Financial Industry News

JPMorgan is set to form a securities joint venture in China with First Capital Securities, it has been widely reported.According to sources close to the deal, a memorandum of understanding has been signed by the two companies to set up the unit.Such a move would represent a further investment in China for JPMorgan, which is already involved in joint ventures in the futures market and fund management sector in the country.While this particular agreement is yet to be confirmed by the US bank,... more

 

The downfall of Lehman Brothers has been partly attributed to some of the company's top executives in a new report.A one-year investigation into the collapse of the bank by court-appointed examiner Anton Valukas has resulted in allegations that Lehman Brothers put out misleading financial statements with the express permission of senior members of staff.It is also alleged that executives including Dick Fuld, the firm's former chief executive officer, used an "accounting gimmick" to hide around... more

 

Morgan Stanley has announced the launch of new electronic trading platform MS PORT. According to the investment bank, MS PORT utilises more than 70 risk metrics to enable investors to implement trade instructions across multiple portfolios more effectively.By comparing market impact, volatility and assets, traders should be able to reduce costs, achieve better execution and manage risk more efficiently when investing, the bank explained. Andrew Silverman, global co-head of Morgan Stanley... more

 

The majority of businesses in the UK are failing to utilise software asset management technology to help them adhere to compliance legislation, a new report has claimed. Findings from a study by the Software Industry Research Board (SIRB) revealed that 98.75 per cent of respondents did not view compliance as an objective informing SAM policies. Over half of respondents stated that acquiring as the least number of software licences as possible was a software management priority. Optimising... more

 

Investment bank Citigroup is offering up to $2 billion trust preferred securities (TruPs) as part of a strategy to repair the institution’s balance sheet. Buyers of the bonds are being offered a yield of 8.5 per cent in return for their investment, a figure lower than the 8.75 per cent originally marketed. Plans to sell TruPs were unveiled by Citigroup in December last year after it repaid more than $20 billion in securities to the US Treasury. The bank, which is 27 per cent owned by the US... more

 

Data surrounding up to 24,000 client accounts was stolen by a former technology expert from HSBC’s Swiss subsidiary, the bank has admitted. Hervé Falciani, an IT specialist at the Geneva branch, is thought to have committed the theft three years ago. The crime, which was discovered during 2009, affected accounts opened before October 2006, 9,000 of which have subsequently been closed, the bank announced. Alexandre Zeller, chief executive of the Swiss subsidiary, said: “We deeply regret the... more

 

Shareholders at Barclays have warned the bank may struggle to win support for its reported acquisition of a retail bank in the US. Antony Jenkins, recently-appointed head of Barclays’ retail banking unit, is thought to be outlining a strategy to be passed before the organisation’s board detailing the plans. Although no one from Barclays has confirmed a takeover of a consumer operation is going ahead, some investors have criticised the potential move. Jane Coffey, fund manager at Royal London... more

 

Malcolm Calvert, a former partner in Cazenove, has been given 21 months in prison for insider trading.He had been found guilty of the practice earlier in the week following evidence given in court against him by his former friend Bertie Hatcher, who was also involved in insider dealing.Calvert is estimated to have made more than £100,000 ($150,520) from buying and selling around 420,000 shares in six different companies with the aid of information not made available to the wider public.As he... more

 

Citigroup may be earning as much as $20 billion a year from its core business by the end of 2012, according to a prediction from the bank's chief executive officer Vikram Pandit.Mr Pandit is set to use an upcoming speech to investors to predict that Citigroup can earn a yearly return of 1.25 per cent on its assets, reports the Financial Times.Citigroup's asset level stood at more than $1,300 billion at the end of 2009, with the bank estimating this will grow by around five per cent a year.Based... more

 

The US and Europe may be drifting apart on regulations surrounding hedge funds, Tim Geithner, the US Treasury secretary, has warned Plans are being drawn up in Brussels that are set to see tougher restrictions placed on the activities of hedge funds, with suggested rules including only allowing these investment vehicles to use locally-based banks.The proposals, drawn up chiefly by France and Germany, have already caused ruptures within Europe, with the UK believing it is an attempt to curb the... more

 

