneous options trades, as U.S. regulators began looking into what caused the problem.

On Tuesday morning, an upgrade of an internal Goldman system affected options on stocks and some exchange-traded funds with listing symbols beginning with the letters H through L.

Aug 16, 2013

Analysis: Wall Street clashes with regulators over repo market reforms

WASHINGTON/NEW YORK (Reuters) – Wall Street banks are arguing that a proposal from U.S. regulators intended to rein in risk taking could severely hurt the $7 trillion repurchase market, a critical source of short-term loans in the financial system.

A new rule, known as the supplemental leverage ratio, is being proposed by the Federal Reserve, but also globally, as regulators seek to control a market they see as unstable enough to cause a new financial crisis.

Aug 16, 2013

Wall St clashes with regulators over repo market reforms

WASHINGTON/NEW YORK, Aug 16 (Reuters) – Wall Street banks
are arguing that a proposal from U.S. regulators intended to
rein in risk taking could severely hurt the $7 trillion
repurchase market, a critical source of short-term loans in the
financial system.

A new rule, known as the supplemental leverage ratio, is
being proposed by the Federal Reserve, but also globally, as
regulators seek to control a market they see as unstable enough
to cause a new financial crisis.

Aug 6, 2013

Morgan Stanley may sell minority stake in commodities unit

NEW YORK, Aug 6 (Reuters) – Morgan Stanley is
exploring various options for its multibillion dollar
commodities business, with the sale of a minority stake being
one possibility, three sources familiar with the situation said
on Monday.

The business, which includes three U.S. power plants, a 49
percent stake in a tanker fleet and a pipeline and logistics
firm, has been shopped for more than a year. But the bank is not
in any hurry to sell a stake at any price and is not close to a
deal, the sources said.

Jul 31, 2013

Under fire, Goldman offers way round warehouse lines

NEW YORK, July 31 (Reuters) – Goldman Sachs responded
to mounting political pressure and regulatory scrutiny of its
Metro International metals business, by offering customers
immediate access to aluminum stored in its warehouses on
Wednesday.

In a statement outlining the bank’s proposal to cut waiting
times at all London Metal Exchange warehouses, Goldman Sachs
said it would make aluminum immediately available to major
consumers.