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October 2009

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  • Published in conjunction with: Banco Santander Totta Caixa - Banco de Investimento
  • The global financial climate has forced treasurers to focus on making the best use of resources, wherever they may be. Technological developments are making that easier, but they are also having to cope with a tighter regulatory environment.
  • "It’s quite hard to make a case for subordinated debt at all"
  • "I’m afraid he’s on gardening leave and could be for a while. You should see the size of this guy’s garden. I think it’s called Buckinghamshire"
  • Whether or not former governor of Alaska and sometime vice-presidential candidate Sarah Palin’s speech at the CLSA investors’ forum on September 23 was a hit with the audience – and opinions are divided – there’s little doubt that both she and her hosts did well from the event. Palin’s speaker fee was undisclosed but is likely to have been substantial; CLSA, meanwhile, adopted a media-unfriendly strategy that ended up winning it plenty of attention and all-important coverage of the event. Media sources, hoping for one of Palin’s trademark gaffes, were frustrated by CLSA’s policy of holding the session behind closed doors. Of course in the modern era absolute secrecy was unlikely (and probably unwanted by the media-savvy CLSA). Almost as soon as Palin’s speech began, audience members began sending their thoughts to social networking site Twitter; within hours of the speech’s conclusion they and business newswires were posting substantial excerpts online.
  • Calderón needs tougher measures to solve the fiscal deficit problem.
  • Sheila Bair is running short of funds. But she is right to want to raise them in a way that doesn’t create a panic.
  • A romantic, old-fashioned style of banking business is enjoying a revival in the US. Smaller banks are gaining customers who are disillusioned with their bigger, national competitors. The White House is encouraging the trend. But should they be worried about banks that are too small to be saved?
  • The New Yorker magazine has offered an intriguing morsel of insight into the days after the Lehman Brothers collapse. According to the article, Tim Geithner, then president of the Federal Reserve Bank of New York, received a call from a "titan of the financial system" (as Tim put it), who said he was worried but doing fine. Immediately after ending the call, Geithner called the titan back and said: "If anyone hears your voice, you’ll scare the sh*t out of them."
  • HSBC moves its chief executive to Asia not a moment too soon, as it seeks to grow earnings while international banks pull back.
  • Hybrid capital may no longer be welcome in the US and Europe but it is playing a valuable role in the emerging markets.
  • The leaders of the world’s banking industry will be relieved to know that someone is there to help them overcome their inhibitions and rebuild their damaged egos.
  • Lloyds’ bumper RMBS is good news but it doesn’t fix the market.
  • On September 11 BGC Partners held its Annual Global Charity Day, involving the slightly bizarre sight of well-known (and indeed not-so-well-known) celebrities wandering around the inter-dealer broker’s trading floors taking calls from clients.
  • Ankara ought to reveal the source of a $15 billion windfall in its budget.
  • A worrying trend has surfaced in emerging markets as volatility hit China’s hedging contracts.
  • Governments and the broader public sector are increasingly seeking the sort of service improvements that can draw on cash management specialists’ expertise. Laurence Neville reports.
  • Barclays’ decision last month to move $12.3 billion of credit market assets to a Cayman Islands-registered fund prompted a frenzy of interest, combining as it did the twin bogeymen of toxic assets and off-balance-sheet vehicles. Barclays chief executive John Varley describes the deal as a further step in its "efforts to manage down the quantum and volatility of our credit market exposures" – already reduced by 30% in the first half of 2009. But it seems to be driven far more by concern about the monoline guarantors that wrapped many of these securities rather than the assets themselves. The transaction involves the sale of $2.3 billion of US RMBS, $1.8 billion of whole loans and $8.2 billion of assets wrapped with monoline guarantees to a fund, Protium Finance LP. Protium is a medicine frequently used to treat heartburn and acid reflux – not the most promising indicator of the desirability of the portfolio.
  • Policymakers like to talk up the dollar. But an orderly decline of the greenback would be no bad thing.
  • UBS appears to be once again expanding its FX business with a series of senior appointments. Chris Vogelgesang, who spent 13 years at Merrill Lynch in senior roles before taking a break from the industry, has joined as global co-head of FX. Vogelgesang, who will be based in Zurich and report to Dimitri Psyllidis, shares the role with Singapore-based Arie Adler, who continues as head of FICC, Asia ex-Japan. Electronic trading pioneer Simon Wilson-Taylor, who left his role as head of State Street’s Global Link division in January, has also joined the bank as managing director and global head of e-commerce. He reports to Fabian Shey and is based in Stamford, Connecticut. UBS has also poached Andy Durrant from the CME in the new role of head of e-marketing in Europe. He will be based in London and report to Julian Wantling, co-head of FICC distribution, EMEA, as well as to Simon Wilson-Taylor.
  • SW Asset Management, a new fixed-income fund, is demonstrating its enthusiasm for emerging market firms by investing in their debt and exploring the credit default swap market. Dominic O’Neill reports.
  • A flurry of announcements during September heralds the end of an era in US banking. The banks themselves will hope it also presages a new, calmer period for their own institutions and the financial markets.
  • Morgan Stanley’s incoming CEO explains strategy; Mack and Chammah take new responsibilities
  • The news that HSBC’s chief executive, Michael Geoghegan, will move to Hong Kong has been greeted as further proof of the importance of Asia to the world’s top banking franchises.
  • New firms target middle-market clients via strategic alliances; Private banks and family offices seen as possible rich vein
  • Regional and multi-regional cash management banks have a chance to expand their markets and force global providers to rethink what they offer. Will they seize their opportunity? Laurence Neville reports.
  • An aim of tapping into the potential of robust, transparent and ultimately investable FX indices has resulted in FTSE Group launching its FTSE Currency Forward Rate Bias (FRB) Index Series in conjunction with Record Currency Management. The FRB series effectively provides a carry strategy on the dollar, euro, yen, sterling and Swiss franc. Record’s research suggests that FRB provides a fundamental and sustainable return stream that rewards the risks associated with holding higher-interest-rate currencies. The index series is based on data going back to 1978 and shows a long-term return comparable to global equities and superior to global bonds, but with lower volatility. Ultimately, the hope is that products, such as ETFs and futures, will be based on the indices.
  • Keen to avoid pitfalls of FXMarketSpace; Flexibility and cooperation key
  • Citi has hired Rodney Tsang, previously Merrill Lynch’s head of China private-sector coverage, as co-head of China investment banking. Tsang will report to Farhan Faruqui, head of Asia Pacific global banking, who says of the hire: "The non-SOE [state-owned enterprise] sector in China has been growing for the past few years, and it’s an area we’re continuing to invest resources in. Rodney’s hire is an important incremental step in that direction, not only because he has good relationships and a lot of credibility with clients but because his track record in sectors including general industry, consumer and real estate complements the expertise of our existing team very well."
  • Stimulus measures to be retained; New oil finds boost growth prospects