Body armour and a very thick skin

Large banks operating in the US have submitted, as required, blueprints to regulators for dismantling their operations if they fall into difficulties. But lawyers have warned that the plans from European banks will likely prove insufficiently detailed for the US Federal Reserve and Federal Deposit Insurance Corporation when they come to critique the submissions later this year. The regulators have been aggressive with US domestic banks in recent years, pushing them into making heavily detailed submissions finally delivered last week....

Five years after US Congress signed Dodd-Frank into law – the largest piece of financial market infrastructure overhaul since the Great Depression – financial regulators and market participants doled out lukewarm approval for the legislation. The law has been the subject of intense criticism from federal officials requesting a repeal of the entire legislation, while financial institutions continue to chip away at the less savoury portions for their businesses. Public statements last week were largely in defence of a piece of legislation that...

Cerberus Capital-backed Albertsons Companies has formalised plans to go public by submitting preliminary documents with the SEC. The grocer becomes the latest in a string of highly leveraged, private equity-backed companies that could go public before year-end. The filing, which nominally outlines a US$100m all-primary raising, comes less than a year after the grocer acquired rival Safeway, and provides significant new details on the continuing integration of the companies. Albertsons, purchased by Cerberus for US$17bn in a leveraged buyout...

The ECB published a eagerly awaited update on Monday on the guiding principles that drive its purchases in the ABS sector, partly soothing the widespread disappointment in the industry about the level of transparency it delivered during the first phase of the programme. The central bank was considered by many to have been overly conservative in its approach, favouring already established names and markets rather than influencing dynamics in the periphery and sectors that needed a boost. However, the other side of the coin, structured finance...

China’s desperate measures to prop up its stock market are alienating international investors, after widespread stock suspensions and trading restrictions underlined the risks facing fund managers in the immature mainland market. The precipitous sell-off that has wiped more than US$3trn from Shanghai’s market value in less than a month has triggered unprecedented levels of intervention from mainland regulators. After previous measures failed to stem the rout, China last week froze IPOs, blocked major shareholders from selling stock and...

Bank loan mutual funds outperformed corporate bond funds in the second quarter, and are expected to do so for the remainder of 2015, with investors turning to shorter-term assets as a result of unfolding global economic turmoil. Floating-rate leveraged loans typically draw retail buyers when interest rates rise, and also have the advantage of continuing demand that is surpassing supply. US syndicated loan issuance of about US$517bn in the second quarter was 13% below the year-ago pace due to regulatory restrictions on high-risk lending and...

With the spectre of Grexit still hanging over European markets, ABS analysts are considering what would happen to Greek securitisation trades in the aftermath of the country leaving the single currency – with differing views on the potential severity for investors. Overall, the risk of a redenomination in drachma would not directly impact on ABS bonds as they are generally issued from SPVs structured under British law, analysts said. However, if this feature protects bondholders from a direct devaluation of their paper, the possibility of a...

YOU WAIT AGES for a crisis and then two come along at once. It’s now all about China and not Greece and the former’s recent stock market price action over just a few days resembles the kind of free-fall we haven’t seen since the worst of the global financial crisis. I wonder if Nobel prize economics laureate Paul Krugman is smiling right now since he has for quite a few years warned of China facing its “Great Wall” in the form of an economic collapse. But hold on a moment. For now it’s just falling Chinese stock prices, however precipitous...

European and US regulators are understood to be close to an agreement that would deem the two regimes for central counterparty clearing equivalent. The deal, expected in October, would end a long-running trans-Atlantic spat on margin calculations, but it may be just a taste of the complex cross-border issues still to be thrashed out after the frenzied pace of Dodd-Frank left other jurisdictions struggling to catch up. “By being the first mover, the CFTC has been able to set the pace, but along the way they asserted quite expansive...

The Goldman Sachs merger machine kept rolling in the second quarter as the firm took some key departures in its stride. Veteran banker William Anderson decamped from Goldman for boutique investment bank Evercore Partners at the end of the second quarter, potentially creating a hole in a lucrative fee area – advising companies on how to defend themselves in an era of heightened shareholder activism. Goldman does not break out fees from this advisory service but the activity does contribute to the overall advisory revenue line, which was...

Extreme volatility and a 20% discount on a US$800m-plus block trade from a Chinese state fund have raised fears that recent share sales have exposed Hong Kong to the kind of trading patterns more often seen in the mainland’s far less mature equity markets. The distressed share sale also offered a reminder of the risks investment banks take by providing share-backed financings to their Chinese clients at a time of major market volatility. In a week rich in dramatic developments, when Chinese shares first crashed and then rebounded after...

Chorus Clean Energy cancelled its public offering on Wednesday after extending the bookbuilding period by one week in the hope that markets would have been more receptive once the results of the Greek referendum were known. The renewable energy specialist said in a press release that the deal was pulled because the Greek impact on global financial markets meant investors balked at its valuation, and it was not in its interest or in the interest of existing shareholders to list the company below value. The company planned to issue 8m–10.25m...