Posts Tagged ‘Financial Services’
By Annalyn Censky @CNNMoney
NEW YORK (CNNMoney) — One Fed official owns thousands of acres of farmland and at least $1 million in gold. Many own individual blue chip stocks, while another appears to hold no major assets other than his home and an employee benefit plan.
Americans got an unprecedented peek at the wealth of the Federal Reserve’s top ranks this week, when the central bank released nearly 600 pages of financial disclosure documents from its current regional presidents.
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EU DATA PROTECTION OVERHAUL TO IMPOSE NEW BURDENS ON BANKS
Financial services firms and credit card processors will be obliged to report incidents of lost or stolen data within 24 hours of a breach, according to new EU rules set to be introduced Wednesday.
Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=23347
EUROPEAN EXCHANGES AND VENDORS DEVELOP POST-TRADE STANDARDS
A consortium of exchanges and technology suppliers have developed a set of common standards designed to restore post-trade transparency in the European equity markets.
Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=23348
COMMERZBANK AND CAPCO BID TO MODEL IT COMPLEXITY
Commerzbank has embarked on a project with consultancy Capco to develop an ‘IT complexity model’ that can be used by CIOs to measure and then master their organisation’s technology.
Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=23346
MASTERCARD MOBILE APP LETS AUSSIE MOVIE-GOERS ORDER FOOD FROM THEIR SEAT
MasterCard has teamed up with Commonwealth Bank and cinema group Hoyts to pilot a mobile payments application that lets movie-goers order food and drinks directly from their seats.
Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=23345
Below is a a chart of Italian bank equity performance. Countrywide bank run next?
Whether the reason for the sell off is due to a typoed GOFO 12M SocGen print or there is a fundamental reason, remains to be seen, but US equities are not taking the risk. US stocks have wiped out all of yesterday’s last minute gains.
Panic In Italy: FTSE MIB Down 6.2%, Biggest Drop Since May 2010
Remember when we said yesteday that the FTSE MIB won’t have a good day today? It isn’t…
Submitted by Tyler Durden
“With all the mess going on at the moment, I thought it was worth while stepping back a little and trying to look at the bigger picture.” So begins Andy Lees’ latest must read letter to clients whch explains succinctly virtually the entire story of where we were, how we got to where are now, how the current trajectory is unsustainable, why due to decades of capital misallocation anything that the Fed does now is essentially irrelevant, why our untenable debt pile does nothing but perpetuate an unsustainable ponzi scheme which will result in an unseen explosion in the true cost of capital: gold, and why the bond market will eventually, and inevitably, force an epic repricing in the cost of non-gold capital absent the arrival of the deux ex machina of real, actionable innovation that the Fed, and all global central planners, keep hoping for. Because the longer we keep plugging away with that worthless substitute, financial innovation, which is anything but, the greater the final collapse. Andy’s conclusion: “Until the debt is cleared and capital starts to be properly allocated, economic growth per unit of additional debt will continue to sour. Until we get some real breakthrough technology, requiring large amounts of capital to both innovate and then roll out, we have no chance of supporting the economy.” Too bad than that this absolutely spot on observation reflect precisely the opposite of what the Fed is pursuing.
Why are we here: simple – years of central planning resulting in the greatest experiment in capital misallocation in history.
We are in this mess because of excessive leverage and excessive consumption, financed by excessively cheap real capital – (not just Bernanke & Greenspan but further back to the end of the gold standard, and in fact even before that as it was this misallocation of capital that forced us off the gold standard in the first place). If capital had been allocated productively, then by definition debt would fall as a percentage of GDP. Total debt may rise, but efficient allocation of capital would always mean the economy would grow faster than the debt as it means you are making a positive rather than negative real return on that capital.
Whichever way you look at it, capital has been massively misallocated for years.
Corporate profits… or massive debt-funded ponzi scheme?
How can that be when corporates report massive profits? The profits are based on paying their workers a salary that meant they could only buy the goods they made by borrowing; in other words, a massive unsustainable ponzi scheme that could only ever end up with default. Without the household debt accumulation, there would be no market to sell their products to, and without paying the workers sufficient, the debt would always have to default.
This required a massive increase in financial innovation to keep the illusion of corporate profitability alive – (household debt was a way of delaying putting the true costs through the corporate P&L account and recognising the costs). Financial sector innovation is itself another form of capital misallocation, taxing people away from real innovation – (to keep the illusion alive, an ever greater percentage of economic output had to be allocated to this illusion machine) – helping add to the resource constraint we are in today.
If financial innovation, which we have so much of is not needed, what is the right kind? And why is it so sorely missing.
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By Dean Henderson
If you want to know where the true power center of the world lies, follow the money – cui bono. According to Global Finance magazine, as of 2010 the world’s five biggest banks are all based in Rothschild fiefdoms UK and France.
