Conversation Starters
2011 World Bank and International Monetary Fund Spring Meetings Website Launched
Each spring, thousands of government officials, the private sector, journalists, civil society representatives, and other interested observers gather in Washington, DC for the spring meetings of the World Bankand International Monetary Fund (IMF). At the heart of the gathering are meetings of the joint World Bank-IMF Development Committee and the IMF’s International Monetary and Financial Committee that discuss progress on the work of the World Bank and IMF. Also featured are seminars, regional briefings, press conferences and many other events focused on the global economy, in addition to international development and the world’s financial markets. The spring meetings and related events begin Apr. 12.
***CN: See the meeting schedule here.
NYPC's Lukken: NYPC Open To Pursuing Strategic Relationships - Including Partnerships
New York Portfolio Clearing (NYPC) will be open to pursuing strategic relationships - including partnerships - in the days ahead, according to Walter Lukken, chief executive officer of the NYPC.
Lukken commented on the plans of the NYPC - a new clearing joint venture with The Depository Trust and Clearing Corporation (DTCC) expected to begin operations on March 21st. - during a telephone press briefing held Wednesday.
On Wednesday, it was announced that NYSE Liffe U.S., the U.S. futures exchange of NYSE Euronext (NYX), would begin trading Eurodollar futures on March 21, and would launch 2-year, 5-year and 10-year U.S. Treasury futures along with U.S. Bond and Ultra Bond futures products on March 28, subject to regulatory filings. These products will be cleared through NYPC, which has received all the required approvals from the Commodity Futures Trading Commission (CFTC) and the Securities Exchange Commission (SEC).
Regulators have already granted a reciprocal approval to the Fixed Income Clearing Corporation (FICC) allowing for the “one-pot” cross-margining arrangement with NYPC. The regulatory approvals would allow NYPC and FICC to proceed with a plan to offer “one-pot” margining for fixed income cash and futures positions, with the aim of reducing risk and delivering capital efficiencies to the markets.
Lukken assumed his position as CEO of the NYPC on May 1, 2010. His charge was to lead NYPC's drive to be the first clearing organization to margin cash fixed income positions and their natural derivatives hedges together, in a way designed to substantially improve both operational and capital efficiency.
**CN: This item appeared this week in the JLN Interest Rates Blog (www.jlninterestrates.com).
Exchanges, Clearing Houses & MTFs
NYSE Plan to Take On CME in Rate Futures to Begin March 21
Bloomberg
NYSE Euronext’s plan to compete with CME Group Inc. by allowing investors to reduce margin for offsetting interest-rate futures and U.S. Treasury positions will begin March 21. New York Portfolio Clearing, the venture between NYSE Euronext and the Depository Trust & Clearing Corp., received approval from the U.S. Commodity Futures Trading Commission to offer investors the margin offset, the company said in a statement today. It’s targeting CME Group’s 98 percent share of U.S. futures trading. Chicago-based CME Group said two days ago that it would offer the same type of margin reduction between
futures and cash Treasury positions by the end of the month.
http://jlne.ws/gJBBUP
DTCC Receives SEC Approval for Transformational One-Pot Margining
Business Wire
DTCC announced today that the SEC has approved the "one-pot" cross-margining arrangement between FICC and NYPC.
http://jlne.ws/eDdlqs
DTCC RECEIVES SEC APPROVAL FOR TRANSFORMATIONAL ONE-POT MARGINING
Decision Opens Door for Launch of New York Portfolio Clearing
New York, March 1, 2011 – The Depository Trust & Clearing Corporation (DTCC) announced today that the Securities and Exchange Commission (SEC) has approved the transformational “one-pot” cross-margining arrangement between fixed income positions cleared by DTCC’s Fixed Income Clearing Corporation (FICC) subsidiary, including U.S. Treasury securities, agencies, and repurchase agreements, and interest rate futures positions cleared by New York Portfolio Clearing (NYPC)—a critical step designed to deliver an unprecedented level of capital and operational efficiency, transparency and risk reduction.
http://jlne.ws/fBuxsY
CME to Offer Rate Margin Offset to Block NYSE Competition
By Matthew Leising, Bloomberg
CME Group Inc., the world’s largest futures market, will reduce margin payments for customers who own offsetting interest-rate future and cash U.S. Treasury trades to ward off planned competition from NYSE Euronext. Financial Instrument Clearing Membership, as it will be known, is expected to be offered by the end of March, Chicago- based CME Group said in a statement today. Competitor New York Portfolio Clearing, a joint venture between NYSE Euronext and the Depository Trust & Clearing Corp., plans to offer the same margin benefit between rate futures and Treasuries once it receives regulatory approval.
