Europe’s top banks cut 80,000 more staff in post-crisis overhaul (Bloomberg)
Europe’s largest banks cut their staff by another 3.5 percent last year and the prospect of a return to pre-crisis employment levels seems far off, despite the region’s fledgling economic recovery. Spurred into action by falling revenue, mounting losses and the need to convince regulators they are no longer “too big to fail”, banks across the globe have shrunk radically since the 2008 collapse of U.S. bank Lehman Brothers sparked the financial crisis. Last year, the tide of bad news began to turn for European banks, which are among the region’s largest employers. Helped by recovering economies and receding fears for the euro zone’s future, the benchmark Stoxx Europe 600 Banks index .SX7P rose 19 percent, outpacing the 17.4 percent increase in multi-sector stocks. But despite the improved outlook, Europe’s 30 largest banks by market value cut staff by 80,000 in 2013, calculations by Reuters based on their year-end statements showed.
High-Frequency Traders Set for Curbs as EU Reins In Flash Boys (Bloomberg)
European Union lawmakers are poised to approve some of the toughest restrictions in the world on high-frequency trading, the first crackdown in the aftermath of Michael Lewis’s latest book, “Flash Boys.” The curbs are part of revamped EU markets legislation spanning from commodity derivative speculation to investor protection. The high-frequency trading limits include standards meant to keep the price increment for securities from being too small, mandatory tests of trading algorithms and requirements that market makers provide liquidity for a set number of hours each day.
CME Gave High-Frequency Traders Peek at Market, Lawsuit Claims (Bloomberg)
The Chicago-based company, owner of the Chicago Mercantile Exchange and the Chicago Board of Trade, offers futures based on interest rates, equity indexes, currencies, energy products and agricultural commodities. The plaintiffs, in their complaint against CME and CBOT, allege “a fraud on the marketplace” and seek class-action status on behalf of exchange users. CME denied their accusations in a statement. Sometime after the start of 2007, the CBOT and CME began letting HFTs peek “at all orders to buy and sell futures contracts before they were reflected” to the rest of the market, according to the complaint filed April 11 in federal court in Chicago. That glimpse occurred “before the person or entity entering the buy or sell order received confirmation that their order was received — in other words before anyone other than the HFTs were privy to this information.”
Hedge Funds Wield Risky Legal Ploy to Milk Buyouts (WSJ)
When Dole Food Co. sold itself last year to its founder for $1.2 billion, many market watchers saw just another in a string of buyouts. A few investors saw an opportunity to squeeze the buyers for potentially millions of dollars more, using an arcane—but increasingly popular—legal process known as appraisal. Merion Capital LP bought 7.5 million shares of the fruit company in the days before Dole’s October stockholder meeting. It rejected the $13.50-a-share deal price and, alongside three other hedge funds, is seeking more in court through appraisal. Dole’s buyout highlights the rise of “appraisal arbitrage,” in which hedge funds buy shares of companies on the brink of a buyout and ask a judge to award them a higher price. These lawsuits have risen sharply as a growing group of investors looks to extract more money from corporate takeovers.
Gisele audited by IRS after making Forbes ‘rich list’ (NYP)
Gisele Bundchen has revealed that she was audited by the IRS just because she was placed on the Forbes Supermodel Rich List. “It’s sad, because the people who write these things don’t have my bank-account details,” she laughs. “I do OK, I earn plenty, but not as much as they say. I’ve already been audited by the IRS because of this list, and, truthfully, whether I’m on this list or not doesn’t interest me,” the Brazilian supermodel told Vogue magazine on Friday. Mrs. Tom Brady went on to say she’s no different than you or me. “I’ve got the same interests, the same day-to-day life, as any woman. I want to raise my children well, be a good wife and work. This is what I value: Are my children educated, is my husband happy, are people feeling positive energy from me? There should be a magazine to quantify knowledge, understanding and love for people: That is power.”
Executive Pay: Invasion of the Supersalaries (NYT)
The current system of executive compensation, with its emphasis on performance, can theoretically constrain pay, but in practice it has not stopped companies from paying their top executives more and more. The median compensation of a chief executive in 2013 was $13.9 million, up 9 percent from 2012, according the Equilar 100 C.E.O. Pay Study, conducted for The New York Times. The 100 C.E.O.s in the survey took home a combined $1.5 billion last year, a slight rise from 2012. And the pay-for-performance metrics — particularly the idea of paying executives with stock to align their interests with shareholders — may even have amplified that trend. In some ways, the corporate meritocrat has become a new class of aristocrat.
Reforms to IMF hit serious deadlock: G20 official (Reuters)
Reforms to the International Monetary Fund have hit a deadlock despite a declaration from global financial chiefs that they would move forward without the United States if it fails to ratify the changes by year-end, a G20 official said on Sunday. The inability to proceed with giving emerging markets a more powerful voice at the IMF and shoring up the lender’s resources appeared the most contentious issue for officials from the Group of 20 leading economies and the representatives for all IMF member nations who met over the weekend. In a final communique, G20 finance ministers and central bankers said they were “deeply disappointed” with the U.S. delay.
Singapore Maintains Currency Stance as Economic Growth Slows (Bloomberg)
Singapore’s central bank maintained its pace of currency appreciation, seeking to curb inflation while supporting growth as the economy expanded less than analysts estimated last quarter.
Hedgie not sold on Loeb for Sotheby (NYP)
Art aficionado Christopher Tsai, 39, who runs Tsai Capital, a much smaller hedge fund in New York — and owns 40 works, considered one of the world’s largest collections, by the world-famous Ai Weiwei of China — had this advice for Loeb: Get real. Tsai doesn’t see a lot of value in Sotheby’s stock, regardless of any future window dressing and the recent sell-off. “This is a cyclical name, and one is paying 18 times 2014 earnings for a company that is producing close to record revenue and healthy earnings,” Tsai told The Post. “That’s a lot different than paying 18 times for trough earnings. For that reason, despite any change that Loeb may facilitate, [Loeb’s] investment could wind up taking a long time before paying off in a meaningful way.”
KFC debuts chicken drumstick corsage (CNBC)
The fried chicken purveyor has debuted the first (to our knowledge) chicken drumstick corsage to add a little poultry to the prom this year. For just $20, buyers will receive a corsage kit from a Louisville, Ky. florist, which includes a $5 KFC gift card that can be used for a drumstick of one’s choice—Extra Crispy, Kentucky Grilled Chicken or Original Recipe. (The site advises whichever best matches the dress. We suggest whatever’s least greasy.) Act fast, though, because only 100 corsages are available.