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October 2009

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  • 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.
  • Published in conjunction with: Banco Santander Totta Caixa - Banco de Investimento
  • Lloyds’ bumper RMBS is good news but it doesn’t fix the market.
  • 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."
  • 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.
  • 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.
  • HSBC moves its chief executive to Asia not a moment too soon, as it seeks to grow earnings while international banks pull back.
  • A worrying trend has surfaced in emerging markets as volatility hit China’s hedging contracts.
  • Calderón needs tougher measures to solve the fiscal deficit problem.
  • 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?
  • Ankara ought to reveal the source of a $15 billion windfall in its budget.
  • "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.
  • "It’s quite hard to make a case for subordinated debt at all"
  • Hybrid capital may no longer be welcome in the US and Europe but it is playing a valuable role in the emerging markets.
  • 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.
  • Barclays Capital has rolled out an improved version of its highly rated Barx trading platform.
  • Morgan Stanley’s incoming CEO explains strategy; Mack and Chammah take new responsibilities
  • 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.
  • Guarantees from its parent remove the big risks; It sets out modest targets for a return to profitability
  • 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.
  • Hopes to raise equity up to $500 million; Turns away from real estate development
  • 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.
  • 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 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.
  • 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.
  • 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.
  • 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.
  • Keen to avoid pitfalls of FXMarketSpace; Flexibility and cooperation key