http://jlne.ws/dUoPSo
CME To Challenge NYSE Venue In Treasurys Trade Service
By Jacob Bunge, DOW JONES NEWSWIRES
CME Group Inc. (CME) announced Monday a new service for fixed-income traders, responding to an anticipated competitive threat from NYSE Euronext (NYX).
http://jlne.ws/gUOmss
Lead Stories
Trichet says ECB may raise rates next month
Reuters
The European Central Bank will exercise "strong vigilance" over rising inflation, President Jean-Claude Trichet said on Thursday, and may raise interest rates as soon as next month.
http://jlne.ws/e7mxt1
Bill Gross: PIMCO Investment Outlook - Two-Bits, Four-Bits, Six-Bits, a Dollar
The Gross family legend is rather full of Paul Bunyan tall tales passed down over the years but none perhaps more self- revealing than “The Day When I Gave the Waitress a Negative Tip.” Admittedly I was young and full of testosterone but the service was terribly sloooww and I was in a big hurrrryyy! Finally presented with a $2.00 bill, I took two bucks and wrote the following on a nearby napkin: “Thanks for the sh…ty service, negative tip – you owe me 25 cents.” I didn’t stick around to see the reaction, but I’m sure it was a unique experience for the young lady. I was, of course, like any 21-year-old, in the business of establishing a repertoire of “unique” experiences and this was but one notch on my Paul Bunyan Axe
http://jlne.ws/dFTioU
**CN: Suggested reading for Gross: Barbara Ehrenreich's Nickel and Dimed
Fink Says He's a `Big Buyer' of Dollars That Gross Says Avoid
By Erik Schatzker and Sree Vidya Bhaktavatsalam, Bloomberg
BlackRock Inc. (BLK)’s Laurence D. Fink, chief executive officer of the world’s largest asset manager, said he’s a “big buyer” of the U.S. dollar, which rival Bill Gross has urged investors to avoid.
http://jlne.ws/hhOonO
Gensler looks to break up Wall St club
By Christopher Doering and Roberta Rampton, Reuters
Gary Gensler, chief regulator of U.S. derivatives markets, is working to break up the Wall Street club where he cut his professional teeth, but concedes it will take some time.
http://jlne.ws/hWDWYI
U.S. Getting Closer to $14.29 Trillion Debt Ceiling
By Damian Paletta, WSJ.com
As the debate over a bill to continue funding the federal government draws most of the attention on Capitol Hill, the U.S. federal debt continues to near the ceiling allowed by current law.
http://jlne.ws/h56OtC
China Owns a Lot More U.S. Debt Than Previously Thought
By Ian Talley, WSJ.com
A major upward revision of the U.S. Treasury Department‘s assessment of China’s holdings of U.S. securities last year shows the U.S. is far more indebted to the emerging power than originally thought.
http://jlne.ws/f20Jw8
China holds $1,160bn of US debt
By Michael Mackenzie, Financial Times
The US Treasury has dramatically revised data on foreign holdings of US government debt, estimating that China owns more Treasuries than previously thought while the UK holds only about half as much. The figures released on Monday suggest fears that China has been reducing its US dollar holdings may have been overstated.
http://jlne.ws/hp6XgS
The Durbin Amendment’s Effect on Credit Unions
By Tim Chen, Forbes
The Durbin amendment to the Dodd-Frank financial reform bill has the banking industry up in arms. It directs the Federal Reserve to regulate and limit merchant interchange fees on debit cards for large issuers with $10 billion or more in assets. The Fed has proposed capping interchange fees at 12 cents, down about 80% from current levels, and requiring either at least two issuers for each debit card, or at least two issuers per method of identity verification (for example, signature and PIN entry).
http://jlne.ws/fMcCGM
Fed's Bernanke: Budget cuts could trim 200,000 jobs
By Mark Felsenthal, Reuters
Federal Reserve Chairman Ben Bernanke said on Wednesday a Republican spending cut plan would not cause a big dent to U.S. economic growth, but could cost around 200,000 jobs.
