NEW YORK, Nov 19 (Reuters) – As the United States threatened
to default on its debt last month, major U.S. banks set up war
rooms, spent many millions of dollars on contingency planning
and, in some cases, even prepared to underwrite federal
In a series of interviews with top bank executives, new
details emerged about the extent of the contingency planning
that was undertaken before and during the 16-day government
shutdown and as a potential default loomed.
NEW YORK, Nov 12 (Reuters) – Goldman Sachs Group Inc
Chief Executive Lloyd Blankfein said on Tuesday that he regrets
collateralized debt obligation trades the Wall Street bank made
in the run-up to the financial crisis that later caused a
firestorm of public criticism.
Collateralized debt obligations (CDOs) are pools of bonds
that are bundled, sliced up according to credit risk, and sold
to investors. As the mortgage market heated up leading into
2007, investment banks began selling more exotic varieties
linked to mortgages.
NEW YORK (Reuters) – Wall Street’s biggest risk takers – its bond traders – will probably see their bonuses drop this year, while people in safer roles, such as money managers, will likely get a boost, according to a forecast by compensation consulting firm Johnson Associates.
Overall, it said, individual Wall Street bonuses may rise 5 to 10 percent, on average, compared with last year, as the industry continues its halting recovery from the 2007-2009 financial crisis. Top executives of Wall Street firms will see bonuses rise by as much as 5 percent, Johnson Associates said.
NEW YORK, Oct 28 (Reuters) – Morgan Stanley is now
seen in derivatives markets as less likely to default on its
debt than Goldman Sachs, a reversal of long-term price
trends that signals investors’ confidence in the bank’s efforts
to make itself safer.
The switch started on Oct. 18 when Morgan Stanley beat
earnings expectations, two days after Goldman Sachs posted
disappointing results. While Morgan Stanley showed signs of
progress in wealth management – where it has made a big bet for
future growth and stability – Goldman reported unexpectedly weak
revenue in trading, a volatile business from which it gets the
bulk of its income.
Oct 24 (Reuters) – Investment bank and asset manager Lazard
Ltd reported better-than-expected quarterly earnings on
Thursday, as stock-market gains boosted revenue in its asset
management unit, and its cost-cutting program began to bear
Lazard is on track to meet operating goals laid out last
year, and is now investing some of its $160 million in annual
savings back into business growth, Chief Executive Kenneth
Jacobs said in an interview.
NEW YORK, Oct 21 (Reuters) – Goldman Sachs Group Inc
Vice Chairman J. Michael Evans will retire from his position at
year-end, the bank said on Monday, eliminating a top rival of
Chief Operating Officer Gary Cohn in the race to become the next
head of Wall Street’s biggest investment bank.
Evans, 56, is one of the most senior executives at Goldman
and has led a number of big divisions. He is global head of
growth markets, and played a central role in Goldman’s expansion
into Asia as well as its reputational rehabilitation after the
NEW YORK (Reuters) – Goldman Sachs Group Inc (GS.N: Quote, Profile, Research, Stock Buzz) Vice Chairman J. Michael Evans will retire from his position at year-end and become a senior director, according to an internal memo viewed by Reuters.
Evans, one of the most senior executives at Wall Street’s biggest investment bank, and global head of growth markets, played a central role in Goldman’s expansion into Asia. He was one of several executives that had been tipped to replace current Chief Executive Lloyd Blankfein.
NEW YORK (Reuters) – A few months ago, a group of Wall Street banks fashioned a risk-manager’s worst nightmare to determine how they would survive. Luckily, it was all pretend.
In a staged simulation called Quantum Dawn 2, bank executives in charge of operations, technology and crisis planning were tasked with detecting how a massive cyber attack was unfolding in the markets – but each one only got to see a tiny red flag waving in a sea of information.
By Lauren Tara LaCapra
(Reuters) – Morgan Stanley posted a higher-than-expected quarterly profit on Friday as stock trading revenue jumped 31 percent, a surprisingly strong performance in a quarter when most rivals posted smaller gains or even declines in that business.
The rise in stock trading revenue offset most of the decline in fixed-income, currency, and commodity trading, where revenue fell 44 percent. Morgan Stanley has had difficulty with fixed-income trading for years, but in the third quarter weak market conditions also shook most of the bank’s competitors.
Oct 17 (Reuters) – Goldman Sachs Group Inc slashed
employee compensation costs by 35 percent in the third quarter
as bond-trading revenue plunged, an unusual step that signals
the bank’s concern about performance for the rest of the year.
Revenue from trading fixed-income, currency and commodity
products for clients, one of the bank’s biggest businesses,
tumbled 44 percent in the quarter, Goldman reported on Thursday.
Excluding an accounting adjustment, the drop was 47 percent, a
much sharper decline than those posted by rivals. The bank’s
shares were down 2.4 percent in late-morning trading to $158.43.