They are the French BNP ($3 trillion in assets), Royal Bank of Scotland ($2.7 trillion), the UK-based HSBC Holdings ($2.4 trillion), the French Credit Agricole ($2.2 trillion) and the British Barclays ($2.2 trillion).
In the US, a combination of deregulation and merger-mania has left four mega-banks ruling the financial roost. According to Global Finance, as of 2010 they are Bank of America ($2.2 trillion), JP Morgan Chase ($2 trillion), Citigroup ($1.9 trillion) and Wells Fargo ($1.25 trillion). I have dubbed them the Four Horsemen of US banking.
Consolidating the Money Power
The September 2000 marriage which created JP Morgan Chase was the grandest merger in a frenzy of bank consolidation that took place throughout the 1990’s. Merger mania was fed by a massive deregulation of the banking industry including revocation of the Glass Steagal Act of 1933, which was enacted after the Great Depression to curb the banking monopolies which had caused the 1929 stock market crash and precipitated the Great Depression.
In July 1929 Goldman Sachs launched two investment trusts called Shenandoah and Blue Ridge. Through August and September they touted these trusts to the public, selling hundreds of millions of dollars worth of shares through the Goldman Sachs Trading Corporation at $104/share. Goldman Sachs insiders were bailing out of the stock market. By the fall of 1934 the trust shares were worth $1.75 each. One director at both Shenandoah and Blue Ridge was Sullivan & Cromwell lawyer John Foster Dulles. 
John Merrill, founder of Merrill Lynch, exited the stock market in 1928, as did insiders at Lehman Brothers. Chase Manhattan Chairman Alfred Wiggin took his “hunch” to the next level, forming Shermar Corporation in 1929 to short the stock of his own company. Following the Crash of 1929, Citibank President Charles Mitchell was jailed for tax evasion. 
CFTC Commissioner Bart Chilton has hit back at Republican plans to delay for 18 months all rulemakings involving derivatives under the Dodd-Frank financial regulation law.
Four Republican lawmakers on the Financial Services and Agriculture committees are pressing for legislation to extend the deadlines for fear that the reforms could weaken US market during a time of economic recovery.
While the prospects of the proposals being passed are small, CFTC Commissioner Chilton says such legislation is not needed.
“Regulatory reforms are important to implement correctly, but they are also time-sensitive,” he says. “Hundreds of trillions of dollars in trading remain completely unregulated. It is exactly this “dark” trading that helped lead to a hideous bail-out paid for by taxpayers.”
While acknowledging that regulators may be unable make every deadline required under the reform bill, Chilton adds: “The urgency Congress has already placed on getting reforms implemented is just as important today as it was when this good and needed legislation became law.”
By Andrew Gavin Marshall
The following is an excerpt of a chapter by Andrew Gavin Marshall from the new book by Global Research Publishers, “The Global Economic Crisis: The Great Depression of the XXI Century.”
To understand the historical context of the current crisis, it is pivotal to address the nature of the most vital and powerful force within the capitalist global political economy: the central banking system. One of the least understood, most widely ignored, and mysteries of capitalism, the central banking system, is also the source of the greatest wealth and power, essentially managing capitalism – controlling the credit and debt of both government and industry.
Any notion of a “free market” must be dispelled in its true meaning, for as long as the central banking system has been dominant, central bankers have managed and controlled capitalism for the benefit of the few and at the expense of the many. Comprehending the nature of central banking is necessary in order to understand the nature of the current economic crisis.
The Origins of Central Banking
Central banking has its origins in the development of bank-issued money, which falls under three categories: (1) Deposit money subject to written check or oral transfer; (2) Bank-issued paper money (bank notes); and (3) Bank-issued legal tender paper money. In 1609, the Bank of Amsterdam was founded “as a bank of deposit slipping secretly into the practice of monetary issue towards the middle of the 17th century.” At the same time, “the goldsmiths of England are generally supposed to have introduced both deposit money and the earliest English unofficial bank note.” And importantly, “In Sweden we find what are widely regarded as the first true bank notes in Europe being issued in 1661 by a private bank founded by Johan Palmstruch.”
As early as 1656, “the Bank of Amsterdam violated the one-hundred per cent reserve principle and, thus, created money,” while “the goldsmiths in England became active as lenders in 1640.” Further, the State Bank of Sweden “was founded November 30, 1656, and to Palmstruch, its founder, is attributed the first use of bank bills as credit money, not fully covered by the coin reserve.”
As economist John Kenneth Galbraith explained in Money, “The process by which banks create money is so simple that the mind is repelled. Where something so important is involved, a deeper mystery seems only decent. The deposits of the Bank of Amsterdam just mentioned were, according to the instruction of the owner, subject to transfer to others in settlement of accounts,” and thus “the coin on deposit served less as money by being in a bank and being subject to transfer by the stroke of a primitive pen.” Further, “another stroke of the pen would give a borrower from the bank, as distinct from a creditor of the original depositor, a loan from the original and idle deposit.” Galbraith elaborated:
The original deposit still stood to the credit of the original depositor. But there was now also a new deposit from the proceeds of the loan. Both deposits could be used to make payments, be used as money. Money had thus been created. The discovery that banks could so create money came very early in the development of banking. There was that interest to be earned.