http://jlne.ws/i6VTZ9
Bernanke: Fed Ready to Tackle Inflation if Necessary
By MICHAEL R. CRITTENDEN And IAN TALLEY, WSJ.com
Federal Reserve Chairman Ben Bernanke, after spending much of the past six months formulating and then defending a new central-bank effort to stimulate the economy, is turning his eyes toward an eventual exit from the program.
http://jlne.ws/dJbjiD
US trade deficit w/China & Korea down, while trade surplus w/Singapore up in Dec 2010
Table
http://ht.ly/46OrQ
US CFTC urged to clarify anti-manipulation rule
By Ayesha Rascoe, Reuters
The U.S. futures regulator must provide more guidance on how it plans to enforce its new anti-manipulation rules or it will be vulnerable to legal challenges, a former commission official said on Tuesday.
http://jlne.ws/i7GgUv
Fannie Mae, Freddie Mac May Be Profitable in 2011, Rosner Says
By Lorraine Woellert, Bloomberg
Fannie Mae and Freddie Mac, the government-sponsored entities that got more than $154 billion in U.S. aid, may return to profitability in 2011, according to Graham Fisher & Co. Managing Director Joshua H. Rosner.
http://jlne.ws/hwigoW
EC official urges OTC derivatives reform
By Jeremy Grant, Financial Times
European regulations to reform derivatives and clearing markets should be extended to exchange-traded derivatives and not limited to over-the-counter (OTC) products, according to the top official in charge of the European Commission’s financial reforms.
http://jlne.ws/e5xwe8
The Fed doves have not caved in
By Gavyn Davies, Financial Times
The combination of a rapidly growing economy, and a surge in oil prices, has raised questions about the strength of the doves’ hand at the Fed. Previously in firm control, the doves had until yesterday been silent about the recent mixture of strong GDP growth and rising headline inflation. Was the case for exceptionally easy monetary policy beginning to fray at the edges? Not in the mind of New York Fed President Bill Dudley, who is among the most eloquent spokespersons for the dovish standpoint.
http://jlne.ws/gPrr4d
Economists list U.S. budget deficit as No. 1 worry
Reuters
The massive U.S. budget deficit is the gravest threat facing the economy, topping high unemployment and the risk of inflation or deflation, according to a survey of forecasters released on Monday.
http://jlne.ws/g2kD9j
Sovereigns turn to pre-crisis financial wizardry
By Anousha Sakoui, Financial Times
Warren Buffett, one of the world’s most respected investors, labelled them “weapons of mass destruction”. In the wake of the financial crisis, various policymakers and regulators chimed in to demonise derivatives, along with structured finance and hedge funds, as causes of the turmoil.
http://jlne.ws/eZiIDI
SEC wants RI bond transactions list
WPRI Providence
The Rhode Island General Treasurer's office says the U.S. Securities and Exchange Commission has asked for a list of all bond transactions from the state since 2007 that included disclosures about state retirement plans.
http://jlne.ws/hmjIYR
Credit Card Data Tells Mixed Story
By STEPHANIE CLIFFORD, NY Times
While the average debt on credit cards in December decreased by 4 percent compared with the same month a year before, Americans still carried an average of $4,284 on credit card statements in December 2010, according to data released this week by the credit monitoring company Experian.
http://jlne.ws/hScXa5
Special Report: In derivatives trade, RIP OTC?
By Huw Jones, Reuters
To get a measure of what financial markets think about plans to make trading in derivatives more uniform and transparent, ask no further than the regulators themselves. Thomas Huertas, a senior UK Financial Services Authority official, said recently that unless the plans to centralize trillions of dollars' worth of contracts were thought through carefully, it could be a bit like "putting a Chernobyl in the back yard."
http://jlne.ws/evGsAp
So Many Regulations, So Little Time
By SCOTT D. O'MALIA, WSJ.com
The Commodity Futures Trading Commission (CFTC) has embarked on a radical restructuring of the over-the-counter (OTC) derivatives market, at a pace that hardly allows us to even consider the impact of our new rules. We owe it to the markets we regulate, and to the American people who rely on them, to slow down and develop a carefully considered plan to carry out our mission. I believe we should not vote on any more final rules until the commission settles on an implementation strategy and a timeline that are realistic.
