THESE ARE THE TEN BIGGEST BANK FINES OF 2020
ValueWalk, 07 May 2021
Banking regulators around the globe were busy last year despite the Covid-19 pandemic. Like any other year, the regulators imposed heavy fines on banks and financial institutions for a range of indiscretions, including money laundering, tax evasion and market manipulation. It is estimated that total bank fines amounted to more than $14 billion in 2020, with the U.S. accounting for the majority of them with 12 bank fines. Anti-money laundering (AML) breaches were the most common violation last year. Detailed below are the ten biggest bank fines of 2020. Continue reading “Article: THESE ARE THE TEN BIGGEST BANK FINES OF 2020”
Credit Suisse Basically Headquartered In Court These Days
JON SHAZAR, 30 April 2021
Thomas Gottstein has been CEO of Credit Suisse for 63 weeks. There is no doubt that the overwhelming majority of them, and indeed all of the last eight or so, have been waking nightmares. Surely, however, there have been some consecutive five-day calendrical periods that he has enjoyed the job he has presumably been pining and preparing for most if not all of his professional career, some Fridays when he walked out of his office with a genuine spring in his step and ability to enjoy the weekend as much as any Swiss can enjoy such a frivolity.
This was not that week.
Bank of America Corp. Credit Suisse Group AG and Credit Agricole SA were fined about 28.5 million euros ($34 million) by European Union regulators for colluding in chatrooms on trading of U.S. supra-sovereign, sovereign and agency bonds. Continue reading “Article: Credit Suisse Basically Headquartered In Court These Days”
Deutsche Bank Avoids Archegos Meltdown, Reports Profit Surge
Patricia Kowsmann, 28 April 2021
Deutsche Bank AG reported its strongest quarter in seven years thanks to activity at its investment bank, while the lender escaped the implosion of Archegos Capital Management that badly hit some rivals.
The news sent Deutsche Bank shares up 10% on Wednesday, their highest level since May 2018. Also helping its bottom line were lower charges on bad loans, as customers seemed to be weathering the pandemic effects better than expected.
The bank benefited from frenzied investor activity in financial markets. Its business advising clients on fundraising and mergers and acquisitions also boomed, as companies repositioned growth plans during the pandemic. A cost-savings plan imposed to turn the lender around following years of bad results is also helping. The bank reported a cost-to-income ratio of 77% compared with 89% a year ago. Continue reading “Article: Deutsche Bank Avoids Archegos Meltdown, Reports Profit Surge”
BofA Hit Hardest as EU Fines Bond-Trading Trio $34 Million
Aoife White, 28 April 2021
Bank of America Corp. Credit Suisse Group AG and Credit Agricole SA were fined about 28.5 million euros ($34 million) by European Union regulators for colluding on trading of U.S. supra-sovereign, sovereign and agency bonds.
Bank of America got the largest individual penalty of 12.6 million euros, while Credit Suisse was fined 11.9 million euros and Credit Agricole was ordered to pay more than 3.9 million euros. Deutsche Bank AG participated in the cartel but dodged a potential penalty of about 21.5 million euros because it was the first to inform the EU about the illegal behavior. Continue reading “Article: BofA Hit Hardest as EU Fines Bond-Trading Trio $34 Million”
The Weird, Extremely German Origins of the Wirecard Scandal
Adrian Daub, 21 April 2021
German scandals are not like other scandals. The bouquet of a classic German scandal contains unmistakable notes: a rabbit-hole impenetrability, the implication of an entire guilt-ridden society, and, most importantly, a sense that the controversy says something essential about Germany as a whole. German scandals are collectivized. They are about a belief in German difference, for good or ill.
