Akin to drip torture, there are now daily news items on the
subject of bankers’ (mis)conduct or excessive risk taking. Buried in the back pages of the FT we learn
of the FINRA fines (last week).Monday’s FT had another innocuous article with
the lead
“City of London trading desks at several big investment banks
lost money after the collapse of AbbVie’s $54bn takeover offer for Shire,
raising fresh questions about whether banks are skirting a ban on making
speculative bets with their own funds”.
And
the Tuesday FT (you can read it Monday night) continues with the story
“Last month, there was a hint of what might be around the corner,
when it emerged that Wells Fargo and Barclays had exposure to big potential
losses on an oil loan — specifically, $850m of funding granted earlier in the
year to back the merger of US oil groups Sabine and Forest.”
Jenkins
cites a report :
“New
research from Alliance Bernstein highlights the extent of US banks’ exposure.
Wells Fargo tops the list. It participated in $37bn of non-investment grade
loans from 2012 to 2014. Only JPMorgan, with $31.7bn of deals, comes close.”
Read it
again…that’s B as in Billion. I have not read the report, but while I look at yesterday’s
report I think we can anticipate another one tomorrow. This is about principles
based vs. rules based regulation. If the
banks want more rules for compliance they should keep away from obvious excess
risks, period.
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