http://jlne.ws/fAcp2H
Goldman to Win Fed Blessing to Repay Berkshire, Buffett Says
Bloomberg
The Goldman Sachs stake and a $3 billion investment in General Electric Co ., each of which pay 10 percent annual interest to Berkshire, will likely be terminated by Dec. 31, Buffett said Feb. 26 in his annual letter. While the Fed has held back Goldman from repaying, the regulator "will likely give Goldman the green light before long," Buffett wrote.
http://jlne.ws/ffQGYR
Obama Aides Say Social Security No Threat to Nation's Finances
Bloomberg
Obama administration officials are rejecting the idea of making major changes to Social Security as part of a debate over reining in the national debt, a stance that’s drawing protests from deficit-cutting advocates.
http://jlne.ws/gvBa6A
Statement On Support Of The Dodd-Frank Rulemaking Of CFTC Chairman Gary Gensler
Press Release
I support the proposed interpretive order regarding disruptive practices on designated contract markets or swap execution facilities. Congress expressly prohibited three trading practices that it deemed were disruptive of fair and equitable trading. Today’s order provides additional guidance to market participants and the public on the trading, practices and conduct that violate these statutory provisions. The order also addresses comments received by the Commission at the December 2nd roundtable and in response to the Advanced Notice of Proposed Rulemaking on disruptive trading practices. The order addresses the comments by clarifying how the Commission will interpret and implement the provisions of Section 747. I look forward to hearing from the public in response to this proposed interpretive order. The comment letters and staff roundtable were extremely helpful in formulating this proposed order.
http://jlne.ws/g0x8g3
Rise in crude propels gold to record high
By Dave Shellock, FT.com
Simmering tensions in the Middle East kept oil prices elevated and gold at record levels, creating an extremely nervous and volatile backdrop for equities amid concerns about the potential for rampant energy costs to derail the global recovery.
http://jlne.ws/icSwH7
Events
Fixed Income Conference
March 7, 2011
FINRA's Annual Conference Focuses On Market Impacts On Fixed Incomes and How Regulators And Firms Are Responding - New York
http://www.finra.org/Industry/Education/ConferencesEvents/FixedIncomeConference/index.htm
The 36th Annual International Futures Industry Conference
March 15-18, 2011
FIA's Annual Convention - Boca Raton
http://www.futuresindustry.org/boca-2011-program.asp
SIFMA 2nd Annual Private Client Conference
Apr. 7 and 8, 2011
SIFMA's Conference For Private Client Groups At All Levels - New York
http://www.sifma.org/events/event.aspx?id=22289
Fixed Income Summit
Apr. 28, 2011
Pensions & Investments' One-Day Conference - Chicago
http://www.pionline.com/conferences/fixed-income/2011/register
2011 Morningstar Investment Conference
June 8-10, 2011
Morningstar's Conference For Leaders From Across The Investment Industry - Chicago
http://advisor.morningstar.com/products/mstr_conference.asp
Economic News
February Sales: How Retailers Fared
By Phil Izzo, WSJ.com
Many large retailers reported their February sales numbers this week, with most of them coming out the morning of Thursday, March 3.
http://jlne.ws/hiYOme
ISM non-manufacturing index for Feb.
By Greg Robb, MarketWatch
The Institute for Supply Management's non-manufacturing index for February is due to release at 10:00 a.m. Eastern. Economists polled by MarketWatch expect the survey to hold steady at the five-year high of 54.9% reached in January. Any reading above 50 indicates economic expansion
http://jlne.ws/hlkQtx
U.S. private payrolls up 217,000 in February
By Ruth Mantell, MarketWatch
U.S. private-sector employment jumped in February, and the recent pace of gains has been speeding up, according to Automatic Data Processing Inc.’s employment report released Wednesday.
http://jlne.ws/erG6XN
Firms & Banks
Quantitative Brokers Introduces Cointegration Model for Algorithmic Execution of Eurodollar Futures
Quantitative Brokers, a fixed-income algorithmic executing broker, released a cointegration model for clients trading Eurodollar futures using its Bolt and Strobe algorithms. The model monitors the prices of the front two years of the Eurodollar complex to look for short-term departures from equilibrium. It then generates a price prediction signal for each individual Eurodollar contract, which is dynamically updated throughout the trading day and applied to the algorithms’ real-time order placement logic.
http://jlne.ws/e7mTD4
Fitch Assigns SSgA USD Government Liquidity Fund 'AAAmmf' Rating
Fitch Ratings-London-01 March 2011: Fitch Ratings has assigned the newly launched State Street
Global Advisors Liquidity PLC - SSgA USD Government Liquidity Fund managed by State Street
Global Advisors (SSgA) a 'AAAmmf' rating.
