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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.
  • 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.
  • Hybrid capital may no longer be welcome in the US and Europe but it is playing a valuable role in the emerging markets.
  • Calderón needs tougher measures to solve the fiscal deficit problem.
  • HSBC moves its chief executive to Asia not a moment too soon, as it seeks to grow earnings while international banks pull back.
  • 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.
  • 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.
  • 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.
  • "It’s quite hard to make a case for subordinated debt at all"
  • 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?
  • "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"
  • A worrying trend has surfaced in emerging markets as volatility hit China’s hedging contracts.
  • Lloyds’ bumper RMBS is good news but it doesn’t fix the market.
  • Ankara ought to reveal the source of a $15 billion windfall in its budget.
  • 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."
  • Keen to avoid pitfalls of FXMarketSpace; Flexibility and cooperation key
  • Investment bankers have always had a reputation for innovation – perhaps one they want to downplay right now. But a tour of the leading capital markets houses on Wall Street, almost a year to the day after the collapse of Lehman Brothers, gave the impression that they had learnt a new skill: the ability to bend time.
  • Gordon Brown’s government has no clear strategy for dealing with the budget deficit. Nor does its likely successor, the Conservatives led by David Cameron.
  • A new ‘currency’ was launched in early September, when the WDX Organization used its synthetic Wocu – world currency unit – to trade on the Bordeaux Wine Exchange. The symbolic transaction will, WDX hopes, lead to swift acceptance and use of the Wocu as an international global unit of account. Ostensibly, the Wocu is little different from other basket products offered by numerous banks. Where it perhaps differs from bank offerings is in its independence. WDX has established an institute to ensure its integrity and it hopes that its proven low volatility – it has been back-tested over 10 years – will help to increase its chances of acceptance.
  • 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.
  • Tough medicine has been doled out at Citi since the arrival of Derek Bandeen as head of global equities trading last summer. After a blunt diagnosis of the problem – too many people doing the wrong things – the global equities division went through a dramatic shake-up in which it shed just over a quarter of its staff.
  • France’s parliament amended article 2011 of the civil code on September 17 to help the structuring of Islamic financial products in the country using the French equivalent of trusts.
  • 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.
  • Stimulus measures to be retained; New oil finds boost growth prospects
  • New firms target middle-market clients via strategic alliances; Private banks and family offices seen as possible rich vein
  • The yet-to-be-named trade aggregation service launched by CLS and Icap subsidiary Traiana in April received a fillip in September when Goldman Sachs became the latest bank to say it would support it. It joins the seven founder banks: Bank of America; Credit Suisse; Citi; Deutsche Bank; JPMorgan; Morgan Stanley and Royal Bank of Scotland.
  • 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.
  • Three become five as clients choose multi primes; JPMorgan expands Bear Stearns’ platform
  • Guarantees from its parent remove the big risks; It sets out modest targets for a return to profitability