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15th
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15th
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ZeroHedge
Baseline Scenario
Jun
26th
Sat
26th
It prevailed in a bidding war for Greece’s Emporiki, a money-losing, government-owned lender. A senior Crédit Agricole executive said at the time that the deal reflected “the confidence we have in the Greek economy and the superior growth of the Greek banking sector.
Jun
13th
Sun
13th
Jun
8th
Tue
8th
Forbe’s Bob Lenzner shows us exactly how warped the bailed out banking sector has become: Bob notes that Six giant banks made $51 billion in profits last year, while the rest of the banking industry — the other 980 banking institutions — all lost money.
May
15th
Sat
15th
Apr
24th
Sat
24th
CDS of Italian banks 30-40 bps below sovereign CDS. via Playing The Contagion II: Goldman Recommends Betting On Contagion Risk In Portuguese, Spanish And Italian Banks | zero hedge
Jan
31st
Sun
31st
Private Equity And Paul Volcker Reform
As banks evolve to become government-regulated utilities, private equity firms and hedge funds will have an even harder time securing financing for their investments.
The specific points at issue are ownership or sponsorship of hedge funds and private equity funds, and proprietary trading — that is, placing bank capital at risk in the search of speculative profit rather than in response to customer needs. Those activities are actively engaged in by only a handful of American mega-commercial banks, perhaps four or five. Only 25 or 30 may be significant internationally. Apart from the risks inherent in these activities, they also present virtually insolvable conflicts of interest with customer relationships, conflicts that simply cannot be escaped by an elaboration of so-called Chinese walls between different divisions of an institution.
If this re-regulation process continues, private equity funds and hedge funds will need to adapt their business model to a “new normal” where debt financing might be scarce. Or the new regulations will open up a space for investment funds focusing on providing debt for “speculative” activities.
Dec
16th
Wed
16th
Borrow From Government, Lend To Government
The monster arbitrage opportunity for banks that borrow from the government (or central banks, if you really believe that they are independent) at quasi-0% and lend to the government pocketing a risk-free (beside sovereign default risk …) 3-5% spread is going on in Europe as well.
European banks, which have lost or written down $561 billion in the credit freeze, are awash with cash after governments approved $5.3 trillion of aid, more than the annual gross domestic product of Germany, European Union data show.
Financial institutions increased their holdings of government debt to 1.51 trillion euros in October, from 1.19 trillion euros at the end of 2007, ECB data show. The situation is similar in the U.S., where bank investment in such securities has risen by 25 percent to $1.39 trillion since 2007, according to the Federal Reserve.
So European banks have bought a net €320 billion in government bonds in 2008 and 2009. Their American counterparts have bought about $350 billion during the same period.