Expanding on this notion of money-creation, economist Rupert J. Ederer explained, in regards to the Bank of Amsterdam, that both the depositor “and a borrower could affect a purchase with the same money at the same time, [thus] we had here some increase in the quantity of money.” However, “the more serious infractions followed when the Bank began to lend money to the government of Amsterdam and eventually succumbed to the temptations offered by the [Dutch] East India Company.” As Ederer articulated, “What this bank did surreptitiously was soon to be institutionalized and to form the essence of a new monetary technique.” Thus, this bank established a “new monetary era”:
A marvelous new power probably equal to the potentialities of the discovery of coinage had evolved. The Bank had created money literally for over a hundred years without being discovered. Even after it was discovered, the Bank could have continued in operation in this new way except for public prejudice. The public was not yet ready to accept a money with no guarantee save the word of public authorities. It had been too seriously and too frequently misled in the past, and, paradoxically enough, it had fled to the banks for a more efficient money. Out of this flight grew the private money creation which is the essence of modern commercial banking.
I think we should start our own banks…Here’s how it will work…Everyone turn in the Federal Reserve notes for newly minted recycled [from old money] bills…Lets break this up and start with states. We’ll start with state rights and while we’re at it, entirely just forget about the “FED Government”…seriously!!!
Let’s start there and take this a little deeper. At this point since no one even knows who owns the paper on most of the real estate out there…we’ll start by granting *amnesty* to all home-owners… That’s right…Just like the old west, stake your claim and it’s yours…We will need to see some kind of loan proof however… Land not owned by an American citizen is hereby confiscated…yup…Ya know that mine the Russians just bought here in WY…Don’t own it anymore…reverts back to it’s original ownership, and if the original owner doesn’t know what to do with it I’m sure there are lots of unemployed people needing jobs and the state would gladly take that off your hands…. hmmmm~jude
Islamic Development Bank, the Jeddah-based multilateral lender, said the Mega Islamic Bank will have an initial paid up capital of $1bn.
Mega Islamic Bank shall provide “liquidity management solutions in an effort to create an Islamic interbank market,” Islamic Development Bank said in an e-mailed statement. The bank will also originate and finance large projects across Muslim countries, IDB said.
Demand for services complying with Shariah is increasing about 15 percent annually and assets under management may almost triple to $2.8 trillion by 2015, according to the Kuala Lumpur based Islamic Financial Services Board, a standards body for the industry.
Nomura International is acting as financial adviser, Norton Rose is the legal adviser and Ernst & Young is consulting on MIB, IDB said
Malaysia is expected to issue one “mega Islamic bank” license by the end of the year, central bank Governor Zeti Akhtar Aziz told reporters in Kuala Lumpur on October 27.
Submitted by Tyler Durden
After German blog “All is Smoke and Mirrors” floated an idea of an organized bank run (something attempted previously in the US without much success) in France in response to French austerity protests (which have resulted in no gains), the effort has since expanded to a pan-European organized bank run day on December 7, 2010, and has metastasized to Italy, Germany, the Netherlands, the UK and Greece. We are confident that very soon the rest of Europe, which is currently gripped in a climate of extremely unpopular austerity, will join in this symbolic protest against banking, which unlike the US, may just succeed, considering the European banking system is in total shambles, and in far worse shape than its American counterpart.
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ECB CALLS FOR MANDATORY SEPA MIGRATION DEADLINE
The European Central Bank (ECB) says self-regulation on Sepa has not achieved the expected results and is calling on legislators to now set a mandatory migration timeline.
Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=21923
EUROPEAN BANKS NEED BETTER INTEGRATED RISK MANAGEMENT – SURVEY
European financial services firms are not placing enough emphasis on risk management when it comes to decision-making and performance, while IT systems are struggling to cope with increased regulatory demand, according to research commissioned by Oracle.
Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=21926
CORPORATES WILLING TO PAY MORE FOR BETTER SERVICE FROM BANKS – SURVEY
Over two thirds – 68% – of corporates would consider switching banks for better
customer service around on-boarding, account maintenance and query handling,
a 24% rise on the previous year, according to a survey from Finextra Research and Pegasystems.
Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=21925
SGX IN ASX TAKEOVER TALKS – REPORT
The Singapore Exchange (SGX) is set to make a takeover offer for the Australian Securities Exchange (ASX), according to local press reports.
Full story: http://www.finextra.com/news/fullstory.aspx?newsitemid=21924
- Barclays Going On Egg Hunt According to Reports (pindebit.blogspot.com)
- Singapore bourse makes $8.3B offer for ASX (seattletimes.nwsource.com)