Fitch Ratings-London-02 March 2011: Fitch Ratings has assigned the following offshore money
market funds managed by State Street Global Advisors (SSgA) 'AAAmmf' ratings:
State Street Global Advisors Liquidity PLC - SSgA EUR Liquidity Fund
State Street Global Advisors Liquidity PLC - SSgA GBP Liquidity Fund
State Street Global Advisors Liquidity PLC - SSgA USD Liquidity Fund
Sensitive' attack by hackers jolts Morgan Stanley
San Francisco Chronicle
Morgan Stanley experienced a "very sensitive" break-in to its network by the same China-based hackers who attacked Google's computers more than a year ago, according to leaked e-mails from a cyber-security company...
http://jlne.ws/hRMAvk
Citi under fire over disclosure
By Francesco Guerrera, Financial Times
Citigroup has come under attack from a prominent analyst and accountancy experts for failing to disclose regulatory criticism of the bank’s valuation of troubled securities during the financial crisis. Newly released documents show that on February 14 2008, the Office of the Comptroller of the Currency, one of Citi’s main regulators, expressed concerns about the way Citi valued mortgage-backed securities.
http://jlne.ws/i6paPe
Goldman Tallies Possible Litigation Losses
BY LIZ MOYER AND BRETT PHILBIN, WSJ
Goldman Sachs Group Inc. could lose as much as $3.4 billion in damages and other litigation-related matters involving securities it underwrote in the last few years for which the purchasers are now suing to recover losses or to force the firm to buy them back.
http://jlne.ws/glBT2F
Meet the new UBS wealth investment chief
eFinancial News
Alexander S Friedman, who was today appointed chief investment officer of UBS Wealth Management, knows a thing or two about managing money for the wealthy; Friedman used to work for the world's third richest man.
http://jlne.ws/eid1Wu
Citigroup CEO Pandit Got $1 Salary in 2010
TheStreet.com
Citigroup Chief Executive Officer Vikram Pandit received a salary of $1 in 2010, according to a regulatory filing with the Securities and Exchange Commission. Pandit didn't any other stock or bonus compensation either for the year, even though Citigroup shares are up nearly 40% in the past year. Still, the stock hasn't been able to make more than fleeting headway above $5 ...
http://jlne.ws/haYL3s
Barclays buying Egg credit card business
MarketWatch
U.K. bank Barclays PLC said Tuesday that it has agreed to acquire the U.K. credit card assets of Citigroup's Egg Internet banking unit for an undisclosed sum. Barclays said the deal covers around 1.15 million credit card accounts with roughly 2.3 billion pounds ($3.7 billion) of gross receivables. Group Financial Director Chris Lucas said the deal has been priced "at a ...
http://jlne.ws/hyYK9A
Citigroup withdraws from MBIA restructuring case
Reuters
Citigroup Inc on Monday withdrew from lawsuits challenging MBIA Inc's 2009 restructuring, leaving 11 other companies to pursue claims against what was once the world's largest bond insurer.
http://jlne.ws/gwHUM3
HSBC’s London bankers earn 40% less
By Sharlene Goff, Financial Times
Senior HSBC bankers in Asia and other emerging markets earned almost 40 per cent more than their London-based colleagues last year, highlighting the pressure on pay in markets such as China and Latin America.
http://jlne.ws/hWQamO
Report: JP Morgan in investment talks with Twitter
By Ariana Eunjung Cha, The Washington Post
JP Morgan is reportedly in talks with Twitter to buy a minority stake in the micro-blogging site. Neither will comment on the talks, but anonymous sources confirmed to the New York Times, the Financial Times and the Wall Street Journal that the investment by JPMorgan's $1.22 billion digital growth fund would value Twitter at more than $4 billion.
http://jlne.ws/hwnwF5
Freddie Mac Executive Receives Wells Notice
By BEN PROTESS, NY Times
Securities regulators may soon file civil charges against a top executive at the mortgage finance company Freddie Mac, according to a public filing released on Thursday.
