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September 2008

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LATEST ARTICLES

  • Alessandro Profumo has built his banking group through acquisitions, cementing his reputation as a brilliant dealmaker. The challenge facing UniCredit’s CEO is to get the most out of his empire. At the heart of the group’s strategy is aggressive organic growth in emerging Europe. Sudip Roy reports.
  • One of the puzzles of Islamic finance is how Indonesia, the world’s most populous Muslim nation, has been so utterly left behind in its development. Nearby Malaysia has evolved the most sophisticated regulatory environment for Islamic finance anywhere in the world and, after building an admirable domestic base, has now opened its doors to foreign entrants. Several Gulf states, notably Bahrain, have built centres of excellence around Shariah-compliant finance; and even less-developed nations such as Pakistan are making up for a slow start and witnessing a boom in this growing area.
  • Turkey set out on the road to EU accession some 60 years ago but the goal remains elusive. Turkish bankers consider the journey worthwhile. But, they muse, if the country keeps on being spurned it should look east rather than west to apply its new-found expertise and dynamism. Eric Ellis reports.
  • Has the credit crunch led even the brightest students to lose all interest in the financial services industry?
  • The Brazilian billionaire built Banco Pactual into one of Latin America’s foremost investment banks before selling it to UBS in 2006. After an inglorious and turbulent two-year stint at the Swiss firm, he is returning to his entrepreneurial roots by setting up a new asset management company. He talks to Chloe Hayward about his plans.
  • Citi
  • Bank chiefs in the region have much to cheer but can’t help feeling a little uneasy. They have no direct exposure to the sub-prime fallout, but have had to rethink their funding strategies. And while they see clear opportunities to grow, an economic slowdown could be looming.
  • Euromoney asked eight leading chief executives what impact the credit crunch has had on their banks and what they think are the problems and advantages of being a local bank in a time of global crisis.
  • The SEC and the FSA have both acted too hastily in reacting to short selling. In the UK, the new disclosure rules have compounded the turbulent mood of the market. Neil Wilson reports.
  • The present round of bank reorganizations look as if they might not be as efficacious as leaving things well alone.
  • Many banks will become less-levered, more conservative, far duller institutions promising much lower and more utility-like returns to investors
  • Concerns about an economic slowdown now weigh on capital markets.
  • Government intervention in financial markets goes against the grain of any US administration. However, it appears preventing closure of the mortgage finance markets is more important than ideology.
  • "For the rest of the bank, we’re actually managing the businesses; with the problem assets we’re not really managing them at all, we’re just managing the accounting"
  • Lawyers around the world are readying lawsuits to file against banks that sold toxic products to investors. Which types of deals are likely to be the subject of the biggest payouts? And how will banks pay for them?
  • It could be the perfect storm – financial, macroeconomic and geopolitical risk are all on the rise. Risk is both where you anticipate it, and where you least expect it.
  • Continuing problems are forcing firms to reconsider market timing, the balance between public and private funding and the importance of neglected sources such as retail and corporate deposits. Six specialists debate the issues.
  • "We have all the signs of emerging markets in the US now – there’s stagflation, growing unemployment, excess debt, poor monetary management – I just wonder when the US will be included in the EMBI+"
  • Chief executives need to lead from the front to achieve cross-company support for supply chain management projects and they need to identify the right partners to help them adopt successful strategies.
  • Standard Chartered has promoted Todd McDonald to the new role of global head of FX electronic pricing and trading. McDonald, who was previously the bank’s FX trading head, Americas, will now be based in Singapore. As a result of his move, Keith Underwood, currently head of FX trading, UK and Europe, will relocate to New York.
  • VTB, Russia’s second-largest banking group, continues to add to the array of western talent in its investment banking business. Its latest hire is Herbert Moos, who has been named as chief executive of VTB Bank Europe in London. Moos joins from Lehman Brothers, where he spent 14 years, most recently as chief financial officer for Asia-Pacific ex-Japan. Moos will be responsible for developing the investment business of VTB in London, Asia and the Middle East. He will report to Yuri Soloviev, head of investment banking.
  • Markets are more susceptible to the herd mentality and the creation of bubbles because of agents’ behaviour. Following the money can solve a large part of the asset price puzzle.
  • The Chicago Mercantile Exchange has pushed through a contentious $7.7 billion acquisition of the New York Mercantile Exchange following months of negotiations. The CME was already the largest derivatives exchange in the world but the combined group, with pro forma 2007 annual revenue of $2.7 billion and average trading volume of approximately 14.2 million contracts a day in the first two quarters of 2008, will now control some 98% of trading in US futures and exchange-traded options. "As a united company we are well positioned for a new phase of growth, innovation and product development that will benefit our customers, shareholders and market users around the world," commented CME Group executive chairman Terry Duffy.
  • "Our long-term view remains – we will eventually see 1.60 for cable and parity for EUR/GBP" -Paul Day, Mig Investments
  • Some 190 IPOs seeking to raise $33.1 billion in capital have been postponed or withdrawn across the world so far this year, according to Dealogic.
  • India moved a step closer to liberalizing its foreign exchange market with the launch of rupee currency futures trading on the National Stock Exchange on August 29. Initial activity was brisk, with about 70,000 contracts changing hands in the first session. The NSE contracts are extremely small by international standards – they have a notional value of just $1,000 – and would appear to be very much aimed at attracting retail participation. Perhaps not surprisingly, early trading was dominated by banks and large corporations.
  • Senior bankers in China remain confident that the economy will continue to provide a favourable backdrop for the banking industry, despite a slowdown in growth. However, some concede that a more complex economic environment in China and abroad will bring greater challenges to the banking system, especially in risk management.
  • IPOs are scarce enough as it is in this gruesome global market. But the largest ever IPO from one of the world’s poorest countries, whose previous record deal was in 1994? That’s rarer still.
  • As the equity market continues to struggle in Brazil, the local debt market is growing in importance. The challenge is to find enough bankers to fill the demand.
  • The tables are starting to turn in the Brazilian banking market – for the first time foreign-owned banks have become acquisition targets for locals Itaú and Bradesco, valued at more than $60 billion each, which now dwarf the purchasing power of several of the international banks in the aftermath of the sub-prime crisis.