New proposals to regulate transactions surrounding derivatives including credit default swaps (CDS) need to be introduced, a finance regulator in the US has claimed. Gary Gensler, chairman at the Commodity Futures Trading Commission (CFTC), said that bank use of CDS should be restricted to prevent derivatives of this ilk from being used to reduce levels of regulatory capital. Mr Gensler, a former Goldman Sachs executive, told Bloomberg that new rules should be introduced to stop banks from... more

 

New government proposals in the UK could lead to the numbers of bankers on the highest pay packets being revealed. Lord Myners, City minister, made the comments as part of a speech at the British Private Equity and Venture Capital Association. The minister called for banks to reveal how many staff members receive £500,000 per year and then further disclosures at rising £500,000 brackets. Under the proposals, names of employees would not be disclosed, just the number receiving a certain amount... more

 

US banks including Goldman Sachs and JPMorgan have been urged to avoid re-purchasing shares or raising dividends until financial stability is fully restored, a newspaper report has claimed. A source close to the matter told the Financial Times that US banking regulators have urged bigger financial service providers to wait until the health of the economy is back to full strength before redistributing funds. The Federal Reserve, the Treasury and a number of government agencies have urged caution... more

 

A former partner at stockbroker Cazenove has been found guilty of insider trading in the UK.Malcolm Calvert made around £103,883 ($155,448) from insider information – using knowledge that was not made public to buy and sell around 420,000 shares in six different companies.The prosecution of Cazenove trader involved evidence being given against Calvert by his former friend, Bertie Hatcher, who had also been involved in the dealings.Hatcher has been fined £56,098 for market abuse by the... more

 

An executive at BNP Paribas has warned that the French bank cannot impose any further pay cuts without seeing the departure of its top-performing traders.Francois Villeroy de Galhau, head of retail banking at BNP Paribas, stated that the firm paid its bankers three times less in cash last year than the amounts they received prior to the onset of the financial crisis, reports Bloomberg.He added that if European policymakers imposed tougher regulations on banking pay without similar agreements in... more

 

Axel Weber, the president of Bundesbank, has attacked the proposals to establish a European Monetary Fund (EMF).The idea of establishing an EMF, which would be modelled on the International Monetary Fund, was floated by German finance minister Wolfgang Schauble earlier this week.He stated that such an agency could help prevent a repeat of the current debt crisis that is occurring in Greece.However, the idea has been shot down by Mr Weber who described such a move as the "instutionalisation of... more

 

Barclays is looking into plans to buy a large US retail bank, it has been reported.Company insiders told the Financial Times that discussions about the possible acquisition of an unnamed financial institution in America are ongoing.It was stated that Antony Jenkins, the new head of Barclays' retail banking activities, is already in the process of drawing up a strategy paper regarding a potential acquisition to present to the board of directors at the company within the next two or three... more

 

The anticipated exodus of many bankers and finance professionals from the UK may be prevented by a tax ruling against a British entrepreneur, a broker has claimed. Terry Smith, chief executive officer (CEO) at Tullet Prebon, told the UK’s Times newspaper that the company had offered its workforce the opportunity to escape new tax legislation via opportunities in Geneva and Zurich. However, less staff than anticipated had agreed to take up the invitation, which the CEO blamed on a legal battle... more

 

Bankers and finance industry professionals must start behaving “as if they have something to lose” if reform within the industry is to work, the financial services minister has claimed. Lord Myners made the comments while giving a speech at the Smith Institute in London. Market discipline must be enforced more stringently if lessons are to be learnt and similar financial crises to be avoided in the future, the minister stated.He explained: “We are serious about removing the safety net... more

 

London is to become one of the most expensive global centres for bankers to work in after the forthcoming introduction of a revised income tax banding for high earners, new research has shown. Findings from a study by KPMG, reported by the Wall Street Journal, revealed that many British bankers would pay more in tax than colleagues working in other financial centres such as New York, Dubai, Hong Kong and Geneva. The research compared the amount of employee tax and social-security payments... more

 

Financial services provider UBS is to launch a “dark pool” Multilateral Trading Facility (MTF) to allow cross trading in Europe. According to the firm, UBS MTF will work alongside the existing UBS Price Improvement Network (UBS PIN) by offering a wider array of liquidity to its members. The MTF is still awaiting regulatory approval and will be based on a Central Counterparty (CCP) model, which will allow investors to mitigate certain amounts of risk. Dr Robert Barnes, head of Market... more

 