The rise and fall of the financial services giant Wirecard is such a scandal. Wirecard, whose products facilitated e-commerce payment transactions, was the rare German startup that seemed primed to become a “global player”—a phrase with special resonance in a country that, despite all evidence to the contrary, still perceives itself as being small-time. The company was founded in 1999, survived the dotcom-bubble, began a massive expansion into Asia in the middle of the financial crisis, and, later, began another expansion into the Middle East. Continue reading “Article: The Weird, Extremely German Origins of the Wirecard Scandal”
German Regulator Accuses Deutsche Bank Board Member Of Insider Trading Linked To Wirecard
TYLER DURDEN, 20 April 2021
For a minute there, it appeared that Credit Suisse might have snatched Deutsche Bank’s crown as the most dysfunctional bank in Europe as the Swiss lender struggled with the fallout from the Archegos blowup and the collapse of Greensill (a scandal that has set off a massive corruption scandal in the UK, and triggered renewed calls for regulatory reform in the European financial system). CS has announced billions of dollars worth of losses tied to the scandals, fired its head of risk and nearly half a dozen other senior employees, and taken other steps in an attempt at penance. But on Monday, Deutsche Bank, which seemingly can’t go more than couple of quarters without a scandal, has found itself in the headlines once again. Continue reading “Article: German Regulator Accuses Deutsche Bank Board Member Of Insider Trading Linked To Wirecard”
Morgan Stanley reveals nearly $1B loss from Archegos implosion
Reuters, 16 April 2021
Morgan Stanley lost nearly $1 billion from the collapse of family office Archegos Capital Management, the bank said Friday, muddying its 150 percent jump in first-quarter profit that was powered by a boom in trading and deal-making.
Morgan Stanley was one of several banks that had exposure to Archegos, which defaulted on margin calls late last month and triggered a fire sale of stocks across Wall Street. Continue reading “Article: Morgan Stanley reveals nearly $1B loss from Archegos implosion”
Ex-Deutsche Traders Urge 2nd Circ. To Nix Libor Convictions
Stewart Bishop, 14 April 2021
Two former Deutsche Bank traders on Wednesday argued that the Second Circuit should reverse their convictions for Libor-rigging, saying the government failed to prove they violated any of the applicable rules governing the benchmark interest rate.
Matthew Connolly and Gavin Black in 2018 were convicted at trial of wire fraud and conspiracy for their roles in a purported scheme to tweak lending estimates included in Libor to benefit the bank’s derivatives trading positions. Continue reading “Article: Ex-Deutsche Traders Urge 2nd Circ. To Nix Libor Convictions”
Can Credit Suisse Avoid Becoming The ‘Deutsche Bank’ Of Switzerland?
TYLER DURDEN, 08 April 2021
Markets were shaken but unstirred by the collapse of Greensill and the Archegos unwind trades. Credit Suisse is the ultimate loser of the two scandals – reputationally damaged and holed below the water line. The bank is paying the price of years of flawed management, poor risk awareness. and its self-belief it was still a Tier 1 global player. Its’ challenge is to avoid becoming the Deutsche Bank of Switzerland – which it will struggle to do without a radical and unlikely shakeout. Continue reading “Article: Can Credit Suisse Avoid Becoming The ‘Deutsche Bank’ Of Switzerland?”
Deutsche Bank dodges bullets and goes mainstream
PATRICK JENKINS , 06 April 2021
It is a striking paradox that postwar Germany has achieved sustained success as an economy, even with a flailing banking sector, headed by the flag-carrying Deutsche Bank, to underpin it. But there are signs the contradiction may be resolving.
Over the past three years, Deutsche has beaten its European rivals in share price terms — sketchy evidence, perhaps, especially as that share price has actually fallen and Deutsche has paid next to no dividends. But it is a notable outperformance nonetheless.
Continue reading “Article: Deutsche Bank dodges bullets and goes mainstream”
In Archegos fire sale, Credit Suisse, Nomura burned by slow exit
Matt Scuffham, Elizabeth Dilts Marshall, Brenna Hughes Neghaiwi, 31 March 2021
NEW YORK/ZURICH (Reuters) -While banks including Goldman Sachs, Morgan Stanley and Deutsche Bank were able to exit their trades with Archegos Capital relatively unscathed, Credit Suisse and Nomura have been burned in the fire sale.
