Call for alteration to investment bank rules
by Dave Nixon
Story link: Call for alteration to investment bank rules
Regulators should in future compel investment banks to finance themselves with longer-term debt, a requirement that would direct them to decrease their overall leverage, Don Kohn, Federal Reserve vice-chairman, said on Thursday.
The number two official at the US central bank said this would be expensive for shareholders but would make the financial system more secure [...]
Investment banks eye CDS clearing house
by Dave Nixon
Story link: Investment banks eye CDS clearing house
Deutsche Bank and other investment banks are working on strategy to develop a clearing house for the credit derivatives markets in an attempt to calm growing regulatory and investor fears about “counterparty risk”.
Specifically, the banks are trying to develop a format that would only allow institutions with sturdy capital bases and credible trading histories to [...]
Citigroup’s Pandit declares major cost cuts
by Dave Nixon
Story link: Citigroup’s Pandit declares major cost cuts
Vikram Pandit, Citigroup’s chief executive, has vowed to cut the under pressure financial group’s cost base by up to 20 per cent, deepening worries that Wall Street and the City of London are about to be hit by tens of thousands of additional job losses.
Mr Pandit, who took over Citi in December, specified cuts [...]
Citigroup writes down $15.1bn
by Gill Montia
Story link: Citigroup writes down $15.1bn
Citigroup has reported a net loss of $5.1 billion for the first quarter of 2008, after writing down $15.1 billion (of which $6 billion related to sub-prime exposures).
The bank’s losses from the credit crunch now amount to around $33 billion.
The results were worse than expected, with analysts having predicted a loss of $4.75 billion for [...]
Lloyds TSB wins best bank award
by Richard Kilner
Story link: Lloyds TSB wins best bank award
For the fourth consecutive year Lloyds TSB has been given the award of Bank of the Year.
The award is given by British finance directors to the bank that is seen to give excellent service to both commercial and corporate customers.
On Tuesday the award was presented by CBI director-general Richard Lambert to Diana Brightmore-Armour and John [...]
RBS considers rights issue
by Gill Montia
Story link: RBS considers rights issue
Royal Bank of Scotland (RBS) is drawing up plans to shore-up its balance sheet with a rights issue.
The move has been widely predicted because on the eve of the credit crisis, RBS stretched its reserves by heading a consortium that acquired ABN Amro, the Dutch bank.
In addition, it has written down £2.6 billion in [...]
City job losses mount
by Gill Montia
Story link: City job losses mount
Earlier this week, investment bank JP Morgan predicted that the credit crisis could result in 40,000 job losses in London’s financial services sector, during 2008 and 2009.
Yesterday Merrill Lynch announced a 4,000 headcount reduction worldwide, giving rise to estimates that 400 jobs could go at the brokerage’s offices in the capital.
Citigroup is expected to writedown [...]
BBA expedites Libor review
by Gill Montia
Story link: BBA expedites Libor review
The British Bankers’ Association (BBA) has announced that it is bringing forward its review of the way in which it calculates the London Interbank Offered Rate (Libor), the interest rate at which banks lend to one another.
Three month Libor has seen record high levels since the onset of the credit crisis, and has remained high [...]
4,000 jobs at risk as Merrill Lynch writes down $6bn
by Gill Montia
Story link: 4,000 jobs at risk as Merrill Lynch writes down $6bn
Merrill Lynch, the New York-based stock broker, has recorded a loss of $1.96 billion for the first quarter of 2008, compared with a net profit of $2.16 billion in the first three months of 2007.
The firm has added $6 billion to the $24 billion already written down since the onset of the sub-prime mortgage crisis, [...]
World Bank commits to gender equality
by Richard Kilner
Story link: World Bank commits to gender equality
Robert Zoellick, president of the World Bank, has declared the institution has six World Bank Group commitments to gender equality.
The announcement was made at the Ways to Bridge Gender Gaps event where Zoellick joined ministers from a number of countries, including Germany and Denmark, in calling for developing countries to consider the status of women [...]
