Six years and countless working lunches after the financial crisis began, European regulators have at last nearly come to grips with one of its root causes. Read more »
Things in Cyprus: kinda bad. There are better places than here to read about it; I particularly recommend Joseph Cotterill here and here, pseudo-Paweł Morski here and here, Mohammed El-Erian here, the FT’s coverage here and here, the Journal’s round-up of analyst reaction here, etc.
The basic story is that Cyprus’s government and banks are both massively overindebted and need a bailout, and the EU and IMF will provide a €10bn bailout, but they demanded that Cyprus chip in some €7bn, which it has decided to do by means of a tax on deposits in Cypriot banks of 6.75% for up to €100,000 and 9.9% above €100,000. (Is that rate on bigger deposits marginal or absolute? No one knows!) Those numbers are being renegotiated and may end up not being approved by Cyprus’s parliament.
Getting caught money-laundering for the Iranians and drug cartels is pretty bad for business, as HSBC’s 2012 results demonstrate. But coming into compliance with all these new banking regulations is even worse.
Disgraced though HSBC may be, what with the $4 billion-plus it paid in fines to regulators last year, and the 17% drop in profit that entails, the old Hongkong and Shanghai Banking Corp. managed to shrink less than its friends in Frankfurt in an unusual race backwards, thereby dethroning the Germans as Europe’s largest bank. Read more »