The blowup of the Archegos fund, a family office run by former Tiger Asia manager Bill Hwang, is still reverberating across the financial system, with global banks so far standing to lose more than $6 billion.
Switzerland’s Credit Suisse and Japan’s Nomura are expected to bear the brunt of that. Continue reading “Article: In Archegos fire sale, Credit Suisse, Nomura burned by slow exit”
SEC Opens Probe Into Archegos Chaos, Deutsche Bank Confirms ‘Quick Sale’ To Avoid All Losses
TYLER DURDEN, 31 March 2021
As more details from the now infamous debacle surrounding Tiger cub Archegos, whose massive derivative-based exposures spilled out into the open and transformed into the biggest and most painful rolling margin call to hit Wall Street since Lehman, we now know that at least six Prime Brokers scrambled to unwind the biggest hedge fund blowup since LTCM without hammering the overall market.
To “make a living in this business… be first, be smarter, or cheat…”
We previously noted that Morgan Stanley and Goldman Sachs were the “first” to break ranks and rejected the efforts of Credit Suisse’s emissaries who tried to create consensus to unwind the positions without sparking a panic.
As we now also know, Nomura and Credit Suisse which dithered and were unsure what to do, seeing their stock crushed and their counterparty risk hedge premia explode higher.. Continue reading “Article:SEC Opens Probe Into Archegos Chaos, Deutsche Bank Confirms ‘Quick Sale’ To Avoid All Losses”
A “Very Surprised” JPMorgan Calculates The Damage From The Archegos Collapse
TYLER DURDEN, 30 March 2021
Unlike the devastating London Whale debacle in 2012, which was all JPMorgan eventually drawn and quartered quite theatrically before Congress (and was a clear explanation of how banks used Fed reserves to manipulate markets, something most market participants had no idea was possible), this time JPMorgan was nowhere to be found in the aftermath of the historic margin call that destroyed hedge fund Archegos. Which is may explain why JPMorgan bank analyst Kian Abouhossein admits he is quite “puzzled” by the recent fallout from the Archegos implosion (or maybe JPM simply was not a Prime Broker of the notorious Tiger cub), which however does not prevent him from trying to calculate the capital at risk from the Archegos collapse. Continue reading “Article: A “Very Surprised” JPMorgan Calculates The Damage From The Archegos Collapse”
Taiwan allows Cargill to repatriate $2 billion frozen in currency speculation case: sources
Ben Blanchard, 29 March 2021
TAIPEI (Reuters) – Taiwan’s central bank has allowed U.S.-based commodities house Cargill Ltd to repatriate around $2 billion that had been frozen as part of an investigation into currency manipulation, four people with direct knowledge told Reuters.
The central bank last month punished four foreign banks, including Deutsche Bank for helping grains firms speculate in the deliverable forwards foreign exchange market, as it moved to slow the Taiwan dollar’s rise.
Speaking on condition of anonymity, as they were not authorised to speak to journalists, sources told Reuters that Cargill was one of the main grains companies involved. The central bank has not named Cargill in its communications on the matter. Continue reading “Article: Taiwan allows Cargill to repatriate $2 billion frozen in currency speculation case: sources”
Banking Stocks Credit Suisse, Nomura Reeling From Archegos Hedge Fund Fire Sale
ADELIA CELLINI LINECKER, 29 March 2021
Investment banks Nomura (NMR), Credit Suisse (CS) and possibly others are on the hook for billions of dollars in losses as Archegos Capital Management hedge fund was forced to dump more shares Monday to meet liquidity minimums. Nomura and Credit Suisse stocks plunged more than 10%.
Among the companies affected by the fire sale that started last week are ViacomCBS (VIAC) and Discovery Communications (DISCA). Their shares sank more than 25% on Friday.
Archegos has sold nearly $30 billion in shares so far to meet a margin call. A broker makes a margin call to require a client to add funds to its account if the value of it drops below a certain level. The client, in this case Archegos, has to liquidate investments to meet that requirement. Continue reading “Article: Banking Stocks Credit Suisse, Nomura Reeling From Archegos Hedge Fund Fire Sale”