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UBS reckons it has a hit upon a ‘unique formula’ for growth as it expands its investment banking offering to its high net worth clients, writes David Rothnie. -
The Euro Short Term Rate may be running into the first real problem of its short life. The benchmark was designed to provide a reflection of wholesale euro overnight borrowing costs based on real transaction data. But what if there aren’t enough transactions?
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The coronavirus crisis has reshaped many aspects of finance, but not the line-up of top investment banks. It does appear to have pressed some firms into sharp decisions, though.
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Société Générale and Natixis have purged their senior ranks following second-quarter losses and to prepare for strategic revamps, but David Rothnie thinks the future will remain challenging for both.
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Some argue that innovation has taken a backward step in the pandemic with the loss of people working in close proximity bouncing ideas off each other. But that’s not the case in the capital markets. In fact, working remotely in such a vast but archaic business has brought the use of technology to the centre of discussions.
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The coronavirus crisis is a further reminder that fundamentals are not the only thing that matters when investing in bank capital.
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Credit Suisse chief executive Thomas Gottstein has brought its investment bank back together but threatens to leave it with a diminished corporate finance business, David Rothnie reports.
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The auditor for digital bank Monzo warned that a slower than expected recovery could lead it to breach its capital requirements, even though at the end of February it had a much better capital ratio than traditional banks. So what’s going on? GlobalCapital wonders if the risk is more about investors’ appetite to continue funding an unprofitable business than the bank breaching the requirements in the next few months.
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The Single Supervisory Mechanism has been making all the right moves during the coronavirus crisis.
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A prospective improvement in the European Central Bank’s deposit tiering facility mitigating the punitive impact of negative rates should be bad for covered bonds, 95% of which are negative-yielding. However, the unprecedented scale of reserves held on deposit with the central bank implies that many key investors will still be looking for anything that pays more than its deposit rate of minus 0.5%.
