Fourth of July weekend is a time for celebration and relaxation, but also reflection on the critical juncture our nation faces.The U.S. has been on an “unsustainable cycle of buying and spending” that cuts across all strata of society, says TJ M
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Citigroup this week joined Bank of America and JPMorgan in sharply raising fees on credit cards for late payments, balance transfers and the like.The banks appear to be trying to raise rates before new consumer-protection rules go into effect. They’re als
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The worst job market in a generation is getting worse. The unemployment rate in June rose to 9.5% - the highest since the early 80s. All told, almost 15 million Americans are out of work.So what’s a new grad or a displaced worker to do?
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Private equity houses are muttering proposed U.S. rules won’t make it any easier for them to use their fabled treasure chest to buy troubled banking assets and clear out some toxic asset waste.
In China things are different: the watchdog there is encouraging China Mobile (0941.HK) to buy shares in the country’s biggest commercial bank ICBC (1398.HK), possibly with a view to propping up banking stock. For all other deals stories on Reuters, click here.
One other item of interest in today’s newspapers: Germany’s Frankfurter Allgemeine Zeitung says Chinese state-owned automaker Beijing Automotive (BAIC) will unveil an improved non-binding offer for German carmaker Opel today. The Wall Street Journal has a similar story.
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Boutique investment bank Rothschild appears to be joining others such as Moelis and Greenhill in tapping investment banking talent that’s coming lose amid the financial crisis.
Rothschild, a more than two centuries old family-owned business, is planning to hire financial institutions and other investment bankers in the United States, a source briefed on the matter said.
A Rothschild official wasn’t available for comment.
In October, the bank snapped up some FIG bankers in Europe, including from Lehman. Antonio Villalon, a Lehman vice chairman, was named as the co-head of its global financial institutions group.
The interest in the financial institutions sector is, of course, due to expectations of even more activity as things begin to look better in the economy.
Moelis, which has already hired some 15 managing directors this year, is also looking for FIG bankers. Deutsche Bank and Greenhill have also already hired a bunch.
Other active sectors have seen investment banks across the spectrum bulk up on talent as well, a recent - and remarkable — case being that of an exodus of healthcare bankers from UBS to Jefferies.
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Neelie Kroes’ campaign to ensure the European Commission’s rules over state aid are respected has remained in a high gear over the last few weeks. Three times the Competition Commissioner has spoken publicly about how restructuring plans for shaky banks bailed out last Autumn should be agreed with the governments of those countries.
This Tuesday she told the British Banker’s Association the truth. Royal Bank of Scotland made the largest ever corporate loss last year and yet was still saved by the government with a massive £20 billion plus rescue injection. One might ask how such an institution, so fundamentally important for the economy, could not be?
Kroes does not dispute that. What she does insist on is that such aid cannot be effectively propping up the bank indefinitely, allowing the balance sheet, and hence the bank’s business, to remain bigger than it should be, if it were not for that aid.
EC rules state that a restructuring plan to set out how this should be rectified must be made within six months of the aid being administered. After a while there is a danger that smaller banks, without aid, will be disadvantaged by their larger protected brethren.
Kroes is clearly losing her patience with the UK Government. The two camps have yet to resolve how Northern Rock will be restored to independence over 15 months after a draft restructuring plan for the UK’s fifth largest mortgage lender was submitted.
It seems as if a similar delay could happen with RBS. However, that could be disastrous for Kroes as the UK government turns its attention to the forthcoming election. RBS is such a significant bank that there is a danger Kroes’ authority will be damaged irreparably if no agreement can be reached on possible divestments.
With Germany she acted decisively agreeing a dramatic restructuring of Commerzbank and WestLB within the EC timetable.
So the next month, before RBS updates on its internal restructuring plans with interim results in early August, will be critical. An announcement on the sale of various RBS Asian businesses, possibly to Standard Chartered and ANZ, is expected imminently.
However, that is unlikely to be sufficient to satisfy Kroes, who wants to see RBS’s dominant domestic position in UK corporate and smaller business banking broken up. Perhaps we will yet see NatWest and the Royal Bank separated. Bringing those brands together was disgraced former chief executive Sir Fred Goodwin’s key deal.
After that Kroes will aim her sights at Ireland and her homeland of the Netherlands. Both states are propping up key lenders there. Kroes is due to visit Ireland for two days on July 16.
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Stocks are falling today after employers cut 467,000 jobs in June, higher than the 363,000 expected by economists. Unemployment rose to 9.5%, a bit below forecasts but still the highest level since Ronald Reagan’s first term in office. …
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When Wall Street imploded last year, the Fed and Treasury took “some of the right moves” in order to revive the financial system, says William Cohan, author of House of Cards. But the government blew at least one crucial act of the saga, Cohan s
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