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Headline News, Friday, July 3, 2009
July 2: Humor - US Consumer Financial Protection Agency to Limit Sports Betting, Visits to Las Vegas by US Citizens and Green Card Holders
Administration sources revealed that the Consumer Financial Protection Agency would be empowered to regulate the full range of financial transactions by U.S. citizens and green card holders. At the top of the Administration’s priorities is a complete prohibition on travel to the state of Nevada by U.S. citizens who are not college graduates. Among college graduates, those with non-quantitative courses of study would also be prevented from entering the state of Nevada.
July 2: SoberLook - Let Creditors Eat Equity and Be Thankful for It
Hah? Debt has been around too long? What happened to the old notion that when you borrow money, you have to pay it back? If you can’t pay it back, you need to sell assets to pay back as much as possible.
July 2: Operational Risk - SEC Proposes Measures to Improve Corporate Governance and Enhance Investor Confidence
The Securities and Exchange Commission yesterday voted on three measures that are intended to better inform and empower investors to improve corporate governance and help restore investor confidence.
July 2: Market Risk - US Options Exchanges Battle for Liquidity as Pennies, Internalization and Regulatory Environment Shift Landscape
According to the first research study in an ongoing series on US options market structure published by TABB Group, “US Options Market Structure: The Shifting Exchange Landscape,” US options exchanges are mired in a battle for liquidity, using constantly fluctuating trading rules, market models and fee initiatives to attract critical order flow from market makers, sell-side trading desks and buy-side traders.
July 1: Market Risk - Monthly Economic and Fed Policy Report
View summary of key economic indicators. See detail behind Real Growth Index (RGI) and 'E/M' Index (used in daily Fed Funds Report). RGI, designed to proxy bond market perceptions, updates monthly (vs. quarterly GDP), identifies recessions precisely, and correlates with other indices (e.g., ISM). Multivariate model projects RGI 3 months out. 'E/M' section reveals conditions empirically consistent with FOMC rate moves. Charts show 'E/M' history against Fed moves; RGI, money, and prices since 1960; and RGI Index relative to model forecast.
July 1: SoberLook - US Banks Will Roll the Wall of Maturing Debt
Barclays Capital has analyzed financial company debt among United States institutions coming due over the next decade. During the rest of the year, for example, roughly $172 billion in debt will mature; in 2010, an additional $245 billion comes due.
July 1: Credit Risk - Third Consecutive Improvement in Global Credit Quality in June
Troubled companies decline to 16.4% of global firms.
July 1: Regulatory Risk - FSA Chairman Tells Bankers Radical Changes in Regulation Essential
Lord Turner, chairman of the Financial Services Authority (FSA), said yesterday that excellent supervision is a necessary but not sufficient condition for financial stability, warning that unless rules are changed radically, future crises will not be avoided.
July 1: Country Risk - Regimes for Handling UK Bank Failures, Redrawing the Banking Social Contract
In the third of a series of recent speeches on reshaping the ‘social contract’ for banking in the light of the financial crisis, Paul Tucker – Deputy Governor for Financial Stability – discussed yesterday at the British Bankers’ Association’s Annual International Conference the need for banks to run themselves in a way that facilitates the orderly management of crises, including through deposit insurance and the resolution of distressed firms.
July 1: Regulatory Risk - US Agencies Seek Comment on Proposed Interagency Guidance on Funding and Liquidity Risk Management
The federal bank, thrift, and credit union regulatory agencies are seeking comment on the proposed Interagency Guidance on Funding and Liquidity Risk Management.
July 1: Reputation Risk - Only One-Quarter of Americans Say Banks are Honest and Trustworthy
Over the past few months, Americans have watched as financial institutions have received government bailouts, or been shut down and have had to close their doors due to the economic crisis. It is perhaps not surprising then that almost three in five Americans (58%) say they do not consider any of nine financial institutions and insurance companies to be honest and trustworthy; that is, they would not believe a statement by someone who works for one of these companies.
July 1: Operational Risk - Update on Keydata Investment Services Ltd
Yesterday PricewaterhouseCooper (PwC) announced that as a result of concerns around some Keydata products it has suspended certain interest payments and certain redemption rights.
June 30: DvD Insights - The SEC’s Money Market Fund Proposals and “Breaking the Buck”
Last week the Securities and Exchange Commission proposed a series of regulations designed to enhance the ability of money market funds to avoid the kind of runs that we saw in September 2008 after the bankruptcy of Lehman Brothers. The proposals miss one key point—runs are triggered when the true net asset value of the fund is less than the magic “buck” of $1.00.
June 30: SoberLook - When Traveling to Switzerland, Make Sure to Bring 135 BILLION Dollars Worth of Bonds
Italian finance police on Friday reportedly arrested two men crossing into Switzerland carrying what looks to be around 135 billion dollars worth of US government bonds, potentially the biggest smuggling attempt in history. The Guardia di Finanza was not able to confirm if the bonds were genuine.