http://jlne.ws/fPLsEM
Banker bashing may 'cost UK £20bn'
Guardian Unlimited
Anthony Browne urged chancellor George Osborne to consider 'severe fiscal consequences' of anti-industry feeling One of Boris Johnson's key aides has warned that banker bashing "is not a joyful, cost-free pastime" and could put the country at risk of losing £20bn in tax revenue. Anthony Browne, who serves as the Conservative mayor's adviser for economic development, urged chancellor George ...
http://jlne.ws/f4VvP5
David Prosser: RBS bonuses do not mask its vulnerability
Independent
Those with a talent for mental arithmetic will have noticed that had Royal Bank of Scotland opted to pay no bonuses at all for last year to its investment bankers, the £950m saved would almost have wiped out the £1.13bn loss it reported yesterday.
http://jlne.ws/hddaSu
A.I.G. Posts $2.2 Billion Loss as Stock Sale Draws Nearer
By MICHAEL J. DE LA MERCED, NY Times
The insurer American International Group reported a $2.2 billion adjusted loss for its fourth quarter on Thursday, as it prepares to sell a big portion of the government’s stake in the company that was gained as part of a huge taxpayer-financed bailout.
http://jlne.ws/hjxsVO
Bankers bonuses down, but Europe still crying
By Denny Thomas and Rachel Armstrong, Reuters
The rancor over bank bonuses means investment bankers across the globe are now getting a higher level of fixed pay but industry groups in Europe still feel their financial sector is facing much tougher rules than the rest of the world.
http://jlne.ws/e47qQ4
Credit Suisse Banker Bagios Helped Cheat IRS While at UBS
Bloomberg
Credit Suisse Group AG banker Christos Bagios helped 150 American clients hide as much as $500 million in assets from U.S. tax authorities when he worked at UBS AG , according to a criminal charge made public yesterday.
http://jlne.ws/f4iNBN
Citigroup Says Four Executives Received $32.4 Million for 2010
BusinessWeek
Citigroup Inc., the third-biggest U.S. bank by assets, said it paid four top executives salaries and bonuses totaling $32.4 million last year.
http://jlne.ws/gEUJ9g
HSBC halts US foreclosures over paperwork errors
Seattle Times
HSBC Holdings PLC is suspending foreclosures in the U.S. after a government review of the lender's procedures revealed problems with the way it handled some home repossessions.
http://jlne.ws/ihxgRC
Buffett's Goldman Investment Was Leaked by Gupta, SEC Says
BusinessWeek
Warren Buffett's decision to invest in Goldman Sachs Group Inc. during the financial crisis was leaked to a hedge fund by Rajat K. Gupta, who was then on the bank's board, U.S. regulators said.
http://jlne.ws/ePsTGI
Citigroup Incurred Losses on 21% of Trading Days Last Year, Filing Shows
Bloomberg
Citigroup Inc., the third-largest U.S. bank by assets, said it had trading losses on 21 percent of the days when markets were open in 2010.
http://jlne.ws/ibGoZb
Citi could face up to $3 billion in Lehman claims
Reuters
Citigroup Inc could face up to $3 billion in claims from the bankruptcy proceedings of Lehman Brothers Holdings Inc , the third largest U.S. bank by assets said in a regulatory...
http://jlne.ws/huv6Kn
Bank of America, Citigroup, Wells Fargo say foreclosure probes may carry major financial tolls
Minneapolis-St. Paul Star Tribune
Probes by state attorneys general and other government agencies into banks' foreclosure practices carry the risk of fines and other major costs, according to regulatory filings from three of the country's biggest banks.
http://jlne.ws/i6s1TG
Northern Rock to offer 90% mortgages
By Sharlene Goff, Financial Times
Northern Rock is poised to launch a range of mortgages offering up to 90 per cent of a property’s value, marking the nationalised bank’s return to riskier lending three years after its collapse and government bail-out.
http://jlne.ws/fK4nIN
HSBC lifts pay-out but cuts profitability
By Patrick Jenkins, Financial Times
HSBC sent a mixed message to shareholders on Monday as it increased its dividend but cut its targeted profitability by a fifth.
http://jlne.ws/hSynJD
HSBC profit tops $13 bln, but misses expectations
Market Watch
Banking giant HSBC Holdings PLC said Monday that its 2010 net profit jumped to $13.16 billion from $5.83 billion a year earlier as the bank generated a profit in every consumer group and region for the first time since 2006. Pretax profit rose to $19.04 billion from $7.08 billion a year earlier as loan impairment charges shrank 47% to $14.04 billion. However, the result ...
