Macaskill on Markets

A US climate bill filled with green credits will create business for banks and provide relief from the backlash against ESG products.

West Virginia state treasurer Riley Moore has opened another front in a campaign by Republican officials in the US against banks that promote ESG policies.

HSBC Asset Management’s head of responsible investing has had it up to here with consultants and regulators lecturing him on climate change risk.

Credit Suisse maintained its reputation for bonus structure creativity when times are tough with its recent move to make payments to some staff in the form of bonds linked to its own derivatives counterparty exposure. The paper will offer healthy coupons of 5% in Swiss francs or 6.5% in dollars, but without the upside offered by the original Partner Asset Facility (as it was dubbed) from 2008, which delivered a return of 70% by giving staff exposure to toxic mortgage and high-yield debt assets that had collapsed in price but later recovered value.

David Einhorn’s £7.2 million ($11.3 million) fine by the UK’s Financial Services Authority for insider trading in Punch Taverns stock should make some hedge fund managers and investment bankers very afraid.

When David Einhorn was sanctioned by the UK’s Financial Services Authority at the end of January he was described in one newspaper profile as “self-effacing”, which was an odd phrase for a hedge fund manager who relishes the spotlight, at least by the standards of the industry.

More coals were heaped on the head of Johnny Cameron after the details in December’s FSA report on the failure of RBS revealed how little he appeared to understand the mechanics of structured credit when he was head of global banking and markets at the firm.

Banks face tough decisions on how hard they should fight to retain sales and trading market share in different sectors, as the great deleveraging drive of 2012 gets under way.

The decision by Congressman Barney Frank not to seek re-election to the US House of Representatives next year could result in an unexpected financial windfall for some employees of Goldman Sachs.

Bank of America recently issued a footnoted warning in a regulatory filing about $11.5 billion of additional collateral payments on derivatives it faces because of rating agency downgrades. At the end of September the bank was on the hook for $4.9 billion of extra collateral that it might be required to pay but had not yet posted, including $3.2 billion linked to its September 21 downgrade by Moody’s.

When Richard Moore was leaving Citigroup after two decades at the bank, in roles including global head of foreign exchange, he told colleagues he was considering a career shift to professional poker player.

MF Global’s spectacular failure could have a knock-on effect on confidence in another mid-sized firm with ambitions to join the investment banking elite: Jefferies.

Central bankers seem to have had just about enough of Jamie Dimon’s spittle-flecked rants about the dangers of increased regulation. The JPMorgan chief executive lambasted Federal Reserve chairman Ben Bernanke over the costs of regulation in a public debate in June, then followed up by arguing with Bank of Canada governor Mark Carney during the recent IMF/World Bank meetings in Washington. Dimon has also warned that some reforms are “anti-American”.

The run on Morgan Stanley’s stock and credit default swaps in the final days of September had alarming similarities to the collapse in confidence in the bank during 2008.

CDS spreads balloon as fears grow over potential flight of funds; Did US firm mis-time ramping up of risk in fixed income markets?

Warren Buffett’s stick-up of Bank of America in late August was a classic piece of opportunistic investment. The $5 billion deal marked an evolution in Buffett’s signature approach of renting his reputation to troubled financial companies in return for a near-extortionate fee. Rather than waiting for a firm such as Salomon or Goldman to come to him begging for protection, Buffett this time foisted a deal on Bank of America.

Bank of America’s acceptance of Warren Buffett’s extortionate investment terms represented at best as a gimmicky decision to pay for an endorsement and at worst a disregard for the bank’s existing shareholders

The collapse in fixed-income revenues at Goldman Sachs in the second quarter might accelerate the war of succession between rivals for the role of next chief executive.