Many businesses in the UK are failing to back up IT and technology systems effectively, a new report has claimed. Findings from a study by Acronis revealed that nearly two-thirds of companies questioned said it can take them up to a day to recover following a system failure. Nearly a fifth of respondents stated that they do not carry out back-ups on devices such as laptops and PCs. Acronis warned that more companies should follow the example the 25 per cent of respondents who do adopt such... more

 

A group of shareholders has launched a law suit against Goldman Sachs accusing the investment bank of paying management and senior executives too much. Legal action has been filed at Delaware Chancery Court by pensions fund the International Brotherhood of Electric Workers, Reuters reported. The group described the bank’s decisions to set aside up to 47 per cent of the bank’s revenue for pay as “vastly overcompensat[ing] management and constitut[ing] corporate waste”. However, Ed... more

 

Greek prime minister George Papandreou has called on US president Barack Obama to introduce tougher regulation on currency traders and hedge funds.The European country is currently in the midst of a financial crisis which has seen three packages of cuts passed in the past three months by the government.Last week, further debt-cutting measures were introduced including pay cuts for citizens working in the public sector, as well as tax rises on goods such as fuel.Mr Papandreou has stated that... more

 

Dubai World's proposals on how it wishes to restructure its debts to creditors will be presented to banks owed money this month, it has been confirmed.Newspaper reports had suggested that a plan would be put forward as early as this week and Dubai World have confirmed that the process will occur before April."A formal proposal will be presented by Dubai World to creditors in March," a government spokesman told AFP.Last November, the state-owned company announced it was seeking to restructure its... more

 

European Parliament politicians are in the process of debating tough new restrictions on banking bonuses across the continent.A new piece of legislation has been proposed by MEP Arlene McCarthy which suggests that bonuses should not be higher than 50 per cent of total annual remuneration.Half of bonus payouts should be paid in the form of shares which would not be divested for three years under the proposals, reports the Financial Times.Up to 60 per cent of bonuses could also be deferred for the... more

 

The Federal Reserve (Fed) will retain control of regulatory powers for banks with more than $100 billion in assets, the Financial Times reported. Congress has been debating whether to hand this responsibility to a single regulator as one of a number of reforms planned for the industry. However, according to sources close to the matter, proposals to strip the Fed of these powers have fallen through. Timothy Geithner, secretary and former president of the New York Fed, was one of the most vocal... more

 

Prudential has announced it is to speed up the process of seeking a listing on the Hong Kong Stock Exchange. The insurer is looking to ensure the listing is active before it launches a rights issue as part of a bid to raise $20 billion from its shareholder-base. Prudential is undertaking the issue after announcing details of its planned acquisition of the Asian arm of American Insurance Group’s (AIG) business, AIA for $35.5 billion. In a statement, the company said: “Prudential has made an... more

 

JPMorgan was the richest hedge fund manager working in the industry at the close of 2009, a new report has shown. Figures from Pensions & Investment revealed that the financial services provider managed a total of $53.5 billion of hedge fund assets. By the end of 2009, JPMorgan Asset Management had $32.5 billion in assets while Highbridge Capital Management looked after $21 billion worth of funds. The total was 18.9 per cent higher than the figure in its portfolio at the end of 2007, the survey... more

 

The UK’s Financial Services Authority (FSA) will not be tightening “quantitative standards” until the economy becomes more stable. According to the industry regulator, the recovery of the markets needs to be guaranteed before any further pressure is put on firms. The changes were originally announced in October 2009 to enhance liquidity risk management processes and prevent a future financial crisis from taking place. In a statement, the body said: “The FSA believes that it would be... more

 

US President Barack Obama’s budget proposals would leave the US $1.2 trillion more out of pocket during the next decade than predicted, a new report has claimed. A study by the Congressional Budget Office (CBO) revealed that budget plans would result in a total deficit of $9.8 trillion over the period. CBO also forecasts a deficit of $1.43 trillion for 2011, a figure $75 billion higher than the projected sum. Paul Ryan of Wisconsin, a Republican on the House Budget Committee, was quoted by... more

 

American International Group (AIG) has announced the details of the sale of ALICO, its foreign insurance unit, to fellow US insurer MetLife.News of a potential deal was leaked late last week after company insiders told Reuters an agreement on the sale was close.It has now been confirmed that AIG will receive $15.5 billion for the overseas division, with $6.8 billion being paid in cash and $8.7 billion coming in the form of shares and stock options in MetLife.It means that AIG will take a 20 per... more