June 30: BIS Annual Report - Rescue, Recovery, Reform – the Narrow Path Ahead
In its 79th Annual Report the Bank for International Settlements (BIS) looks at the narrow path ahead leading out of the financial crisis. The Report underlines the need to focus clearly on the medium term and on sustainability when designing both macroeconomic and financial policy responses.
June 30: Industry Risk - Accounting Profession Holds Steady Despite Turbulent Economy
As many white-collar professions lose stability amid the economic crisis, one profession is actually weathering the storm. The average salary of members participating in the Institute of Management Accountants (IMA) 20th Annual Salary Survey held steady compared to last year.
June 30: Operational Risk - IOSCO Consults on Disclosure Requirements for Public Offerings of ABS
The International Organization of Securities Commissions’ (IOSCO) Technical Committee has published a consultation paper on Disclosure Principles for Public Offerings and Listings of Asset-Backed Securities (ABS Disclosure Principles). The Technical Committee has developed these ABS Disclosure Principles to provide guidance to securities regulators who are developing or reviewing their regulatory disclosure regimes for public offerings and listings of asset-backed securities (ABS).
June 30: Energy Risk - ETRM? Um, Yeah … It's Complicated
The phrase "Energy Trading and Risk Management" (ETRM) would seem pretty self explanatory. It means, well, the trading of energy and managing the risk associated with the trade or trades. Right? Well, yeah, but not really.
June 30: Industry Risk - Transparency is the New Gold Standard, US Wealth Managers Must Redefine Role to Regain Trust in Current Environment
Private banks and wealth managers have seen their profits plummet in the wake of unprecedented financial turmoil, investment scandals and the decline in world wealth. Damage has been done to the critical element of trust at the heart of the relationship between high net worth clients and their wealth managers. With increasing demand for transparency around all aspects of the investment process and in performance, a growing regulatory compliance burden and the need to control costs, wealth managers face enormous challenges as they try to redefine their role and regain "trusted advisor" status.
June 30: Energy Risk - Get Smart
Tell Ken Copp that the U.S. electric grid needs to "get smart," and he'll politely set you straight. Copp, the strategic technical advisor for American Transmission Company (ATC), is but one of an increasingly vocal number of power engineers and transmission and distribution utility owners who beg to differ with the popular opinion that our electric grid is somehow "dumb," or operating "without a brain."
June 29: Operational Risk - UK Short Selling Disclosure Regime Extended
The Financial Services Authority (FSA) has extended, without a time limit, the current disclosure regime for significant net short positions in the stocks of UK financial sector companies due to expire on 30 June.
June 29: SoberLook - The Holes of the BIS Rule Book
Driven by academics, the organization strives to bring a near scientific sophistication to bank capital rules. Their big achievement was to assign capital requirement for "trading book" assets (as opposed to banking books). The "banking book" was however another matter.
June 29: Market Risk - Chart of the Day
Many investors continue to look to the early 1930s for some insight into the current economic/stock market environment.
June 29: Economic Risk - Consumers Are Saving More and Spending and Borrowing Less
Americans are continuing to tighten their belts with almost two-thirds (63%) of Americans saying they are spending less overall and two-thirds (64%) saying they are less likely to take out a loan. They are also weaning themselves from plastic with one-third (33%) saying they are using their credit card less often than before.
June 29: Energy Risk - Car Troubles
America is having car troubles. The fall of General Motors and Chrysler is causing domestic manufacturers to re-think their mission and to develop the next generation of transport. The movement now appears to be headed to a greener future and perhaps with those vehicles that run mostly on electricity.
June 29: Tutorial – Red Chip
A red chip is stock of a company incorporated and traded on the Hong Kong Stock Exchange and controlled by mainland Chinese shareholders.
June 26: DvD Insights - The US Consumer Financial Protection Agency, Do We Need Government to Save Us from Ourselves?
A recent story on Reuters outlined upcoming remarks by Elizabeth Warren, chairman of the Congressional Oversight Panel of the Troubled Asset Relief Program, urging creation of a Consumer Financial Protection Agency to protect borrowers from wicked and evil bankers bearing loans that the consumers can’t possibly repay. Is such an agency necessary? We look at both sides of the story.
June 26: Operational Risk - Executive Outlook Finds Need for CEOs and Board Members Adept at Risk Management and Revenue Growth
The demand is notably increasing for CEOs, senior executives and Board Members who skillfully balance risk management and meet revenue targets, according to the quarterly Boyden Executive Outlook.
June 26: Industry Risk - Insurance Supervisors Strengthen International Cooperation Efforts
IAIS yesterday took an important step in strengthening cooperation among insurance supervisors worldwide with the first three insurance supervisory authorities becoming signatories to the IAIS Multilateral Memorandum of Understanding (MMoU).
June 26: Industry Risk - Reduction in Global IT Spending Increases Risk to US IT Distributors' Credit Profiles
Ongoing reduction in global IT spending will further deteriorate operating profiles for U.S. IT distributors and could lead to weakened credit profiles. According to a new special report issued, Fitch believes that while the rate of decline could moderate from levels the industry experienced in first quarter 2009 (1Q09), double-digit year-over-year sales declines will continue into the second half of 2009.
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