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Regulating financial innovation

Regulating financial innovation

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

Basel in America

JPMorgan increases its op risk capital

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

Niedrigzinsangst

Wiesbaden Hof

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

Lost Lobos

Lost Lobos

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

Review: In the Light of What We Know

In The Light Of What We Know

by Zia Haider Rahman

(Picador 2014)

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

Through the eyes of a speculator

merger probabilities

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.

Continued