Hard line adopted on Greek debt loss (FT)
European negotiators have asked Greek debt holders to accept a 60 per cent cut in the face value of their bonds, a hardline stance that far exceeds losses agreed in a deal between private investors and eurozone authorities three months ago. The stance, delivered to a consortium of international banks at the weekend by Vittorio Grilli, Italian treasury chief and lead eurozone negotiator, is a victory for German-led northern creditor countries who have been pushing for Greek bondholders to accept far more of the burden for a second bail-out. According to officials briefed on the talks, France, the European Central Bank and the International Monetary Fund remain concerned the tough stance could trigger bondholder insurance policies known as credit default swaps, sparking investor panic because of uncertainty over which financial institutions face CDS losses.
In Cautious Times, Banks Flooded With Cash (NYT)
Though financial institutions are not yet turning away customers at the door, they are trying to discourage some depositors from parking that cash with them. With fewer attractive lending and investment options for that money, it is harder for the banks to turn it around for a healthy profit. … “We just don’t need it anymore,” said Don Sturm, the owner of American National Bank and Premier Bank, community lenders with 43 branches in Colorado and three other states. “If you had more money than you knew what to do with, would you want more?”
Go West, Investment Banker (WSJ)
The New York state comptroller’s office predicted this month that Wall Street would cut 10,000 jobs by the end of 2012, bringing the total losses since January 2008 to 32,000. Bank of America last month announced global staff cuts of 30,000, or 10% of the firm’s workforce. Meanwhile, regional banks like KeyCorp, Fifth Third Bancorp in Cincinnati, SunTrust Banks Inc. in Atlanta and U.S. Bancorp in Minneapolis, have been adding bankers for stock, bond and loan offerings, as well as mergers and acquisitions. KeyCorp, for example, has increased its investment banking unit by 36% since the beginning of 2010 and Fifth Third has 20 investment bankers, up from zero a year ago. Investment-banking generates hefty fees that could help the smaller banks offset declining interest income from their core business of lending. “It’s a great opportunity for the KeyCorps of the world to lift talent,” says Michael Karp, a managing partner at executive search firm Options Group.
Regulator Flagged SAC Stock Trades (WSJ)
In the 18 referrals made by Finra and the NASD between 2002 and 2011 that were reviewed by the Journal, investigators said they were vexed by SAC’s repeated appearance in routine screens of suspicious trading near mergers and acquisitions, earnings announcements and other market-moving news. SAC in a statement said, “Every day our firm transacts in thousands of securities,” adding that “it is not surprising that we would be included in a small percentage of Finra referrals.”
UBS Profit Falls After Trading Scandal (DealBook)
UBS said on Tuesday that profit fell 39 percent in the third quarter from the period a year earlier after a rogue-trading scandal had cost it $2.3 billion. Profit fell to 1.02 billion Swiss francs ($1.2 billion) in the three months ended Sept. 30 from 1.66 billion francs in the period a year earlier. The trading loss and charges linked to a cost-cutting plan were partly offset by an accounting gain on the bank’s own credit of 1.8 billion francs and the sale of some investments.