 

The creation of a European Monetary Fund is being planned by Germany and France, two of the leading countries in the eurozone, a senior German politician has revealed.Wolfgang Schauble, the German finance minister told Welt Am Sonntag that the introduction of such a body would be closely modeled on the International Monetary Fund (IMF) – but would not be a competitor to it."We do need an institution for the internal equilibrium of the eurozone that would have at its disposal both the... more

 

Royal Bank of Scotland (RBS) is planning to expand its operations in China via the creation of a new joint-venture securities unit, a company spokesman has said.Hui Yukmin, a spokesman for the bank's Hong Kong office, told Bloomberg that RBS is looking to "enhance its existing platform" in China through the creation of such a division.She said that RBS is currently holding talks with an unnamed Chinese company about setting up a joint venture.If the deal goes through, the bank will join other... more

 

Icelandic voters have overwhelmingly voted 'No' in a referendum on whether the country should pay back British and Dutch investors who lost a combined total of billions of dollars when Landsbanki collapsed at the height of the financial crisis.Around 93 per cent of those who voted stated that they do not support a deal to repay a total of around $5 billion from the state's funds.About 340,000 people in the UK and Holland had accounts with Icesave, a subsidiary of Landsbanki, at the time of its... more

 

Many of London’s top bankers may leave the city if taxes on bonuses continue, a leading City headhunter has claimed. Robert Walters, chief executive officer at the recruitment company, explained that the 50 per cent tax introduced by the Labour government and the introduction of the bonus tax could force many of the best bankers to work for companies outside of the UK. Chancellor of the exchequer Alistair Darling outlined the bonus tax in his pre-Budget report in December of 2009. The 50 per... more

 

The Securities and Exchange Commission (SEC) has charged a couple in Miami of running a $135 million ponzi investment scheme. Gaston and Teresita Cantens, the owners of Royal West Properties, sold a series of promissory notes to investors, which promised returns of up to 16 per cent. The couple, who are both in their seventies, conducted the fraud between 2002 and 2009 and used investments to reimburse earlier investors and fund new projects. Up to $20 million worth of money is thought to have... more

 

Deutsche Bank has had its rating downgraded two places by credit agency Moody’s.The financial institution’s rating was reduced from Aa1 to fourth highest Aa3 while its financial strength was lowered to C-plus from B, the agency announced. According to the body, the rating was downgraded following delays in the acquisition of Deutsche Postbank AG. A lack of transparency surrounding the bank’s activity in the capital markets and subsequent concern over the organisation’s exposure to risk... more

 

JPMorgan, Washington Mutual (WaMu) and an industry regulator may strike a deal over the ownership of a $4 billion bank deposit during the coming days, an attorney has claimed. WaMu was declared bankrupt in September 2008 and was sold by Federal Deposit Insurance Corp to JPMorgan for $1.9 billion. The funds were seized as part of the transaction and now all three parties are disputing which one has the ownership rights. Brian Rosen, a partner at law firm Weil, Gotshal & Manges LLP in New York,... more

 

Michael Geoghegan, HSBC chief executive officer (CEO), is to receive an additional £800,000 a year for relocating from London to Hong Kong. The banker will receive £300,000 as part of a cost of living allowance and a further £500,000 for housing, travel and the education of his children. HSBC is providing the money “in recognition of the relocation to Hong Kong and the associated fixed costs of living that will be incurred”. A spokesperson for HSBC told the UK’s Daily Telegraph: “This... more

 

American International Group (AIG) is close to a deal that will see the company sell ALICO, its foreign life insurance unit, to MetLife for a figure believed to be in the region of $15 billion, insiders have said.An agreement may be reached as early as this weekend, one source told Reuters.The proposed deal follows hot on the heels of AIG's sale of its AIA unit to Prudential Insurance for $35.5 billion, which was announced earlier this week.AIG is carrying out the divestment of its assets as... more

 

A stake in UBS is set to lose the Government of Singapore Investment Corp (GIC) more than $5 billion, it has been reported.GIC invested $10.18 billion into the Swiss bank two years ago in the form of a mandatory convertible bond but is set to lose in the region of $5.1 billion on its share, reports the Financial Times.However, GIC has stated it remains confident in the future of UBS and plans to hold on to its stock in the financial institution for "two or three decades".UBS and Citigroup... more

