Fitch Ratings in its report feels an increase in the interest rate would adversely impact bank’s capital under the proposed Basel III framework for U.S. banks. The recent increase in U.S. Treasury yields and speculation of Federal Reserve exiting bond buying program would accentuate potential risks faced by U.S. banks, according to Fitch Ratings. Interest Rate Rise Would Affect Banks’ Bond Portfolio U.S. banks are holding significantly large bank capital to conform to the...
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China’s benchmark rate Shanghai Interbank Offered Rate (Shibor) has jumped dramatically over the past few weeks, highlighting the liquidity squeeze in the world’s second largest economy. The three month Shibor rate stood at 5.329 percent on Tuesday, but it had spiked to 6.9 percent on Friday. In a research report Citigroup analyst Gary Lam said that Shibor one-month has surged from 1H13 running average of 3.9 percent to about 7 percent. Though reserves adjustments...
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Citigroup Inc (NYSE:C) analyst William Katz today downgraded the rapidly growing EFT WisdomTree Investment, Inc. (NASDAQ:WETF) from Buy to Neutral in a research report sent to clients. However, Wall Street isn’t worried about the downgrade as the stock is up about 3 percent in the afternoon session. Upside Potential Already Discounted William Katz said the primary reason behind the downgrade is the stock’s valuation. WisdomTree Investment, Inc. (NASDAQ:WETF)’s stock price has almost doubled this year so far. That prompted Citigroup Inc...
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Standard & Poor’s said Tuesday that most of the biggest U.S. banks are still “too big to fail.” The credit rating agency said that the U.S. government is unlikely to bail out big banks in the event of another crisis. That means the holding company creditors have to bear losses in the case of a collapse. S&P recently upgraded the U.S. credit outlook to stable from negative. Since the 2008 and 2009 bank rescues,...
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Traders at some of the world’s leading banks have reportedly engaged in manipulative practices to rig forex rates, according to a Bloomberg report. Quoting five people having knowledge of the foreign-exchange market practice, Lim Vaughan, Gavin Finch and Ambereen Choudhury of Bloomberg reports the banks’ employees have been accused of rigging WM/Reuters rates before and during the 60-second windows when the benchmarks are set. Forex Rates According to the report, dealers colluded with counterparts...
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Citigroup Inc (NYSE:C) could lose $5 billion to $7 billion in regulatory capital, if the dollar strengthens against major currencies, including in emerging markets, Charles Peabody predicts. Charles Peabody’s Feelings For Citigroup Charles Peabody, who leads research at Portales Partners LLC, feels Citigroup Inc (NYSE:C)’s over 50 percent reliance on revenues from abroad would result in its worst translation loss in five years, exceeding the $3.5 billion deficit posted in 2011. Peabody feels if...
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“Dark Pools” operators are now subjected to enhanced scrutiny from regulators, according to a Wall Street Journal Report. Wall Street’s self-regulatory body, the Financial Industry Regulatory Authority (FINRA), sent 15 examination letters last month to ‘dark pools’ operators, seeking more information on their operations, client profile and surveillance systems adopted. What Were Dark Pools Set Up For? Dark pools were set up to allow large investors to trade big blocks without having news of...
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Sony Corporation (NYSE:SNE) (TYO:6758) could possibly be consulting Morgan Stanley (NYSE:MS) and Citigroup Inc (NYSE:C) to evaluate the plan proposed by billionaire Dan Loeb related to sale of the entertainment unit, says a report from Bloomberg, citing people familiar with the matter. Earlier, the activist investor Loeb suggested the Japanese company to spin off the entertainment division. The move, according to Loeb, will boost the stock price and raise the much needed cash. Sony Losing...
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Morgan Stanley (NYSE:MS) is set to trim the size of its fixed income unit according to a report in The Wall Street Journal. The global investment bank is scaling back its ambition to be a top fixed-income company, by announcing its investors that its fixed income unit would aim to pull in $1.5 billion to $2 billion in quarterly revenue. Morgan Stanley compared to rivals The investment bank’s new revenue target is much below...
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I’ve written this article for Institutional Investor Magazine. I feel very passionate about the topic and thus could not compress all my thoughts into 800 words. I expanded it and it was published in John Mauldin’s Outside the Box newsletter. “Expand” is an understatement as it is four times the original article. I suggest you skip John’s very kind intro (he is too kind) and go right into “Are We There Yet”? It is...
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The U.S. banking industry, for the first quarter of 2013, posted record earnings of $40.3 billion, which was up 15.8 percent from the same period in 2012. The all-time quarterly high earnings were the result of one-time changes in income and expenses at big banks, says a report issued Wednesday from Federal Deposit Insurance Corp (FDIC). Factors that helped the Banks As per the data from the FDIC, previous quarterly high was at a...
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