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What is the latest on the financial sector around the world - EY - India

Finesse: March-June 2011

Financial sector news: Global economy

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What is the latest on the financial sector around the world? Watch this space for some of the recent developments.

 

DateNews
24 JuneAccording to the estimates of investment bankers, US$16 billion worth of live or planned deals between banks are in the process of being formulated in Asia, making the Financial Institutions Group (FIG) the most active sector in M&A in 1H11. Domestic consolidation to improve operational efficiency and the entry of foreign players in Asian markets is driving inbound M&A activity in the continent.i
27 MayBanks in the EU may be able to evade some Basel III requirements, and this may allow them to account for more capital as part of their insurance subsidiaries than prescribed by global rules. Moreover, these banks may also be allowed to continue issuing hybrid capital for longer than expected.ii
17 May

The EU plans to convert globally agreed upon stringent rules for more than 8,000 banks into law. The draft EU law, which aims to make Basel III requirements binding on lenders in the 27 member states in the block, is likely to be published soon.iii

29 AprilThe Federal Reserve has begun to assign an on-site senior supervisory officer for the largest financial firms as part of its efforts to strengthen its supervision and lines of communication with chief executives and directors.iv
14 April

The frantic pace of expansion initiated by international banks in China has led to a shortage of financial industry talent, causing a rise in wages and employee turnover rates. Banks are expanding their operations in an attempt to prepare themselves in advance for a record fund-raising boom in the country over the next five years.v

12 AprilThe UK’s Independent Commission on Banking, appointed last year to study ways to make the banking industry safer and more competitive, has recommended that institutions with retail and investment banking operations should maintain separate pools of capital for each of these business lines. Although banks have lobbied against this, they find it favorable, compared to the option of splitting universal banks into retail and investment banking companies, which many had earlier feared would be recommended.vi
14 MarchThe earthquake that devastated Japan caused losses in insured property of as much as US$35 billion. Boston-based AIR Worldwide estimated that the quake caused insured property losses of US$15 billion to US$35 billion. If claims are placed at the middle of that range, the cost of the disaster would surpass all other natural catastrophes except for Hurricane Katrina 2005.vii
7 MarchAsia's growing wealth is causing a major movement of personnel in the world of hedge funds, with global funds looking to establish a foothold and star managers moving out.viii

 

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Sources:

i“Bank deals seen driving Asian M&A,” Reuters News, 24 June 2011, via Dow Jones Factiva, © 2011 Reuters Limited.

ii"RPT-EU banks could evade some Basel III requirements-FT," Reuters News, 27 May 2011, via Dow Jones Factiva, © 2011 Reuters Limited.  

iii"UPDATE 2-EU to publish draft bank capital rules in July," Reuters News, 17 May 2011, via Dow Jones Factiva, © 2011 Reuters Limited.

ivKristina Cooke, “NY Fed deploys senior supervisors to Wall Street,” Reuters News, 29 April 2011, via Dow Jones Factiva, ©2011 Reuters Limited.

v"Factbox-Global banks face talent shortage as China booms," Reuters News, 14 April 2011, via Dow Jones Factiva, © 2011 Reuters Limited.

viDavid Enrich, “Global Finance: Big Banks in U.K. Dodge Breakup,” The Wall Street Journal, 12 April 2011, via Dow Jones Factiva, © 2011, Dow Jones & Company, Inc.

viiErik Holm and Ulrike Dauer, "Moving the Market: A Big Hit to Insurers --- Disaster Threatens to Be Costliest Ever for the Industry," The Wall Street Journal, 14 March 2011, via Dow Jones Factiva, © 2011, Dow Jones & Company, Inc.

viiiErik Holm and Ulrike Dauer, "Moving the Market: A Big Hit to Insurers --- Disaster Threatens to Be Costliest Ever for the Industry," The Wall Street Journal, 14 March 2011, via Dow Jones Factiva, © 2011, Dow Jones & Company, Inc.

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