 

A survey of 16 global banks has suggested that the British Treasury is set to boost its coffers by more than £2.5 billion ($3.75 billion) as a result of the banking bonus tax.Last December, chancellor Alistair Darling announced that a one-off levy of 50 per cent was to be introduced on bonuses of more than £25,000 – with banks rather than employees footing the bill.The intention of the legislation was to encourage financial institutions to cut the amount they were going to pay staff in... more

 

The US Treasury announced it raised $1.57 billion in an auction of warrants held following the bailout of the Bank of America (BofA). According to the government, the completion of the sale means it is now divested of any investment in BofA. It is also the highest amount taken from a warrant sale of securities in one institution.The A and B class warrants sold in the auction were priced at $8.35 and $2.55 respectively. Bernard Chriqui, a New York-based trader at Nomura Securities International... more

 

Greece should consider selling some of its islands to pay off its debt, a pair of German politicians has claimed. Josef Schlarmann, a member of chancellor Angela Merkel's Christian Democrats party, and Frank Schaeffle, a finance expert, made the comments in an interview with German newspaper Bild. The former was quoted by Reuters as saying: “Those in insolvency have to sell everything they have to pay their creditors. Greece owns buildings, companies and uninhabited islands, which could all be... more

 

Lee Sachs, a senior member of the US Treasury and close advisor to Treasury Secretary Tim Geithner, is to step down from his role. Mr Sachs is thought to have been one of the key figures in developing banking system tests and policies that helped stabilise the US economy after the global credit crash. According to an official from the body, the financial advisor is leaving the role as he believes his main goal of stabilising the financial system has been achieved. It is not yet known what Mr... more

 

Investment bank Morgan Stanley has found a buyer for its 34.4 per cent share in China International Capital Corp (CICC). Li Jiange, chairman of the acquired investment firm, announced that the sale is now progressing but was unwilling to provide the name of the interested party or the price the stake was being sold for. Mr Jiange was quoted by Reuters as saying: “The deal has been proceeding very smoothly and has developed into a new stage. The next step for us is to apply for approval from... more

 

Vikram Pandit, chief executive officer (CEO) at Citigroup, has thanked taxpayers in the US for providing financial support to the organisation during the global financial crisis. The banking group head’s comments were part of a prepared statement due to be given to a Congress panel responsible for reviewing the program of financial aid given to banks. Citigroup, which is 27 per cent owned by the US government, received $45 billion from the government as part of the Troubled Asset Relief... more

 

The US Treasury has released further details of the Obama administration’s proposals to overhaul the banking industry. In a five page briefing, the body outlined proposals to prevent commercial bank-owning firms and institutions from proprietary trading. In a summery, the US government stated: “These firms will be under tough, consolidated supervision, more stringent capital and liquidity requirements, and be required to provide more information to the market about their risks.“Moreover,... more

 

Victims of Ponzi fraudster Bernard Madoff who invested in the LuxAlpha fund have been told they can not sue UBS, the bank which helped set up the investment vehicle, a court in Luxembourg has ruled.The ruling was made in a test case involving ten claimants following the filing of more than 100 lawsuits against UBS alleging that it neglected its duties in the management of the fund.It was ruled that victims must instead seek claims via the liquidators of the fund.Tatiana Togni, a spokeswoman for... more

 

A Morgan Stanley executive has stated that five times as many hedge funds are being launched at the moment than at this time last year.Alex Ehrlich, head of Morgan Stanley's prime brokerage business, told the Reuters Private Equity and Hedge Funds Summit in New York that as many as 100 new hedge funds could start working with his company this year."We are seeing very, very strong hedge fund formation right now," he said. "We are as busy as we have ever been."He added that clients are returning... more

 

Barack Obama's plans to split up retail and investment banking operations have come under fire from Peter Mandelson, the business secretary in the British government.Lord Mandelson claimed the plans to stop banks from engaging in proprietary trading and owning hedge funds were too ambitious and difficult to regulate."Trying to apply sweeping rules about the structure, content and range of activities of banking entities is too difficult to do," he stated.He added that regulation should be focused... more

 