KCB to raise capital for expansion
by Richard Kilner
Story link: KCB to raise capital for expansion
Yesterday the Kenya Commercial Bank formally approached the Capital Markets Authority (CMA) requesting permission to raise capital through the means of a rights issue.
The KCB is the largest home-grown bank in the region, and is embarking upon a strategy to broaden its infrastructure, and thereby reach a greater number of customers.
Martin Oduor-Otieno, KCB Group’s chief [...]
Treasury prepares for £40bn bank bail out
by Gill Montia
Story link: Treasury prepares for £40bn bank bail out
The Treasury and the Bank of England are preparing plans to bring relief to the UK mortgage industry.
Although discussions are ongoing, it is clear that a successful strategy will require the injection of a huge amount of cash and reports of even £40 billion in assistance are being followed by provisos that this may not [...]
JPMorgan reports 50% drop in profit
by Gill Montia
Story link: JPMorgan reports 50% drop in profit
US investment bank, JPMorgan Chase, reported a 50% drop in profit in the first quarter of 2008.
Results were in line with analysts’ expectations with profit falling to $2.37 million, compared with $4.79 million in the first quarter of 2007.
The bank said the decline was largely as a result of a $5.1 billion writedown on its [...]
600,000 Britons unable to refinance debt
by Gill Montia
Story link: 600,000 Britons unable to refinance debt
TDX Group, the debt management analyst that provides services to the corporate sector, has published an alarming report that suggests nearly 600,000 Britons will be unable to refinance their debts this year.
According to the report, around one million Britons have collectively amassed £25 billion of unsecured debt that they cannot repay, giving an average financial [...]
Halifax ignores government calls for cut
by Richard Kilner
Story link: Halifax ignores government calls for cut
The largest mortgage lender in the UK, the Halifax, has ignored calls by the government to pass on a recent cut in interest rates to customers.
The Halifax has increased its two year fixed rate and tracker mortgages by 0.5%, citing rising funding costs as the reason.
However, the bank did retain its present rates for its [...]
Wachovia Corp posts shock $393m loss
by Richard Kilner
Story link: Wachovia Corp posts shock $393m loss
Wachovia Corp, America’s fourth biggest bank, has recorded a surprise first quarter loss of $393m.
The shock result is being attributed to credit issues, particularly with mortgages.
In response to the loss, Wachovia is reducing its dividend to save $2bn per annum and seeking to raise $7bn in capital through a stock offering.
Nor was the bank helped [...]
“Phishing” increases as online consumers wise-up
by Gill Montia
Story link: “Phishing” increases as online consumers wise-up
Apacs, the organisation that represents payments services providers, has reported that the level of activity committed by criminals engaged in “phishing” is on the increase.
The overall extent of bank fraud in the UK has declined over the past year but the number of people receiving e-mails purporting to be from their bank and asking for [...]
JP Morgan internal report predicts 40,000 City job losses
by Gill Montia
Story link: JP Morgan internal report predicts 40,000 City job losses
What is now widely recognised as a global financial crisis unlike any other, could cost up to 40,000 jobs in London’s financial services sector during 2008 and 2009.
Investment bank, JP Morgan, is predicting that the fall out from the credit crisis could mean that one in 10 of the capitals financial sector jobs will go.
The [...]
Bush responds to World Bank plea for action
by Richard Kilner
Story link: Bush responds to World Bank plea for action
President Bush has ordered $200m in emergency food aid to help the most impoverished nations.
His move comes as a response to the World Bank and IMF concern raised over soaring food prices across the globe, which has seen civil unrest in various countries and multiple deaths from rioting in Haiti.
Robert Zoellick, the president of the [...]
Germany’s economic confidence falls
by Richard Kilner
Story link: Germany’s economic confidence falls
April saw Germany’s ZEW economic sentiment indicator suffer a substantial fall, slumping from -32 in March to -40.7 this month.
The indicator is based upon a survey of industry analysts and investors, and has typically had an average value of 30.
A survey conducted by Reuters forecast a small improvement to -29.0, instead of which the ZEW [...]
