Showing posts with label bailout. Show all posts
Showing posts with label bailout. Show all posts
Saturday, 11 July 2009
Banks Risky Funding Sources
When Nevada's Silver State Bank failed in September around two thirds of its loan portfolio comprised real estate development and construction loans. The practice of "hot money" or brokered deposits has also been blamed for small bank failures in the US.
Saturday, 17 January 2009
Barclays Bank Shares Tumble 25% in Friday Trading, BoA drops 13.7% on Q4 Results
Barclays shares fell 25%, hours after the ban on short-selling was lifted. Speculation surrounds further credit writedowns at Barclays Capital (managed by this team). Are we heading for nationalisation of Barclays?
BoA reported 2008 full-year profit of $4.01 billion compared with net income of $14.98 billion for 2007. The full-year profit was greatly impacted by a Q4 loss of $1.79 billion. These results include Countrywide Financial, acquired 1 Jan 2009, but not Merrill Lynch. Bank of America this month raised $2.8 billion by selling under 15% of its shares in China’s second-largest bank, China Construction Bank.
According to their press release, Bank of America ended 2008 with a Tier 1 capital ratio of 9.15 percent. Additional capital from the Treasury will boost the company's Tier 1 capital ratio to approximately 10.70 percent, on a pro-forma basis. T1C is a Basel-measure, measuring the ratio of the bank's core equity capital to risk-weighted assets. The Basel accord specifies capital adequacy requirements for banks, "le contrôle bancaire".
BoA reported 2008 full-year profit of $4.01 billion compared with net income of $14.98 billion for 2007. The full-year profit was greatly impacted by a Q4 loss of $1.79 billion. These results include Countrywide Financial, acquired 1 Jan 2009, but not Merrill Lynch. Bank of America this month raised $2.8 billion by selling under 15% of its shares in China’s second-largest bank, China Construction Bank.
According to their press release, Bank of America ended 2008 with a Tier 1 capital ratio of 9.15 percent. Additional capital from the Treasury will boost the company's Tier 1 capital ratio to approximately 10.70 percent, on a pro-forma basis. T1C is a Basel-measure, measuring the ratio of the bank's core equity capital to risk-weighted assets. The Basel accord specifies capital adequacy requirements for banks, "le contrôle bancaire".
Friday, 3 October 2008
UK FSA to guarantee bank deposits up to £50K, Wells Fargo buys Wachovia, Ken Lewis attacks "Typical Wall Street pay", Bailout is Passed -Will it Work?
Up from £35K guarantee. An important point identified by the BBC: "At the moment, customers are only covered for one account under each banking licence so if you have two accounts with banks that are owned by the same parent company you will only have a total of £50,000 guaranteed". Joint accounts are covered for double.
Payments are made through the Financial Services Compensation Scheme (FSCS). Banks outside EU are also covered since they contribute to the scheme as well.
US bank Wells Fargo will buy rival Wachovia in a $15.1bn (£8.5bn) deal, spoiling an earlier proposal for a Wachovia-Citigroup takeover.
On the recent $50bn BoA-Merrill deal, Ken Lewis commented on the future for Merrill's. "Merrill was paying typical Wall Street pay. Their staff people were making a lot more than our staff people. That won't last. We intend to pay market instead."
The most historical intervention of the US government in the economy since the Great Depression happened today as the Senate-amended bailout is passed. FedReserve Chairman Ben Bernanke said he welcomed the news. Could this be the start of the end of the worst financial storm since 1929?
Payments are made through the Financial Services Compensation Scheme (FSCS). Banks outside EU are also covered since they contribute to the scheme as well.
US bank Wells Fargo will buy rival Wachovia in a $15.1bn (£8.5bn) deal, spoiling an earlier proposal for a Wachovia-Citigroup takeover.
On the recent $50bn BoA-Merrill deal, Ken Lewis commented on the future for Merrill's. "Merrill was paying typical Wall Street pay. Their staff people were making a lot more than our staff people. That won't last. We intend to pay market instead."
The most historical intervention of the US government in the economy since the Great Depression happened today as the Senate-amended bailout is passed. FedReserve Chairman Ben Bernanke said he welcomed the news. Could this be the start of the end of the worst financial storm since 1929?
Wednesday, 1 October 2008
Bailout Approved by Senate, Buffet puts $3bn into GE
Late Wednesday night the Senate voted in favour of the bailout (74 votes to 25).
Berkshire Hathaway invested $3bn in preferred stock of GE, whose shares have slid about one-third this year. Eight days previous Berkshire put in $5bn into GS in a similar deal.
Berkshire Hathaway invested $3bn in preferred stock of GE, whose shares have slid about one-third this year. Eight days previous Berkshire put in $5bn into GS in a similar deal.
Friday, 19 September 2008
USD500bn (NAY 700 BILLION) rescue plan, Shorts close positions, Market Rallies
One of the biggest one-day rallies in history resulted from investors betting on a US$500 billion plan to fix the credit crunch, buying toxic bank assets to free up credit markets.
CNN reports that this week alone, investors had withdrawn $210bn from money market funds. This was precipitated by the news of soured investments from Reserve Management Co. due to investments in Lehman Bros.
"What they're doing is jumping from crisis to crisis," said Senator Shelby, on the Federal Reserve and Treasury.
CNN reports that this week alone, investors had withdrawn $210bn from money market funds. This was precipitated by the news of soured investments from Reserve Management Co. due to investments in Lehman Bros.
"What they're doing is jumping from crisis to crisis," said Senator Shelby, on the Federal Reserve and Treasury.
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