The reputation of Goldman Sachs could be damaged by the “negative publicity” it has recently attracted, the bank admitted. Goldman Sachs has faced criticism for overcompensating bankers through its payments and bonus system and due to its involvement in providing credit default swaps to Greece’s government. In a recent filing to the Securities and Exchange Commission (SEC), the bank listed the potential impact of “negative publicity” alongside market volatility and regulatory... more

 

The European Commission (EC) is calling on banks and regulators to meet to discuss new regulations surrounding credit default swaps (CDS). According to sources familiar with the matter, the meeting is to discuss pricing surrounding the swaps and how they are connected to the sale of sovereign bonds, Bloomberg reported. Financial supervisors will meet in the morning and participants in the CDS market in the afternoon of March 5th to debate the products and their place in the market. Chantal... more

 

The value of shares at Prudential has dropped by 20 per cent following the news of its proposed takeover of the Asian arm of AIG’s insurance business. Plans to purchase American International Assurance , AIG’s Asia life unit, were unveiled by Prudential earlier in the week. However, since the $35.5 billion acquisition was announced, the value of its shares fell by 12 per cent on Monday and a further eight per cent on Tuesday. Concerns have been raised over the size of the takeover bid and... more

 

Financial services provider Barclays Wealth is planning on investing an estimated £230 million in upgrading its technology infrastructure, reports have claimed. The group has committed £350 million worth of funds to developing its wealth business with two-thirds of the figure expected to be invested in its technology platform, the Financial Times reported. According to the article, funds are expected to be spent on improving services to its global client base. A “state-of-the-art IT... more

 

Stuart Gulliver, head of investment banking at HSBC, has been awarded an estimated £9 million bonus for 2009. The banker is thought to be the highest earner at the firm and will receive the figure on top of his £800,000 annual salary. News of the sum emerged after Michael Geoghegan, HSBC’s chief executive officer, donated his £4 million bonus to charity as part of a bid to diffuse public anger over banker bonuses. However, Stephen Green, HSBC chairman, claimed that Mr Geoghegan was... more

 

Greece may seek assistance from the International Monetary Fund (IMF) if financial backing is not forthcoming from its European neighbours, the country's prime minister has suggested.George Papandreou and his government have just announced the country's third austerity package in three months – with debt-cutting measures including increases in VAT and taxes on alcohol, fuel and cigarettes, as well as pay cuts for public sector workers."We have shown we can take difficult decisions," said Mr... more

 

The US Justice Department has launched an investigation into several hedge funds over allegations they have been working together in an attempt to lower the value of the euro.People close to the matter told the Wall Street Journal that the department has sent a letter to several funds, including well-known names such as Soros Fund Management and Paulson & Co, asking them to keep hold of their records relating to trading on the euro.SAC Capital Advisers and Greenlight Capital have also received... more

 

The Securities and Exchange Commission's (SEC) decision to bring in tougher regulation of short selling practices has been criticized by a professor of finance.Under the new rules, which were approved last week, restrictions will be imposed on short selling when stock falls by more than ten per cent in the course of a day.If that occurs, then short selling may only take place at a price above the best bid for that stock.According to SEC estimates, around four per cent of the market is affected... more

 

Standard Chartered increased its profit margin to $3.38 billion last year, the British bank has revealed.The figure is a slight improvement on the $3.24 billion figure recorded for 2008.Its operations in India and Hong Kong both posted profits of more than $1 billion last year – results that delighted Peter Sands, the chief executive officer (CEO) of Standard Chartered."There is a race for which will be our biggest market by profits this year," he said."We have built a superb franchise in... more

 

Barclays Capital has appointed an ex-employee of Goldman Sachs to lead its corporate finance department in the Asia-Pacific. Johan Leven, former head of Asian mergers and acquisition at the investment bank’s rival, will be employed as managing director and co-head of corporate finance at Barclays Capital, Asia-Pacific. He will work with Richard Gallivan on leading the unit. Matthew Ginsburg, head of Investment Banking, Asia-Pacific, said: “I am delighted to welcome Johan to the team. He... more

 

The UK banking industry supports the need for regulatory change but not at “the expense of recovery and future growth”, a banking industry organisation has claimed. According to the British Bankers Association (BBA), many of the institutions operating from the UK have already acted to improve liquidity and strengthen balance sheets following the global credit crisis. Angela Knight of the BBA, said that firms now believe that proposals to prevent future problems within the banking industry... more

 

