Imagine in 2004, when Goldman Sachs and Deutsche Bank structured the first fully synthetic ABS CDOs, there had been a public consultation on the social value of the products. Or if a consultation had taken place when UK banks began selling interest rate swaps to small British companies, with the banks being forced to explain … Continued
Citigroup’s announcement last week that it would be restating its latest results downwards by $600 million to reflect the likely impact of regulatory probes into foreign exchange rigging prompted some bemused commentary. Matt Levine at Bloomberg wittily characterised it as ‘going back in time to lose more money’.
Amid the attention … Continued
Why can’t the ECB bring itself to stress test banks for deflation? I was thinking about this question when I remembered an episode from the past.
Just over ten years ago, I took a train from Frankfurt to the sleepy spa town of Wiesbaden. It was the sort of place where a lone taxi is … Continued
For as long as most people can remember, UK municipal finance has been safe and boring. In the wild days of the 1980s, Hammersmith & Fulham council almost went bust speculating in derivatives, and was saved by a landmark House of Lords ruling. Since then, UK council borrowing has been tightly constrained by … Continued
by Zia Haider Rahman
What kind of fiction do they read at Goldman Sachs? A trader I know there recently recommended In the Light of What We Know, Zia Haider Rahman’s debut novel. I could see why he was intrigued when I picked the book up. Its two main characters study mathematics and physics … Continued
by Timothy F Geithner
(Random House 2014)
If you had perfect foresight and were going to pick the best regulator or policymaker capable of dealing with the global financial crisis and its aftermath, whom would you choose? You’d probably want someone with a track record of dealing directly with crises, perhaps in emerging markets, and … Continued
Outside of financial crises, mergers and acquisitions are the closest the stock market comes to high drama. Companies in play engage with investors and the public using a well-rehearsed script: Acquirers woo target shareholders while target companies publicise the value of independence. The biggest, most dramatic takeovers can involve antitrust regulators and politicians as well.
Junk bond funds are seeing record outflows. This has been described as a ‘six-sigma event’, in other words, six standard deviations away from the mean weekly flow, something that if normally distributed should only be expected once in millions of years.
By definition that’s unusual, but in the context of broader investment in … Continued
A bank whose bailout costs £45 billion deserves to have more than one book written about it. In September 2013 we had Iain Martin’s Making It Happen (see my review here), and now fellow Scottish journalist Ian Fraser has published Shredded.
Fraser’s 500-page book piles on the detail as we meet … Continued
On the fourth anniversary of the Dodd-Frank Act, the big US banks are still black boxes in terms of their trading activity. However regulators are now getting a bit more information. Over the last month, the big banks have started providing them with so-called reporting metrics under the Volcker Rule, so that the … Continued