2005 Bankruptcy Law Doomed Wall Street ·
Analysts contend Wall Street sealed its demise by backing a 2005 bankruptcy code that in retrospect removed legal obstacles for counterparties - including hedge funds- to unwind derivatives trades and demand extra collateral from faltering institutions like Bear Stearns and Lehman Brothers. (FT)
October 31, 2008
Commercial Banking
Barclays Secures $12B Capital Injection ·
Barclays finalized an $11.8 billion capital injection Friday – including a $9.4 billion investment from private investors in Qatar and Abu Dhabi – in a move that will allow it to meet new capital ratios mandated by the U.K. government for Britain's largest banks. (FT)
Barclays Chases $10B Capital Injection ·
Barclays is reportedly close to securing a $9.8 billion investment from the Qatar Investment Authority and an Abu Dhabi-based sovereign wealth fund in a move that would help it meet new U.K. capital benchmarks. The bank also discussed investment possibilities with Libya’s sovereign wealth fund. (FT)
Schwarzman: Regulation Is Not A Solution [VIDEO] ·
Stephen Schwarzman, head of private-equity giant Blackstone, said in an interview Thursday that the failure of "regulated" banks and brokerages in recent weeks underscores that more government regulation is not necessarily a solution to the crisis. (Fortune Video)
Lazard Chief Sees Significant New Losses Ahead ·
Lazard's CEO Bruce Wasserstein said Thursday the largest U.S. banks refuse to lend for an obvious reason: they know significant losses on bonds backed by credit card debt, commercial real estate loans and other assets loom ahead if the economy gets worse. (Fortune)
Moscow Bails Out Wealthiest Oligarch ·
Russia reportedly extended a $4.5 billion loan to UC Rusal, the holding company of its wealthiest oligarch Oleg Deripaska, to help it retain the 25% stake in Norilsk Nickel that it pledged as collateral to Merrill Lynch, Royal Bank of Scotland and other western banks. (FT)
As Applicants Line Up, Is Fed Near Its Limit? [ANALYSIS] ·
As the Federal Reserve debates whether or not to grant bank status to GMAC Financial Services, analysts contend the central bank risks perverting the traditional bank holding company charter, which was never meant to serve as a safe haven for companies in trouble. (American Banker)
Treasury Funds To Pay Bank Dividends [ANALYSIS] ·
U.S. banks scheduled to receive $163 billion as part of the U.S. Treasury's recapitalization plan are on pace to use roughly 52% of that sum for dividend payouts, despite earlier insistence from U.S. lawmakers the banks should strictly use the funds to boost lending. (Washington Post)
Morgan Stanley Builds Deposit Base ·
Morgan Stanley said Wednesday its brokerage division sold $3 billion in certificates of deposits over the past week in an effort to secure a more stable funding source as it transitions into a bank holding company. The firm also said it is exploring acquisitions to accelerate deposit growth. (Reuters)
Treasury Makes First Bailout Payments ·
The U.S. Treasury Department released a report late Wednesday confirming it made $125 billion worth of equity purchases Tuesday in the nation's top nine financial institutions, injecting fresh capital into the credit frozen banking sector. (AP, Bloomberg)
Feds Investigate J.P. Morgan, Alabama Swap ·
The U.S. Justice Department has subpoenaed documents from J.P. Morgan Chase regarding a 2002 derivative trade it executed for Alabama's Public School and College Authority. Officials are investigating whether the bank and other parties conspired to overcharge for the deal contract. (Bloomberg)
Goldman Sachs Names 94 New Partners ·
Goldman Sachs has reportedly invited 94 employees to become partners this year, granting them a bigger share of a bonus pool that has shrunk amid unprecedented market turmoil. For 2008, Goldman has reserved $11.4 billion for compensation and benefits, a 32% decline from last year. (Bloomberg)
Dollar Libor Continues To Ease ·
The British Bankers' Association reported Wednesday three-month Libor, or the rate banks charge each other for three-month loans in dollars, eased for the 13th straight day to 3.42%. Overnight Libor also eased to 1.14%. (Bloomberg)
Treasury Shuns Smaller Lenders [ANALYSIS] ·
Analysts observe that the U.S. Treasury's $160 billion capital handout helps banks that need it least, making them stronger at the expense of their smaller rivals. (Fortune)
GM, Cerberus Seek Bank Status For GMAC ·
GMAC, the troubled auto finance and home-loan lender, is reportedly in discussions with the Federal Reserve to become a bank holding company so that it can help its co-owners General Motors and Cerberus gain access to the U.S. Treasury's $700 billion financial rescue plan. (WSJ)