Outsourcing to third party suppliers and data breach risks are among the main IT security concerns for firms working within the financial services industry, a new study has shown. Research conducted by the Ponemon Institute on behalf of Compuware revealed that many respondents do not deploy sufficient IT security to ensure complete protection from potential threats to their data. Many of the overlooked areas include identity compliance, data loss prevention (DLP) and intrusion detection, the... more

 

The UK’s Financial Services Authority (FSA) was seduced by the “boom years” of the 20th century into believing that banks were too big to fail, the regulator’s chairman has said. Lord Turner made the comments in reply to questions from the Treasury Committee. The FSA’s chairman said: “Everyone was seduced by the long boom. We were often led astray in the past by complicated mathematical rules. Regulators failed to notice the inherent weakness in that position.” However, he argued... more

 

The Greek government is expected to unveil a number of initiatives including cutting public sector pay as part of an attempt to reduce the country’s financial deficit. An unnamed source has said that the plan could save the country as much as $6.5 billion, Bloomberg reported. Prime minister George Papandreo stated that an announcement confirming the proposals will be made following a meeting of the country’s cabinet. Greece’s debt management agency is also planning on launching a bond... more

 

Sheila Bair, chairman of the Federal Deposit Insurance Corporation (FDIC), has stated that regulators must concentrate on fixing the banking system rather than punishing individuals.In an interview with Reuters, Ms Bair said that while she would personally be ashamed to be drawing a large salary for a company that was performing poorly, regulation needed to focus on larger problems. "I don't think it should be about punishing somebody," said the FDIC chief. "It should be forward-looking and... more

 

Goldman Sachs made at least $100 million on 131 days in 2009 – equivalent to once every two days.The figure was revealed by the Securities and Exchange Commission, in a filing that showed the bank made the profits by taking larger risks than it did in 2008.Its daily 'value at risk' figure – the amount Goldman Sachs estimated it could lose in a day's trading – stood at $218 million, up from $180 million the previous year.However, the bank only lost money on 19 occasions in 2009, with the... more

 

British banks such as Barclays and Royal Bank of Scotland (RBS) are ignoring government calls to show restraint on remuneration levels, it has been claimed.RBS has recently raised pay for its employees by around 73 per cent on last year's levels, while Barclays Capital, the investment banking arm of Barclays, has increased pay and bonuses by 93 per cent.Chris Roebuck, a visiting professor at Cass Business School in London, told Bloomberg: "The banks are just paying lip service to what they think... more

 

Vikram Pandit, chief executive officer (CEO) at Citigroup, is to receive $128,751 as a salary for 2009, a new filing has claimed. According to the document submitted to the Securities and Exchange Commission (SEC), Mr Pandit agreed to accept a salary of $1 for 2009 in February of last year until the bank made a profit. However, he received $125,000 in salary before the announcement was made. Citigroup’s CEO was rewarded $38.2 million worth of compensation in 2008 with a base salary of $958,333... more

 

Donald L Kohn, vice-chairman of the Federal Reserve (Fed), has announced he will resign from his position in June 2010. Mr Kohn has been on the Fed’s board since August 2002 and held the post of vice-president from June 2006. Ben Bernanke, chairman of the Fed, said that the US and the Fed need to acknowledge the importance of the departing post holder’s contribution to public service in the US during the last 40 years. “Most recently, he brought his deep knowledge, experience, and wisdom... more

 

Businesses should adopt open source data integration technology to help reduce spending, a software expert has claimed. François Mero, general manager-EMEA at Talend, made the comments following a report by Forrester Research that showed application maintenance and operations will account for more than half of company IT budgets. Mr Mero said: “Open source data integration software allows you to integrate a company’s legacy system with other applications, enabling businesses coming out of... more

 

Tom Montag, Bank of America’s (BofA) head of investment banking, was awarded $29.9 million during 2009, reports have claimed. According to a proxy statement, the banker received the money as part of an agreement made with Merril Lynch when he joined the business in April 2008, four months before it was acquired by BofA. The payment consisted of $586,539 as a base salary and $29.31 million awarded in shares and stock. Frank Glassner, chief executive officer at Veritas Executive Compensation... more

 

The board of directors at Goldman Sachs has rejected a number of appeals by shareholders for an investigation into pay processes and bonus schemes to be launched. A filing by the investment bank to the Securities and Exchange Commission (SEC) showed that “several demand letters” had been sent calling for changes to be made to the organisation’s compensation methods.The document said that the letters demanded that “Group Inc.’s board of directors investigates compensation awards over... more

