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April 2008

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  • Banco Santander in Brazil has named Banco Real chairman Fabio Barbosa as the new head of the Spanish bank’s businesses in Brazil. Barbosa will take up this new role when Banco Real is legally separated from ABN Amro. Gabriel Jaramillo, the current country head of Santander in Brazil, will "provide advice and support to the office of the chairman of Santander". Jaramillo’s post will be filled temporarily by Jose Paiva until Barbosa takes over the combined operations.
  • RBC Capital Markets is building a European leveraged finance team.
  • Despite reporting its first annual loss in 2007 and forecasts of further credit write-downs in the first quarter, Merrill Lynch is getting out the chequebook for its Latin American business. The firm has gone on a shopping spree and plucked the cream of the Latin American investment banking crop, especially in Brazil.
  • Spanish bank BBVA has announced plans to open a new platform in Brazil, following the sale of its 5.01% stake in Banco Bradesco.
  • Brazil’s Banco Itaú plans to open a Tokyo branch of its securities subsidiary, Itaú Securities, in the autumn. The subsidiary will become the first securities firm from the Bric countries (Brazil, Russia, India, China) to set up an operating base in Japan. The new branch will sell Brazilian stocks, bonds and other financial products to institutional investors.
  • Accusations of sharp practice are flying as the loan market struggles to deal with its problems.
  • Even though spreads for most foreign exchange products are often so thin that they barely exist, the use of transaction cost analysis (TCA) to measure execution is on the increase.
  • US investment bank Merrill Lynch has created a new infrastructure equities index, giving investors convenient access to the projected infrastructure boom in Russia.
  • Any product that combines the words “catastrophe” and “securitization” is going to be a tough sell in this market. But insurance-linked securities are a rare sector of spread stability and growth in the credit world. Louise Bowman reports.
  • Some of Argentina’s biggest companies are raising finance to invest in the booming agriculture sector in Latin America, on the back of steep rises in soft commodity prices.
  • Highly levered funds are always at the mercy of credit and liquidity suppliers. So be wary of those active in markets where liquidity can rapidly dry up, says Neil Wilson.
  • Thailand’s People Power Party government bears a close resemblance to Thaksin Shinawatra’s overthrown administration, and Thaksin is widely seen as its eminence grise. The government has big plans for infrastructure development but it is highly exposed to a contraction of US export demand and the potential for inflation. Eric Ellis reports.
  • Lost a billion dollars in the US structured finance market? No problem: Daddy just received a huge bonus from the global economy and will give you $1 billion to cover the damage.
  • We are engulfed in a tornado of gloom. Wall Street titans and employees alike have seen their share options decimated, pension pots plummet and everyone feels insecure about job security. I’m hearing that investment banks need to cut 20% of their employees to accommodate lower profitability.
  • Costs are rising in Asian private banking but the vast and untapped pools of wealth in the region mean that it is still a highly attractive business proposition. The adverse market environment will further reduce margins. However, on a long-term basis the opportunities are too good to miss. Helen Avery reports.
  • Citi has apparently raided rival UBS and captured its global banks marketing team. Neither bank was able to comment at the time of writing but it is believed Citi hires include Bruno Widmer and at least five of his Zurich team.
  • Investors in equity-linked structured notes are becoming increasingly concerned about counterparty credit risk, and are therefore becoming more discerning when it comes to choosing which institutions to buy their products from, report dealers.
  • Awash with cash that far exceeds domestic investment opportunities, Australia’s pension funds are continuing to expand their holdings in global and alternative assets, developing an expertise paralleled by that of the country’s banks. Chris Wright reports.
  • "It is an inauspicious year because the rat year brings about slower world economies where unemployment, money matters and environment matters would be the key issues. There would be plenty of natural disasters/diseases which could affect the world."
  • "Low sovereign default rate reflects buoyant global market conditions."
  • "It is very hard to distinguish a catastrophe CDO from any other type of CDO in this market – aren’t all CDOs catastrophes?"
  • "I’ve reluctantly discarded the notion of my continuing to manage the portfolio after my death – abandoning my hope to give new meaning to the term ‘thinking outside the box’"
  • Deutsche Bank is believed to have suspended two of its Italian FX sales team because of procedural irregularities. Sources say that Riccardo d’Antonio, the bank’s head of Italian FX sales based in London, and his subordinate, Santo Caristo, who was based in Milan, were told of the action in early March. Their suspension is believed to relate to a small loss incurred by one of their clients, which led to an abuse of the bank’s booking procedures. Deutsche and the Financial Services Authority, which held d’Antonio’s registration, decline to comment.
  • March 7
  • The Fed is finding innovative ways to fund US financial institutions to combat the systemic risk that has done for Bear Stearns.
  • Last month two interdealer brokers unveiled their participation as official venues for the trading of Dutch bonds.
  • India’s nascent and relatively isolated financial markets have been spared the worst of the credit crunch but leading corporates are feeling the squeeze in other ways.
  • Rating agency considers wider implications of CDO methodology change.
  • But CDO managers are paying a premium, especially in the US.
  • Despite widespread investor puts of pre-crunch extendible notes, the sector is experiencing a relatively good 2008, with investors calling the shots.