http://jlne.ws/gKqM1K
HSBC cuts financial targets, shares fall
Reuters Finance News
HSBC cut its profitability targets due to the cost of tougher global bank regulations on Monday, and disappointed investors as its 2010 earnings came in slightly below analysts' ...
http://jlne.ws/gt9lj9
Bonus News Was So Bad At Deutsche Bank, Their Head CDS Trader Is Moving To Jeffries
Business Insider
It sounds like Deutsche Bank's head of CDS trading and e-trading, Sean George, is going to lead a new derivatives trading initiative at Jeffries and Co, a relatively small bank compared to Deutsche Bank.
http://jlne.ws/fWgKrr
Senior banker joins Barclays exodus
Scotland on Sunday
BARCLAYS Wealth has lost another senior private banker from its Glasgow office, Scotland on Sunday has learned.
http://jlne.ws/fvHs8M
Commercial banks are catching up
eFinancial News
Aesop couldn't have written it better. The shares of traditional, slow-paced "tortoise" retail banks are outperforming fast-paced investment banking "hares", which seem to be taking a nap while investors demand cost cuts and new revenue streams.
http://jlne.ws/hiP5CH
AIG to sell MetLife stock earlier than planned
By Ben Berkowitz and Alina Selyukh, Reuters
Bailed-out insurer American International Group (AIG.N) will sell off its stake in MetLife Inc (MET.N) months earlier than expected, accelerating its repayment of the U.S. government and giving MetLife more control of what had been an overhang for its shares.
http://jlne.ws/eQmNPw
Citigroup Says It May Face $3 Billion in Claims From Lehman
By Linda Sandler, Bloomberg
Citigroup Inc. said it may face demands by Lehman Brothers Holdings Inc. and its defunct brokerage for $3 billion in funds it took around the time of Lehman’s September 2008 bankruptcy filing.
http://jlne.ws/g8wkdA
Regulators
Narayana Kocherlakota Speech: Labor Markets and Monetary Policy -The Federal Reserve Bank of Minneapolis
Press Release
In the 1970s, the United States experienced high inflation and high unemployment simultaneously. That experience made clear that accommodative monetary policy may not always be an appropriate response to high unemployment. In the intervening thirty years, macroeconomists have engaged in a careful reconsideration of the exact role of monetary policy. The main conclusion of this research is that the primary role for monetary policy is to offset the impact of what economists term nominal rigidities — that is, the sluggish adjustment of prices and inflation expectations to shocks...
http://jlne.ws/ga1ogo
Bernanke Repeats Testimony
The Bond Buyer
Federal Reserve Board Chairman Ben S. Bernanke's testimony before the House Financial Services Committee was identical to yesterday's monetary report to the Senate.
http://jlne.ws/foktsO
NFA hires Edward Dasso as new Vice President to head surveillance program for swap execution facilities
Press Release
March 1, Chicago - National Futures Association has hired Edward Dasso as Vice President of Market Regulation, a new position created to oversee the surveillance of swap execution facilities (SEF). Dasso comes to NFA from the InterContinental Exchange, where he served as the Manager of Market Regulation. Dasso previously spent several years at NFA as the Managing Director of Trade Practice and Market Surveillance (TPMS).
http://jlne.ws/ikAZ0Z
US regulators discuss tougher mortgage rules
By Suzanne Kapner in New York, Financial Times
Regulators have tentatively agreed on stringent new rules that will require lenders to retain a greater portion of loans they originate, instead of selling most of them to investors, a practice that helped to create the housing bubble, according to a person familiar with the situation.
http://jlne.ws/dNyFv9
Bullard: Economy Looking Better - Video, CNBC.com
Video
http://jlne.ws/dOVQk2
Fed's Yellen: Would respond to sustained rise in core
Reuters
Federal Reserve Vice Chair Janet Yellen said on Friday that U.S. central bank officials would react if inflation expectations or underlying inflation show persistent gains and began to show up in other prices.
