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LATEST ARTICLES
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The Las Vegas casino that Deutsche Bank finally managed to sell just before announcing its most recent capital increase – The Cosmopolitan – uses the catchphrase “Just the right amount of wrong” to tempt customers.
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Apple has reopened the market for jumbo bonds as it steps up its share buyback plans and other borrowers are likely to follow suit as mergers and acquisition activity revives.
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If Pimco did manage to score a $375 million profit by securing an allocation of $8 billion of the Verizon $49 billion bond that delivered roughly $2.5 billion of paper gains to investors after it was launched last September, then it was a rare bright spot in a tough year for Mark Kiesel, global head of corporate bonds at the fund management firm.
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The decision by Mike Cavanagh, co-CEO of investment banking at JPMorgan, to move to private equity firm Carlyle should not be viewed as a surprise. Cavanagh has taken himself out of the running for the role of successor to JPMorgan group CEO Jamie Dimon in order to make a late entry in the stakes to follow Carlyle founders David Rubenstein and Bill Conway.
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Will Blythe join Bambi and Godzilla at Mercuria to create a new commodities trading dream team? The fate of Blythe Masters, head of commodities at JPMorgan, is in the spotlight now that the sale of the bank’s physical commodities business to Mercuria for $3.5 billion has been confirmed.
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Emerging markets have bounced back impressively from an early-year slump that had threatened to turn into a full-blown crisis. But there are still plenty of questions about prospects for emerging nations and related banking revenues.
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Vikram Pandit, the former Citigroup CEO, who was ousted in 2012, is casting his net wide as he looks for ways to stay busy.
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The hedge fund industry is coming off another year of substantial underperformance to market benchmarks in bizarrely rude health. Total assets in the industry rose to $2.01 trillion in December to set a new record total above the previous peak of $1.95 trillion in June 2008, according to data firm Eurekahedge. Other monitors put the current total as high as $2.41 trillion.
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Stock analysts have long been mocked for their fawning attitude towards bank CEOs and CFOs on earnings calls. The phrase ‘great quarter, guys’ as an opening gambit became such a cliché that most analysts eventually toned down their approach, and some – led by self-appointed scourge of Wall Street Mike Mayo – have even started showing open scepticism about the corporate bromides delivered by bank executives.
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As the World Cup shapes up to be the main sporting event of 2014, Euromoney columnist Jon Macaskill looks at comparisons between investment banks and football teams for clues to competitive match-ups in the year ahead.
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Litigation cost estimates for investment banks are being revised sharply upwards after JPMorgan shocked peers by revealing that it had set aside $23 billion of legal reserves, then agreed a $13 billion settlement of outstanding mortgage claims with the US authorities.
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The final version of the Volcker rule is unlikely to give posterity phrases that echo through the ages in the style of the King James Bible, but the details of its wording are important to financial market participants, which helps to explain the extended bickering.
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Forward-thinking branding experts are already adjusting their plans for 2014 and beyond: Yahoo recently unveiled a new logo designed to symbolize its fresh start under CEO Marissa Mayer; and the Republic of Iran is reportedly considering a change to the slogan ‘Death to America’ that has been in place since the revolution in 1979.
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Ashok Varadhan might well be the most unpopular man at Goldman Sachs as bonus time approaches. The global head of macro trading at the firm oversaw a third-quarter collapse in revenues in his product lines – which include foreign exchange and rates – that was dramatic enough to threaten lower annual compensation levels for everyone else at Goldman Sachs.
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Regulatory sanctions are coming thick and fast at JPMorgan, with a record $11 billion fine for mortgage-market abuses in late September drawing the most attention. But reports accompanying JPMorgan’s $920 million penalty for failures surrounding its $6.2 billion London Whale loss also shed new light on the distrust and paranoia within the bank.
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There has been widespread condemnation of the manipulation of Libor settings by employees of interdealer broker Icap, and rightly so. But the time has surely come for defenders of former Icap employee Colin Goodman, aka Cash Broker A, aka Lord Libor, aka Lord Bailiff, to step forward.
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The untimely death of an intern at Bank of America prompted a spate of headlines about the long hours worked in the City of London and Wall Street. Forcing junior staff to put in exceptionally long hours is clearly counterproductive in any sector of banking, as it is in other industries. But the practice reaches a peak of pointlessness in corporate finance, where the Bank of America intern worked. Pure corporate finance, such as mergers and acquisitions or advisory work, is the area in the City where the greatest nominal effort is applied to the least practical effect.
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The recently discovered regulatory zeal for a focus on gross leverage ratios at banks, rather than capital assessed on risk-weighted assets, is creating a new set of problems for some of the biggest dealers. Barclays and Deutsche Bank in particular have been put on the back foot by the regulatory bait and switch, which comes at an awkward time – just as key engines of their profitability, such as rates trading, are sputtering.
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The end of the commodities super-cycle of rising prices is being accompanied by a series of humiliating reverses for some of the biggest bank traders in the energy and metals markets. These banks might struggle to retreat to a sustainable, client-based commodities business model, given over-ambitious former revenue targets, the over-sized egos of some of the main players involved, and the extent to which they have alienated customers and regulators.
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The bond market tremors of late June maybe do not signal an impending fixed-income earthquake, but they do demonstrate the challenges banks face in maintaining revenue streams as investors adjust to the prospect of higher rates.
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The jump in treasury yields in late June prompted the two highest-profile US bond gurus to make public pronouncements designed to calm the nerves of their acolytes.
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Bloomberg brought a knife to a gunfight when it tried to pry information out of Goldman Sachs by using details gathered from the data and media firm’s terminals about the bank’s employees. An enquiry by a Bloomberg reporter about whether a partner had left Goldman, given that his terminal was not in regular use, set alarms bells ringing at a bank that has a well-deserved reputation for paranoia.
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Jamie Dimon comfortably survived an attempt to split his combined chairman and CEO role at JPMorgan, which will allow him to set the terms of his eventual departure from the bank. He should start by appointing a president to give a potential successor a trial run.
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Standard & Poor’s met its late-April deadline for a response to a US Justice Department suit accusing the agency of fraudulently rating CDOs with an energetic rebuttal of the case for the prosecution.
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In a July 2007 email exchange cited in the US government’s current case accusing Standard & Poor’s of defrauding investors with its CDO ratings, a recently hired analyst told an investment banking contact about the view among many employees that senior management at S&P had prevented downgrades to avoid alienating clients.
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The annual report for 2012 released by UBS in March demonstrated that its management continues to flounder, while offering perverse hope that the disaster-prone bank might be stumbling towards a sustainable business model.
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Euromoney columnist Jon Macaskill imagines how Doug L Braunstein, the former chief financial officer of JPMorgan, chronicled his testimony at last week's Senate hearing.
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The currency war that many feared as an inevitable accompaniment to the credit crisis played out as more of a paint-ball contest until the recent sharp slide of the yen. The violence of the yen fall of roughly 20% reawakened fears of a wave of competitive devaluations.
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Regulators are belatedly showing signs that they are thinking about potential market abuses from first principles. The broadening of the Libor investigations into the role played by interdealer brokers, a case against Nymex and two employees for divulging flow information and the pursuit of insider-trading allegations against employees of hedge fund SAC are all examples of regulators tackling potential abuse from the important principle that if it looks like a duck, swims like a duck and quacks like a duck, it may well be a duck.
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The new CEO of Barclays takes on the role of chief slogan and acronym officer, and, unfortunately, RISES to the challenge by highlighting the bank's Purpose and Values, while ignoring how it will all work in practice.