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HSBC’s investment banking aspirations are growing while the competition retrenches, writes David Rothnie.
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Intesa Sanpaolo’s decision to remove the call options from several lower tier two securities to optimise their capital treatment under Basel III has stunned the market. But it makes absolute economic sense — and it’s high time everyone accepted that.
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Blog was distressed to hear of more staff cuts in the City this week (not naming any names... UBS). We’re sure there are some psychopaths out there who relish dismissing staff — perhaps inviting them into the dreaded meeting room with a wide-eyed grin and promising them a promotion before letting out an uncontrollable, Patrick Bateman-style cackle and slamming the door in their face — but for normal, compassionate people, it can’t be a particularly enjoyable experience.
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The European Council hopes to charge towards banking union later this week, “sprinting” ahead with plans to make the ECB the single supervisor. But it should not press on blindly: a well-designed banking union is far preferable to one thrown together in haste.
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Morgan Stanley wants to maintain close relations with departing M&A star Simon Robey, but the time is also ripe for the firm to promote its new breed of dealmakers, argues David Rothnie
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A proposal in the Liikanen report that bankers should be paid partly with bail-inable debt is intended to build on existing attempts to align decision-making with long-term performance. At first glance, the idea might appear unfair, but it could help keep management on the right track in times of crisis.
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The European Stability Mechanism’s entry as a short term debt investor later this month is likely to push already low yields down even further. With money market funds struggling in this environment, more could close — leaving issuers with a diminished natural investor base.
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European issuers have lunged into tier two issuance in recent months, satisfying both a bid for yieldy paper and an urgent need for capital. But while deals will continue to tick over, a return to pre-crisis levels of supply is still some way off.
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The ghostly form of the UK’s small business development bank is becoming visible. One can guess how it might work. But government rhetoric that it will unlock a dammed flood of credit to thirsty Bill Gates types is misleading. Modest and careful assistance can help SMEs. Thinking of this as a macro stimulus splurge will end in tears.
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A disappointing Pfandbrief on Tuesday may be the signal that the dash for core assets might have run its course. Whatever the news on Spanish banks later this week, peripheral and unloved sectors like ABS might be ripe for a rush of buying.