Summit Notebook

Exclusive outtakes from industry leaders

Can a U.S. regulator simply talk banks into lending? FDIC’s Bair is trying

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When a regulator talks, do banks listen?

FINANCE-SUMMIT/BAIRBanks are returning to profitability after the financial crisis and the head of the Federal Deposit Insurance Corp is trying to nudge them into lending again.

“You can’t force them to lend,” FDIC chairman Sheila Bair says. “But I think jawboning helps.”

The U.S. banking industry reaped big profits in 2010 as the financial crisis faded further into the distance.

If all the regulator can do is try to talk them into increasing lending, why should banks listen?

With Asia’s growth potential…who needs CDO-squareds?

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Chat among markets in the U.S. and Europe is that if the authorities clamp down on banks too hard, they’ll simply up sticks and move more of their business over to Asia.

This conjures up an image that markets in the Ealynch3.jpgst are set to become a haven for some of the now frowned-upon practices that were seen in the build-up to the financial crisis such as slicing, dicing, and re-slicing of subprime debt.

from Blogs Dashboard:

David and Goliath had an easier time of it in the comparison stakes

By Huw Jones

The planned merger of Deutsche Boerse and NYSE Euronext will create the world's biggest bourse with 90 percent of on-exchange traded derivatives in Europe.
It has certainly focused minds and boosted CEO airmiles.
Speakers at the Reuters Future Face of Finance Summit were upbeat about their chances of winning a slice of this market which shows more promise for the bottom line than share trading, where competition is as ferocious as margins are thin.
Chi-X Europe, busy finalising its merger with BATS, took time out to explain how it too is targetting derivatives -- believing that a heady brew of shares, futures, options and ETFs on one platform will turn trading heads their way.
Last week saw the London Stock Exchange unveiling plans to turn its Turquoise pan-European platform into a derivatives winner too. And LCH.Clearnet, the clearing house, also sees
derivatives as the future.

The only way is up, it seems.
"The important thing in these markets is it's not about first mover advantge," is how Chi-X Europe CEO Alasdair Haynes bravely puts it.
LCH must also be hoping that is true -- it wants to clear credit default swap trades, a niche ICE has largely to itself in Europe so far.
And the clearer's CEO Roger Liddell hopes there will be an opportunity to clear derivatives linked to the STOXX indices --which are currently cleared and partly owned by Deutsche Boerse's Eurex.
So all well and good.
If you have a killer contract everyone wants to trade, that is.
Deutsche Boerse's Eurex was able to bulk up its derivatives volume in the Bund contract. Euronext's LIFFE has short term interst rate derivatives in the bag for now.
On-exchange derivatives contracts are proprietary, unlike shares which have no patent and can be traded by any platform.
Past efforts to create new derivatives contracts have often run into the sand as turnover failed to materialise.
It may be a case on being able to bring a horse to a new derivatives platform but it will be harder to persuade it to drink unless the liquidity is there.
So far, nobody has a compelling answer to that dilemma.
Huw Jones, Reuters London

from Newsmaker:

Ask your questions here

We are less than 24 hours away from the Thomson Reuters Newsmaker event with Alcoa CEO Klaus Kleinfeld and McKinsey & Co. CEO Dominic Barton, and there's still time to post your questions.

The live interview with them will take place tomorrow, March 1, from 8:30 a.m. to 9:30 a.m. The theme of the interview is "Thriving in the New Global Economy." Topics will include:

from Newsmaker:

Barton and Kleinfeld debate at Davos

Thomson Reuters March 1 Newsmaker guests Dominic Barton and Klaus Kleinfeld shared the stage at Davos this year with Fareed Zakaria, Jamie Dimon, Eckhard Cordes and Maurice Lévy. The Davos panel, titled  "The Next Shock: Are We Better Prepared?" centered around Jamie Dimon's vigorous defense of the banking industry. Although a bit overlooked in the coverage of the event, both Barton and Kleinfeld spoke about their predictions for the global economy. Watch this video to see why Barton is concerned that a bubble is developing in emerging markets, thanks to their urbanization push, and watch Kleinfeld explain why the health care industry should be viewed as a "job engine."

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from Newsmaker:

Meet Klaus Kleinfeld

GERMANY/ On March 1, Alcoa CEO Klaus Kleinfeld sits down with Global Editor-at-large Chrystia Freeland as part of our Thomson Reuters Newsmaker event "Thriving in the New Global Economy."

WHO IS KLAUS KLEINFELD?
Kleinfeld, 53, was born in Bremen, Germany. He studied at the University of Goettingen, where he earned a master’s degree in business administration, and the University of Wuerzburg, where he gained a PhD in strategic management.

from Newsmaker:

Dominic Barton on China and inflation

Dominic Barton of McKinsey & Co. stopped by the set of Chrystia's Davos TV show in late January to discuss the global economy along with Richard Haass of the Council on Foreign Relations and Bob Shiller of Yale University. Hear why Barton's worried about inflation in emerging markets, why the U.S. should be pitching China's sovereign wealth fund on infrastructure projects in America and where is the "Florida of China":

from Newsmaker:

Is the U.S. facing a productivity crisis?

Mercedes2.jpgGenerations of Americans have clocked in to work each morning confident that their daily toils would afford them a better standard of living than their parents. But that central promise of the American dream may now be under threat.

According to a productivity and competitiveness report from the consulting firm McKinsey & Co., the U.S. economy requires dramatic productivity gains to ensure that future workers will benefit from economic growth. How to achieve these gains will be the focus of a discussion between Reuters global editor-at-large Chrystia Freeland and McKinsey’s global managing director Dominic Barton for a Thomson Reuters Newsmaker event on March 1, "Thriving in the New Global Economy."

from Newsmaker:

Thriving in the new global economy

DAVOS/

Our next Thomson Reuters Newsmaker -- "Thriving in the New Global Economy" -- with Dominic Barton of McKinsey is coming up on Tuesday, March 1.

Reuters Global Editor-at-Large Chrystia Freeland will conduct a live interview with the Global Managing Director of consulting company McKinsey & Co.

That’s rich. I meant the wine.

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Jeffrey Rubin

What do gold and wine have in common?

Price.

Well, too high of a high price, according to Jeffrey Rubin, director of research at Birinyi Associates, the stock market research and money management firm.

Rubin told the Reuters Investment Outlook Summit on Tuesday that he thought gold prices were “certainly a little frothy” at current levels and that he would rather be a buyer of the gold miners such as Newmont Mining Corp, Barrick Gold Corp, or Freeport-McMoRan Copper and Gold Inc. Gold hit an all-time high  above $1,250 an ounce on Tuesday as investors piled in due to fears that European credit contagion could lead to a double-dip recession.

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