Banks and Banking

Must Read

NYT: The Wolf Hunters of Wall Street

Author: Michael Lewis

"Katsuyama and his team did measure how much more cheaply they bought stock when they removed the ability of some other unknown trader to front-run them. For instance, they bought 10 million shares of Citigroup, then trading at roughly $4 per share, and saved $29,000 — or less than 0.1 percent of the total price… It sounded small until you realized that the average daily volume in the U.S. stock market was $225 billion. The same tax rate applied to that sum came to nearly $160 million a day."

See more in North America; Banks and Banking

Op-Ed

What Europe Can Learn From the U.S. Bank Crisis

Authors: Benn Steil and Dinah Walker
Wall Street Journal

Benn Steil's latest op-ed in the Wall Street Journal, co-authored with Dinah Walker, explains why the ECB's anticipated foray into more aggressive monetary stimulus next week won't have any significant effect on the availability and cost of private-sector credit. The ECB believes that its ongoing bank stress tests will help revive the eurozone's moribund banking industry, but we argue that the tests are counterproductive without a mechanism in place to assure sufficient recapitalization of banks that fall short—as there was in the United States in 2009.

See more in Europe; Banks and Banking

Must Read

FT: The Scandal at the Vatican Bank

Author: Rachel Sanderson

"After a decade of paedophilia scandals, the allegations of financial impropriety seemed set to unleash another storm of criticism and had to be addressed. Outside auditors as well as financial risk consultants were already coming into the Vatican but the arrest of Scarano made the case for reform unavoidable. "We cannot have any more scandal. It is so shameful," a senior member of the Vatican's financial administration said."

See more in Holy See/Vatican; Banks and Banking

Must Read

Financial Times: Money Mirage Exposes Emerging Markets

Author: Gillian Tett

"As money has rushed into emerging markets in recent years, this has created an image of abundant liquidity. But this image may be dangerously illusory, some policy makers fear, as one of the little-noticed ironies of the 2013 financial system is that there may now be fewer–not more–shock absorbers in the markets than there were before 2008. This factor may explain why this summer's gyrations in emerging market assets were so dramatic."

See more in Global; Banks and Banking

Must Read

Wall Street Journal: This Bond Manager Hates Bonds

Author: Tommy Stubbington

"Managing a bond fund these days is a peculiar business. Global central banks have aggressively supported government bonds, driving up—many would say distorting—their prices. Market observers generally agree that support will eventually ebb, bringing prices back down and bond yields up, but no one can be certain when. What is an investor to do?"

See more in Europe; Banks and Banking