North America

As head of the Office for the Comptroller of the Currency, Michael J Hsu has a unique viewpoint on the US banking system. In what could be one of his last interviews in office, he speaks to Euromoney about the future of the system – and how small and medium-sized banks can survive in an era when technology spend is only becoming more important.

US banks will get a trading and dealmaking boost from Trump’s re-election, but rising Treasury yields could pose challenges.

A second Donald Trump presidency could be a game changer for banks across the US. Senior bank executives must think deeply not just about the potential for regulatory relief and higher investment banking revenue, but also – beyond the big four – about new scope to make transformational strategic moves.

Cost-conscious FX clients appear to be going to great lengths to avoid upfront payments for volatility protection, despite the lack of clarity around Fed monetary policy and the potential impact of political and geopolitical factors over the remainder of the year.

US and Canadian banks may have had a head start in generative AI, but some European banks are trying to close the gap. Those in charge of harnessing the technology at big banks in Europe say they are gaining confidence in its use: adapting marketing shots to certain client profiles, helping sales managers to sift through product policies and much more.

Javier Rodríguez Soler, BBVA’s global head of sustainability and corporate and investment banking, says an acquisition of Banco Sabadell would boost his division’s international standing. But BBVA is already eyeing a leading role in banking decarbonisation around the world, especially in the US. Partnerships with private equity companies, and investments in cleantech funds, are among the ways it is pursuing that goal.

Four months on from North America’s move to a shorter settlement cycle, market participants have used a combination of liquidity management, technology pivots and human resources to mitigate their exposure to higher FX costs.

While treasurers see promise in regulatory changes such as ISO 20022 and the digital euro, concerns over compliance pressures and potential disruptions are mounting, according to the Corporate Treasurers on Key Trends in Cash Management report, published by Euromoney earlier this month.

Not long ago, Miami was known as a place middle-class Americans went to retire. Today, it is a burgeoning financial hub full of high net-worth families, private equity firms and hedge funds – and it is busy pulling in capital and private wealth at a record rate.

It is turning out to be an equities year for the big investment banks, as fixed income revenues fall or stall and fees from dealmaking recover slowly.

Direct lending may have benefitted from the resurgence in US private equity buy outs in the first half of the year, but there may still be a return to syndicated markets.

Bullish US companies are looking beyond historically high interest rates and tight lending standards when it comes to commercial lending.

Nearshoring has become a topic that is discussed so often – and applied to so many issues – that it seems to be everywhere, and nowhere at once. Euromoney talks to banks operating in the Mexican market to find specific examples of new business being generated by nearshoring.

Its acquisition of Citi’s retail banking business in the Philippines has proven to be a challenge. It has put pressure on the bank’s capital buffers, while Citi’s high-end customers have shown a preference for international players.

Huge international debt capital market issuance in September and October is forecast as investors may seek to take any US Treasury benefit through wider spreads.

Alongside UniCredit’s recent acquisition of Polish financial technology company Vodeno, the US private equity takeover of VeloBank is another sign of renewed optimism in Poland.

The spike in bitcoin after the shooting at a Donald Trump election rally was a reminder that for all the claims of increased maturity, the world’s largest cryptocurrency remains unpredictable.

S&P’s regional bank index has just pushed past its March 10, 2023, level, reflecting where these stocks were immediately before the collapse of SVB last year. Those stocks are rising sharply and investors are seeing huge profits, so is this a sign that regional banks have finally emerged from their crisis?

Tyler Dickson’s departure from Citi must rank as one of the most predictable moves in investment banking this year, even if where he has ended up is perhaps less obvious. Elsewhere, Citadel Securities is apparently set to make an offer that some of the Street might find difficult to refuse.

Basel-endgame pushback has reduced the urgency for US banks to relieve capital, but investor appetite for significant risk transfer trades is spilling over to Europe.

Donald Trump is now likely to win the US presidential election after a disastrous debate performance by incumbent Joe Biden. Trump 2.0 may bring complications as well as benefits for Wall Street.

Derivatives structurers are thriving, but regulators aren’t convinced the biggest Wall Street banks have a firm grasp of their complex exposure.

It is getting tougher for investors to execute block trades of more than €2 million in Europe’s fragmented equity markets. Matching buyers and sellers needs a return to negotiation and away from pure electronic trading.

The absence of staking and the earlier approval of spot Bitcoin exchange-traded funds have sucked much of the excitement out of the SEC’s surprising decision to greenlight spot Ethereum ETFs.

For the US to come out in support of voluntary carbon markets even while arguing for their reform is an important step in the drive to seek better standards for what are vital – albeit flawed – mechanisms. But more guidelines on how to certify and trade offsets are no substitute for the real thing.

John Mathews, head of UHNW Americas for UBS in New York, tells Euromoney why the US’s private banking model is so successful, why the Swiss firm is really in the life counselling business, and explains why it has targeted US ultra-high net worth clients.

As securities markets shift to T+1, repo is already going intraday with DLR the first of what may be many digital trading platforms to offer JPM Coin for the cash leg.

By starting from a blank sheet of paper, Royal Bank of Canada hopes its new US cash-management platform will allow it to capture a greater share of wallet from existing clients while not being held back by legacy technology.

The prospect of interest rate cuts from the Fed in 2024 is disappearing. Japan and Korea are among those feeling the heat.

Anything except a brief stay on as chairman would cast a baleful shadow over the chief executive’s successor at JPMorgan.