 

HSBC has seen its profit levels drop by 24 per cent after the re-pricing of debt hit the company.However, the bank still made $7.1 billion last year thanks to a 56 per cent increase in underlying profits, which reached $13.3 billion.Stephen Green, chairman of HSBC, said that the company had built up its financial strength in 2009, with the bank's capital base now standing at $10.2 billion."Throughout the crisis, our strategy has remained clear - to build on our position as the leading... more

 

Icelandic officials have restarted negotiations with their counterparts from Holland and the UK over $5.3 billion owed to investors from the two countries following the collapse of Landsbanki in 2008.A fortnight of talks ended in deadlock last week, but the sides have returned to the negotiating table to thrash out a deal.Time is running out before a referendum takes place in Iceland on Saturday (March 6th 2010) on whether the state should foot the bill for repaying foreign investors.With a 'no'... more

 

The bosses at HSBC and Standard Chartered are set to give their annual bonuses to charity, it has been widely reported.Michael Geoghegan, chief executive of HSBC and Peter Sands, his counterpart at Standard Chartered, are to hand over a combined total of around £6 million ($8.9 million) to good causes.Both banks, which did not need any form of taxpayer bailout during the height of the financial crisis, are expected to post strong results for 2009 this week.Mr Geoghegan is reportedly set to... more

 

American International Group (AIG) is to sell its Asian life insurance division, AIA Group, to Prudential for $35.5 billion, it has been announced.The deal will comprise of $25 billion in cash, $8.5 billion in equity and equity securities and $2 billion worth of preferred stock in Prudential.AIG will then use $25 billion of the amount received from the AIA sale to repay some of its debts to the Federal Reserve Bank of New York.The firm intends to gradually cash in the remaining $10.5 billion... more

 

JPMorgan Chase will not raise its dividend until the threat of a “double dip” in the economy has subsided, the company’s chief executive officer has said. Jamie Dimon made the comments at the financial institution’s annual investor meeting, Reuters reported. Representatives from the bank stated that ideally the dividend would be increased from 75 cents to $1. However, further confirmation that the financial crisis had ended, such as rising employment figures, would be needed before the... more

 

“Narrow banks” represent the future for a safer financial industry, the UK’s banking head has claimed. Mervyn King, governor of the Bank of England (BoE), made the comments while being questioned by the Future of Banking Commission. He explained to the committee, which was chaired by MP David Davis, that the banking sector needs a long-term strategy to ensure it does not face another global crisis in the future. The governor called for a split between retail banking and riskier investment... more

 

Proposals to overhaul the banking industry outlined by US President Barack Obama may be diluted to receive approval from the senate, reports have claimed. As part of wide-ranging reforms for the financial services industry, the US government proposed to limit the size of banks and prevent those institutions involved in proprietary trading from investing in hedge funds or private equity groups. The legislation, known as the Volcker Rule after Federal Reserve chairman Paul Volcker, has yet to be... more

 

Failed financial firm Lehman Brothers is to pay JPMorgan $557 million and allow the bank to retain $7.1 billion in collateral as part of a settlement for a bankruptcy filing. According to court documents, JPMorgan is planning on transferring illiquid securities worth several billion dollars back to the collapsed bank. The filing relates to the period before the bankruptcy of Lehman Brothers when JPMorgan worked as the clearing bank on behalf of the struggling institution’s brokerage unit.... more

 

American insurer AIG has posted a net loss of $8.9 billion during the fourth quarter of 2009. Official figures from the company were higher than the $61.7 billion loss recorded during the same period in 2008. Up to $2.3 billion of the loss was accounted for by strengthening its General Insurance reserves. Robert H Benmosche, AIG president and chief executive officer, said: “Our team made great progress during the year in executing our strategic restructuring plan, by stabilizing and... more

 

Hedge funds are making money on the Greek debt crisis by betting on European banks cutting their exposure to the country's economy, industry insiders have said.It is estimated by Barclays that about 95 per cent of Greece's debts are held by banks operating in the eurozone.Speaking to the Financial Times, one unnamed strategist at a UK-based hedge fund said that several firms had successfully engaged in the practice as banks look to limit their risk."There are a group of funds, perhaps three or... more