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Dec 22, 2010
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Endangered financial species: U.S. community banks

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

NEW YORK — It’s the time of year when families gather to watch Jimmy Stewart play George Bailey, the small-town banker who with a little angelic intervention extends credit to his neighbors in “It’s a Wonderful Life.” Yet though Bailey remains emblematic of a benign banking system, most Americans probably don’t realize he’s the most endangered species in finance.

Dec 17, 2010
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Buyout bigwigs get one-upped by community banker

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

It’s not every day that the barons of the buyout industry find themselves on the shorter end of a sweet deal. But that’s arguably the case in the turnaround of BankUnited, a relatively small Florida bank that’s about to return to the public markets. John Kanas, the seasoned Long Island banker who led the deal and runs the bank, is poised to skim off nearly $100 million of the profits his private equity partners will make.

Dec 14, 2010
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Goldman has chance to top off Wall St governance

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

Wall Street rivals usually follow where Goldman Sachs leads. It is unlikely to be any different when the findings of Goldman’s Business Standards Committee become public early next year. But on one important point Goldman lags some big competitors — the separation of the chief executive and chairman jobs. Now it has a chance to catch up.

Dec 13, 2010
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Energy bankers may be 2011′s hottest commodity

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

NEW YORK — Bankers in the oil and gas business know a thing or two about the laws of supply and demand. But they’re not accustomed to being the commodity in question. Some of the world’s cities may be overrun with financial types, but with energy sector activity rising they’re scarce in swampy, sprawling Houston. Bankers there may benefit accordingly in 2011.

Dec 3, 2010
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BarCap may become CoCo bonus pioneer

Investment bankers don’t come up with a lot of financial innovations that today’s regulators and politicians like. But Barclays Capital is working on one that just might please everyone. The investment banking arm of Barclays, the London-based retail banking behemoth, is leaning towards issuing a healthy slug of contingent capital securities, or CoCos, to employees as part of their 2010 deferred compensation, according to people familiar with the firm’s plans.

These securities are bank bonds that turn into equity when things go awry, for instance when losses mount and the bank’s equity capital ratios fall, thereby boosting capital. So, in essence, adding CoCos to the bonus mix would be a novel way for BarCap to force bankers to contribute some of their loot to their employer’s capital cushion, thereby helping to minimize political opprobrium over pay.

Nov 23, 2010
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“Too big to fail” alive and well in U.S. banking

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

What happened to ending “too big to fail”? That was one objective of the U.S. financial reform bill passed earlier this year. Central to the Dodd-Frank Act were rules designed to make big banks less exciting and safer, along with the creation of an authority designed to smoothly wind down even the largest institutions without massively disrupting the financial system.

Nov 23, 2010
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Investors rightly bypassing C3POs for IPOs

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

Conventional wisdom dictates that investors have poor memories: they can be duped every few years with variations on the same financial trick. Refreshingly, the U.S. market for initial public offerings may be proving an exception. In what’s shaping up as the year of the see-through public offering — or C3PO for short — a record number of companies look set to abort market debuts as investors wise up.

Nov 18, 2010
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Fed misses a transparency trick with stress tests

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

The newly powerful Federal Reserve may have missed a trick. The U.S. central bank, charged under the Dodd-Frank reform bill with broad oversight of the banking system, is asking the 19 biggest American financial institutions to submit to a series of stress tests. That’s a good thing. The trouble is the regulator plans to keep the results and the criteria used in the tests private.

Nov 12, 2010
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Print is dead — long live old media

The electronic word represents the financial future of news, whether delivered by email, iPads or whatever platform comes next. But in terms of galvanizing public opinion and setting the broader agenda, nothing yet is replacing the power of old media, spearheaded by the printed word. That’s why deals like the merger of The Daily Beast, a cutting edge website, with old-school magazine Newsweek shouldn’t be dismissed as the work of old fogeys nostalgic for newsprint.

Observers of that deal, announced on Friday, could be forgiven for that misconception. After all, Sidney Harman — the hi-fi magnate who paid $1 for Newsweek — is 92. The Daily Beast’s owner, Barry Diller, was born during World War Two and the site’s founder and editor-in-chief, 56-year-old Tina Brown, long ago reached the pinnacles of U.S. print journalism, heading Vanity Fair and The New Yorker.

Nov 10, 2010
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When small-time banking pays off big-time

Who wants to be an American community banker? It doesn’t sound like an especially appealing profession these days. After all, scores of local lenders are failing every week — more than 143 so far this year including four last week. Regulatory red tape is on the rise. And all those “too big to fail” institutions bailed out by the government have gotten their mojo back and are gunning for small-bank customers and depositors.

But the success of one executive, John Kanas, may be sufficient to make small-time banking as attractive as the hedge fund business. Kanas is the chief executive, chairman and president of BankUnited, the 70-branch Miami Lakes, Florida, financial institution that he — along with a Who’s Who of private equity hotshots — bought on the cheap from the Federal Deposit Insurance Corp last year.

    • About Rob

      "Rob Cox helped establish Breakingviews in 2000 in London. From 2004 he spearheaded the firm's expansion in the United States and edited its American edition, including the daily Breakingviews columns in the New York Times and Wall Street Journal. Rob has worked as a financial journalist in London, Milan, New York, Washington, Chicago and Tokyo. Rob graduated from Columbia University’s Journalism School and the University of Vermont. Follow Rob on Twitter @rob1cox"
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