http://jlne.ws/gAyZyN
Funding regulators
Financial Times
The Dodd-Frank financial regulation law passed in July 2010 was a far-reaching effort to promote financial stability. Whether the legislation can achieve that goal, though, depends on how it is implemented. On this, there are some worrying signs. The House of Representatives has voted to cut funding by a third to the Commodity Futures Trading Commission. It also stripped $25m from the Securities and Exchange Commission. Squeezing two of the most important regulators jeopardises the progress made in creating a safer financial system.
http://jlne.ws/gaEmwf
John C. Williams Named to Lead San Francisco Fed
WSJ.com
Dr. John C. Williams has been appointed president and chief executive officer of the Federal Reserve Bank of San Francisco, according to an announcement by Douglas W. Shorenstein, chairman of the San Francisco bank’s board of directors. Dr. Williams, whose appointment is effective today, has been executive vice president and director of research at the San Francisco Federal Reserve Bank since 2009.
http://jlne.ws/dI5GwC
Global News
ECB announces details of refinancing operations with settlement from 13 April to 12 July 2011
Press Release
The Governing Council of the European Central Bank (ECB) has today decided to continue conducting its main refinancing operations (MROs) as fixed rate tender procedures with full allotment for as long as necessary, and at least until the end of the sixth maintenance period of 2011 on 12 July 2011. This procedure will also remain in use for the Eurosystem’s special-term refinancing operations with a maturity of one maintenance period, which will continue to be conducted for as long as needed, and at least until the end of the second quarter of 2011. The fixed rate in these special-term refinancing operations will be the same as the MRO rate prevailing at the time.
http://jlne.ws/i9UjgD
Bank Leumi to buy 13.5% stake in food firm Tnuva
Reuters
Israel's Bank Leumi (LUMI.TA) said on Wednesday it signed a deal to buy a 13.5 percent stake in Tnuva, Israel's largest food company, for 388.5 million shekels ($107 million).
http://jlne.ws/esCgCE
Spain's Caja Madrid merger relaunches as Bankia
By Jesus Aguado and Sonya Dowsett, Reuters
Spain's biggest savings bank by assets, the Caja Madrid-led merger of seven lenders, relaunched under the name Bankia on Wednesday in the latest step of Spain's banking overhaul.
http://jlne.ws/i0fGbd
King pledges radical change on bank scrutiny
By Brooke Masters, Financial Times
The Bank of England will take a “radically different approach” to supervising the UK’s biggest financial institutions by calling on senior officials to challenge executives on strategic decisions, Mervyn King, the Bank’s governor, said.
http://jlne.ws/gaePHV
Europe wary of rethink over Irish bail-out
By Peter Spiegel and John Murray Brown, Financial Times
Sentiment in some European capitals has turned against renegotiating Dublin’s E85bn bail-out package, casting into doubt the incoming Irish government’s push to ease the repayment terms.
http://jlne.ws/fV8gOb
Bullish noises from Thailand
By Emma Saunders, FT.com
Expect another rate rise on March 9 – maybe even by 50bp. Assistant Governor Paiboon Kittisrikangwan told reporters today that interest rates are still too low, and that “normalisation” will continue if inflation keeps rising.
http://jlne.ws/eXOh8n
World's Biggest Pension Fund Will Likely Be Net Seller of Japanese Bonds
Bloomberg
Japan's public pension fund, the world's largest, said it may become a net seller of bonds to cover payments in the world's most rapidly aging society.
http://jlne.ws/hlbWfL
TOKYO AIM Announces Draft Rules for the TOKYO PRO-BOND Market
Press Release
TOKYO AIM, Inc. (“TOKYO AIM”) today published the draft rules and regulations for its new bond market for professional investors, the TOKYO PRO-BOND Market. The rules and regulations as well as a Q&A document were developed based on the comments made during the initial public consultation period on the outline framework published on November 10, 2010.
http://jlne.ws/geMQhH
Irish bank transfers approved
By John Murray Brown in Dublin, Financial Times
Ireland’s bank restructuring took another step forward on Thursday with the government approving the transfer of deposits from Anglo Irish Bank and Irish Nationwide Building Society, the nationalised institutions most affected by the collapse of Ireland’s property market.
http://jlne.ws/fVHnJr
Swiss central bank discord provides a warning bell
By Gillian Tett, Financial Times
In normal times, investors spend little time contemplating the political status of the Swiss National Bank. Now, however, they should – particularly given that geopolitical turmoil is causing the Swiss franc to soar.
http://jlne.ws/ftPN23
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