Bank of England Governorship Up for Grabs

With Mark Carney due to step down, the governorship for the Bank of England is up for grabs.

Names "in the frame" include Agustin Carsens, former Central Bank governor of Mexico who is now general manager of the BIS, and Raghuram Rajan, former Central Bank governor of India.

American economist Jason Furman, who has a PhD from Harvard and is currently a Professor at HKS and was Barack Obama's Chief Economic Adviser for eight years, has also been tipped as being in the race. He has also worked at the CEA (Council of Economic Advisers).

Other names include Andy Haldane, Chief Economist at the Bank of England, whose six-year term at the BoE ends on 11 June 2020. A founder of "Pro Bono Economics" and author of 4 books, he is also a Visiting Fellow at Nuffield College, Oxford. He has a Fellowship of the Academy of Social Sciences (FAcSS). He is also Chair of the UK government's Industrial Strategy Council.

UBS Posts Q1 2019 Results - 1.1bn USD Profit Despite Drop in IB Revenues

Huge drop in Investment Banking revenues but still more than a Billion Dollars in Quarterly Profit

UBS posted a 21% fall in wealth management and 64% drop in investment banking revenues for Q1 2019. "Profit" came in at 1.1bn USD (with PBT coming in at USD 1.5bn).

A Closer Look at UBS' Capital Ratios

13%  CET1 capital ratio. How do we interpret this 13% number? Basel III capital rules require all banks to maintain a minimum CET1 to RWA ratio of 4.5% by 2019. CET1 is a capital measure introduced in 2014 to protect the economy from financial crisis - the mandating of a minimum requirement ensures banks have a financial "cushion" to absorb unexpected losses. Thus UBS has almost three times the minimum requirement. CET1 stands for Common Equity Tier 1 which is a component of Tier 1 capital that consists mainly of common stock held by a bank or other financial institution.

A quick recap on the calculation -

CET1 Ratio = Common Equity Tier 1 Ratio = Common Equity Tier 1 Capital / Risk Weighted Assets

CET1 capital is at the bottom of a bank's capital structure implying in the event of a crisis, losses are first deducted from this tier. If the ratio falls below minimum level required by regulators, banks must build back that capital layer or risk being shut down or taken over. Dividend payments and employee bonuses may be restricted during this time.

Leverage -
3.8% CET1 leverage ratio
5.4% Tier 1 leverage ratio

"The UK Retail Trading Environment is Tough" - Monsoon Accessorize Spokesperson, As Company Mulls CVA

Monsoon Accessorize, owned by its founder Sri Lanka-born Peter Simon, who was inspired to start the company following a road trip, declared via a spokesman that "The UK retail trading environment is tough" and in a bid to reduce costs will continue to reduce its store portfolio. Deloitte has been hired to help the firm negotiate a CVA or company voluntary arrangement, a controversial insolvency procedure used by firms like Debenhams, New Look, Mothercare and Byron in recent years.

Revenues at Companies where UK Executive Pay is at Its Highest

Persimmon PLC, a FTSE 100 British company headquartered in York, UK, is the company with the highest executive pay, with ousted Chief Executive Jeff Fairburn earning £47.1m. He joined the company in 1989 and became CEO in 2013. Persimmon's former Chairman resigned in his role in awarding Jeff a £100m+ bonus. 2018 revenues at Persimmon were £3.7bn in 2018. Its current Group Chief Executive is Dave Jenkinson.

Eurex to Pilot PLP - Passive Liquidity Protection (aka Passive Order Protection) in June 2019

The Eurex will be trialling this feature in a pilot phase, which they have named PLP, in June 2019 for German and French equity options traded on Eurex T7 (this will be activated in the simulation environment in March 2019).

More broadly, exchanges and regulators have been trialling out passive order protection or passive liquidity protection, whereby orders resting in the system are not given priority execution.

The idea is to "level the playing field" between high frequency trading investors and constitutes a form of "latency protection".

EuroStoxx has gained around 300 points in 4 months from December 2018 to April 2019

The EuroStoxx has been on an almost straight line trajectory from end December 2018 to April 2019.  2937 on 29 December 2018 has lifted to 3351 on 1 April 2019 supporting the notion that "the trend is your friend". The gain is around 12%.

New variations on the EuroStoxx include the recently launched EuroStoxx 50 Low Carbon, part of the new ESG benchmark index futures from Eurex. Data sources used include CDP (Carbon Disclosure Project) and IIS-Ethix Climate Solutions. Regional variations include STOXX USA Low Carbon and STOXX Japan Low Carbon.