Daily Content For Financial Risk Managers http://www.riskcenter.com/ daily 1 2000-01-01T12:00+00:00 While the economy is slowly recovering, a recent analysis by Hewitt Associates, a global human resources consulting and outsourcing company, shows employee engagement and morale in the workplace are not. Almost half of organizations around the world saw a significant drop in employee engagement levels at the end of the June 2010 quarter—the largest decline Hewitt has observed since it began conducting employee engagement research 15 years ago. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=20284 2010-07-30T08:00+00:00 MacKenzie Lucas Compensation for executives at large and midsize U.S. companies is expected to rebound modestly this year following two consecutive years of pay declines. Additionally, most companies are planning to fine-tune their executive pay programs to further tighten the link between pay and performance as well as address a growing concern over executive retention. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=20283 2010-07-30T08:00+00:00 Ed Emerman The Securities and Exchange Commission yesterday charged Citigroup Inc. with misleading investors about the company's exposure to subprime mortgage-related assets. The SEC also charged one current and one former executive for their roles in causing Citigroup to make the misleading statements in an SEC filing. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=20282 2010-07-30T08:00+00:00 RiskCenter Staff Freddie Mac yesterday released the results of its Primary Mortgage Market Survey (PMMS), with the 30-year and 15-year fixed-rate mortgages reaching record lows for this survey. (The 30-year fixed-rate survey began in 1971, and the 15-year began in 1991.) Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=20281 2010-07-30T08:00+00:00 Eillen Fitspatrick The Committee of European Banking Supervisors (CEBS) today publishes its implementation guidelines on Article 106(2) (c) and (d) of Directive 2006/48/EC (Capital Requirements Directive) as amended by Directive 2009/111/EC. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=20280 2010-07-29T08:00+00:00 Efstathia Bouli Equilar, a compensation research firm, reported that in 2009 the median compensation of CEOs for the top 200 companies declined 13 percent from the previous year to $7.7 million. The decline was attributed to stock and option awards losing value because of the 2009 stock market plunge. Yet an SNL Financial study of utility CEO compensation in 2009 reveals that the top 25 utility CEOs saw their executive compensation increase by 39 percent to 123 percent and 49 of the top 50 showed rising packages. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=20279 2010-07-29T08:00+00:00 Gary M. Stern The greatest source of weakness seemed to emanate from real estate and construction. On the housing side, it was reported that “nearly all Districts reported sluggish housing markets” although this was in large part due to the expiration of the homebuyer tax credit April 30. The picture was bleaker for the commercial and industrial real estate side of the economy, where markets “continued to struggle in all 12 Fed Districts” and did not reflect any payback from some earlier strength. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=20278 2010-07-29T08:00+00:00 RBC Economic Research The report addresses structural issues in international banking from three angles: a historical perspective, what the drivers have been, and what might happen next. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=20277 2010-07-29T08:00+00:00 BIS Staff The macro-economic expectations across emerging markets remain favorable for corporate issuers, as discussed in Fitch Ratings' quarterly Emerging Markets Newsletter. Favorable expectations for EM corporates could be tempered by the evolution of commodity prices as well as growth rates in the developed markets. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=20276 2010-07-29T08:00+00:00 Brian Bertsch Securities and Exchange Commission Chairman Mary L. Schapiro yesterday announced that the agency is making it easier for the public to provide comments as the agency sets out to make rules required under the Dodd-Frank Wall Street Reform and Consumer Protection Act. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=20275 2010-07-28T08:00+00:00 RiskCenter Staff In this issue, we return to the zombie dance party, which has actually grown rather dramatically in size since last we checked in. Some of the big American zombie gals -- Citigroup, JPMorgan Chase and Bank of America in particular -- are seeing positive results from Old Uncle Ben's Net Interest Margin (NIM) drip. But like the Wesley Snipes character in the film "Blade," if the zombies don't continue taking the antidote, they slip back into full, money eating zombie mode once again. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=20274 2010-07-28T08:00+00:00 IRA Staff The Conference Board's measure of U.S. consumer confidence followed June's sharp decline with a further easing in July, falling to 50.4 from the prior month's 54.3 (revised from 52.9). Market expectations were for a slightly smaller drop in the index to 51. The labour market differential (those saying jobs are “plentiful” minus respondents saying jobs are “hard to get”) deteriorated to -41.5 from the prior month's -39.2 reading (revised from -40.5 previously), its lowest reading since March. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=20273 2010-07-28T08:00+00:00 RBC Economic Research The Securities and Exchange Commission yesterday published a request for public comment to inform its study of the obligations and standards of care of broker-dealers and investment advisers providing personalized investment advice about securities to retail investors. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=20272 2010-07-28T08:00+00:00 RiskCenter Staff CoStar Commercial Repeat Sales Index (CCRSI), a measure that is intended to provide consistent and timely information to help answer some of the fundamental economic questions regarding the commercial real estate (CRE) industry, including, "Are prices climbing or falling?" and "On a month-to-month basis are property values going up or down?" Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=20271 2010-07-28T08:00+00:00 RiskCenter Staff A new study that shows a sizeable reduction in the annual CO2 emissions associated with information technology (IT) equipment is clear evidence of the IT industry's commitment to a cleaner and greener world. As the number of networked devices continues to increase the energy demands on networks and networking equipment will increase in step. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=20270 2010-07-28T08:00+00:00 Steven Ostrowski The Group of Governors and Heads of Supervision, the oversight body of the Basel Committee on Banking Supervision, met on 26 July 2010 to review the Basel Committee's capital and liquidity reform package. Governors and Heads of Supervision are deeply committed to increase the quality, quantity, and international consistency of capital, to strengthen liquidity standards, to discourage excessive leverage and risk taking, and reduce procyclicality. Governors and Heads of Supervision reached broad agreement on the overall design of the capital and liquidity reform package. In particular, this includes the definition of capital, the treatment of counterparty credit risk, the leverage ratio, and the global liquidity standard. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=20269 2010-07-27T08:00+00:00 BIS Staff The increasingly complex options markets is resulting in growing demand for tools and systems that can help make options trading more efficient, especially as traders are continuing to adopt sophisticated trading strategies, says TABB Group in a new annual research study, “US Electronic Options Trading 2010: Algorithms, DMA and Crossing Networks.” The proportion of order flow moving through low-touch channels is projected to rise to 62% by 2011, as options traders turn to electronic trading systems to manage order flow. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=20268 2010-07-27T08:00+00:00 Martin Rabkin The Chancellor set out plans to overhaul the system of Financial Regulation giving the Bank of England powers over macro prudential regulation through a newly established Financial Policy Committee (FPC), which will be established on an interim basis from Autumn 2010. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=20267 2010-07-27T08:00+00:00 RiskCenter Staff Don't confuse the BP oil spill with the future of natural gas. The fuel is expected to be a global contender when it comes to reducing greenhouse gas emissions from power plants through 2050. That's the conclusion of an MIT study group, which says that natural gas will erode coal's market share over time and particularly after domestic and international carbon controls are put in place. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=20266 2010-07-27T08:00+00:00 Ken Silverstein New home sales in June jumped 23.6% to 330,000 units from May's downwardly revised record low of 267,000 units (initially reported 300,000 units). The rise beat market expectations for an increase to 312,000 units. Months' supply of unsold new homes dropped to 7.6 in June from May's 9.6 (revised from 8.5), while the total number of new homes for sale dropped to 210,000 from 213,000 in May, the lowest level since September 1968. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=20265 2010-07-27T08:00+00:00 RBC Economic Research Further to its statements issued on 18 June, 7 July and 19 July 2010, CEBS today releases its summary report on the results of the EU-wide stress test exercise. CEBS was mandated by the ECOFIN to conduct, in cooperation with the European Central Bank (ECB), the European Commission and the EU national supervisory authorities, a second EU-wide stress testing exercise. The overall objective of the 2010 exercise is to provide policy information for assessing the resilience of the EU banking system to possible adverse economic developments and to asses the ability of banks in the exercise to absorb possible shocks on credit and market risks, including sovereign risks. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=20264 2010-07-26T08:00+00:00 CEBS Staff Last week, anyone with a TV set was able to watch the leadership of the Democratic Party celebrating what some call: “the most wide-ranging overhaul of U.S. financial regulations since the 1930's.” Everyone was applauding the President as he put pen to paper to bring into law a new era in consumer protection. As President Obama said: "The American people will never again be asked to foot the bill for Wall Street's mistakes. There will be no more taxpayer-funded bailouts. Period." Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=20263 2010-07-26T08:00+00:00 Shahin Shojai The UK banks are required to meet the FSA's interim capital regime introduced in November 2008. This requires them to be able to meet a severe stress over a forward looking period exceeding 4% Core Tier 1 at all times. The UK introduced a tougher definition of Core Tier 1, including the deduction of intangibles such as goodwill, in 2008 so Core Tier 1 ratios cannot be compared across countries. This takes the UK definition in the direction of current proposals from the Basel Committee (4% is double the existing Basel minimum). Present Core Tier 1 ratios are well in excess of this level. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=20262 2010-07-26T08:00+00:00 FSA Staff This week's projections for the 1 month Treasury bill rate (investment basis) show a decline in the 1 month bill rate, compared to last week's forecast, particularly in 2012-2013 when the decline was as much as 19 basis points. Thereafter the forecast for 1 month bill rates is 1 to 2 basis points lower than last week's forecast. The implied forecast this week shows steady rise in the 1 month bill rate to 4.511% in June 2020, 2 basis points lower than the highest level forecast last week. The 10 year U.S. Treasury yield is projected to rise steadily to reach 4.971% on June 30, 2020, up 1 basis point from last week. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=20261 2010-07-26T08:00+00:00 Donald R. van Deventer The Financial Services Authority (FSA) last week published its near final rules to strengthen the financial resilience of the credit union sector and reduce the number of credit union failures. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=20260 2010-07-26T08:00+00:00 FSA Staff Retail electricity competition has taken a drubbing. But information now out is suggesting that the concept is alive and well, and likely to gain momentum: More customers switched in the first quarter of this year from incumbent utilities to alternative suppliers that purport to deliver lower costs and better services. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=20259 2010-07-26T08:00+00:00 Ken Silverstein The Securities and Exchange Commission yesterday released a staff report recommending that life settlements be clearly defined as securities so that the investors in these transactions are protected under the federal securities laws. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=20258 2010-07-23T08:00+00:00 RiskCenter Staff Freddie Mac yesterday released the results of its Primary Mortgage Market Survey (PMMS), with the 30-year and 15-year fixed-rate mortgages reaching record lows for this survey. (The 30-year fixed-rate survey began in 1971, and the 15-year began in 1991.) Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=20257 2010-07-23T08:00+00:00 Eileen Fitzpatrick Polachi Inc. yesterday issued the results of their second annual VC survey, which polled venture capital executives throughout the United States. The survey revealed that 56% of venture capital executives - 98.1% who are Partners or Managing Partners - are more confident and optimistic about the industry today compared to a year ago when an overwhelming number of executives felt the industry was “broken.” Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=20256 2010-07-23T08:00+00:00 Jean Nickerson The Securities and Exchange Commission yesterday charged Dell Inc. with failing to disclose material information to investors and using fraudulent accounting to make it falsely appear that the company was consistently meeting Wall Street earnings targets and reducing its operating expenses. Click on headline to get more of the story on RiskCenter.com http://www.riskcenter.com/story.php?id=20255 2010-07-23T08:00+00:00 RiskCenter Staff