Tag Archives: Bank of England

Hedge Funds Back Off Banks as Mutual Funds Dip In

Hedge funds who have tried to make money out of European banks during the euro debt crisis are becoming frustrated with the sector’s erratic movements just as some bigger, and more patient, institutions are dipping tentatively back in.

European bank stocks .SX7P have risen more than 25 percent since late July, fuelled by relief over new crisis-fighting plans, in particular the ECB’s latest announcements which have triggered hopes of a more lasting solution.

But the sector at the root of the global financial crisis has repeatedly disappointed investors after each attempt to call a floor, from a rally at the beginning of 2009 on hopes that the worst of the global credit crunch was over to short-lived optimism over the European Central Bank’s liquidity injections.

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Knight Is Said To Have Spurned $500 Million Citadel Loan

Knight Capital Group Inc. (KCG) rejected a last-minute, $500 million rescue-loan offer from Citadel LLC on Aug. 5 as it worked on a competing plan from a group of investors, said two people with knowledge of the matter.

The loan terms would have given Citadel a minority stake inJersey City, New Jersey-based Knight’s stock and an interest in the market maker’s HotSpot foreign-exchange subsidiary, said the people, who spoke on condition of anonymity because the talks were private. Citadel, the $12.5 billion hedge fund run by billionaire Ken Griffin, competes with Knight’s market-making and electronic-trading business.

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RBS’s CEO Blames Libor-Manipulation On ‘Handful’ Of Individuals

Royal Bank of Scotland Group Plc Chief Executive Officer Stephen Hester sought to limit the damage from the Libor-rigging scandal, blaming a “handful” of employees for attempting to manipulate the benchmark rate.

RBS dismissed four employees for trying to influence the individual responsible for Libor submissions following an internal investigation, the bank said today, without identifying the staff involved. Hester said it is too early to estimate the potential cost of fines and litigation linked to rate-rigging.

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Standard Life’s Grimstone Says Libor Scandal Is Hurting London

London’s reputation as a global financial center has been marred by the Libor-rigging scandal, said Gerry Grimstone, chairman of Standard Life Plc (SL/), Scotland’s largest insurer.

He was speaking on Bloomberg TV’s “The Pulse” show with Maryam Nemazee in London.

On London’s reputation after the Libor scandal:

“I’ve been in the financial services for 30 years and I’ve never known a time like this. It’s been terrible. Some of the language people use has been terrible. I’m concerned that the public don’t really understand it. The public talks about hanging bankers. We shouldn’t use words like cesspit to describe the City of London.”

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Recession, Libor, Facebook punish Europe’s banks

(Reuters) – Leading European banks reported dismal profits on Tuesday, blaming everything from the continent’s debt crisis and Spain’s property market crash to Facebook’s disastrous stock market debut.

Within a space of an hour UBS (UBSN.VX) of Switzerland, Deutsche Bank (DBKGn.DE), BBVA (BBVA.MC) of Spain and Austria’s Erste Bank (ERST.VI) delivered the bad news on an industry already beset by investigations into a number of scandals.

Deutsche Bank, Germany’s flagship lender, announced it will axe 1,900 jobs under a plan to cut costs by 3 billion euros ($3.7 billion) and streamline its business. New co-Chief Executive Anshu Jain said expectations on profitability had moved “closer to our grim scenario”.

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Swiss regulator quizzes Credit Suisse, UBS on Libor

(Reuters) – Swiss regulator FINMA said it is questioning UBS and Credit Suisse in an investigation over possible Libor interest rate rigging.

“We are actively going after information that will enable us to make a judgment on what has happened,” a FINMA spokesman told Reuters on Monday.

The two banks are not under formal investigation as Swiss banks are legally obliged to cooperate with FINMA, which regulates the country’s banks.

Credit Suisse said on July 16 it did not expect a “material” impact from the regulatory probe.

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Shrinking investment bank saps SocGen profit

(Reuters) – French bank Societe Generale’s (SOGN.PA) quarterly profit tumbled 42 percent, hit by losses at its investment bank, which it is shrinking in response to the euro zone crisis, and one-off writedowns on the value of U.S. and Russian units.

Under pressure to strengthen its balance sheet, France’s No. 2 listed bank is more than half way through a plan to slash debt and sell assets at its corporate and investment bank.

Profit at that unit, which has cut back risk since a huge rogue-trading loss in early 2008 hammered its reputation, plunged by 70 percent in the second quarter.

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