You are currently browsing the monthly archive for December 2006.

It has been a fairly slow last couple of weeks – sorry ’bout that. News has been fairly slow and I have been on holiday overseas. Normal service will resume over the next couple of days.

Deutsche Bank has joined the lists of those launching Shari’a compliant products, launching a series of mutual funds. These include a precious metals fund and several equity funds. The pity is that these are currently restricted to UAE and Bahrain investors only.

Who’s next?

The FSU (the Australian Finance Sector Union) has launched a new website – Bank Check – as part of its campaign against offshoring. This is an interesting, and perhaps inevitable, move. Customers do deserve to know where their data is going and the banks need to do more to make a case for it, so that naked scare campaigns have less of an effect. I would prefer that the FSU were more balanced in their approach to this – there is the presumption behind the site that all offshoring is bad – but to expect that from them is to expect a bit much.

I am also interested that they concentrate on offshoring only, rather than outsourcing – where domestic outsourcing is done the FSU is ignoring it. This gap shows where they are truly making their case – a seeming belief that things are less secure if outside Australia. Granted, the legal protections can be less secure and there has been some publicity on data theft in India, but to implicitly say, as the FSU is doing, that overseas is bad and domestic is good is just plain wrong. Still – it is up to the FSU to protect the jobs of its members and for the banks seeking to outsource to make the case to their customers.

Today’s finextra has a piece on the merger announced between the Bank of New York and Mellon Financial. While I think this ends up with one of the more “interesting” acronyms of recent times (1970s disco band, anyone?) I am trying to think of other silly bank acronyms out there.

Submission invited.

The collapse of Amaranth earlier this year, with a loss of about USD6 billion, was easily absorbed by the financial markets, a far better reaction than the collapse of LTCM in 1998, with a smaller loss (USD 4.5b).

An interesting speech by Lars Nyberg, deputy governor of the Swedish central bank, entitled “Are hedge funds dangerous?” goes through many of the issues that arise from hedge fund market operations very well and covers the three differing types of hedge funds quickly, but understandably. Read the rest of this entry »

It would be funny if it were not so serious. The (so-called) Basel IA rules either may, or might not, be released for public comment on December 5. The FDIC is ready to initial them, but the other regulators probably will not be. This means the full Basel II rules will remain open for public comment throught the period when most other places on the planet have actually started implementing them (OK – only the standardised parts that are being ignored in the US, but you get the idea).

Surely this means the target implementation date will also be set back – banks the size of the 20 largest in the US, those implementing the accord, must have a target to shoot at and, at the moment they only have a fuzzy idea of it, and one that could change anyway. The lack of discussion between the regulators and the regulated, the late rule making, the uncertainly if they are even going to be allowed to reap the benefits of the improved risk sensitivity – what next?

If the US regulators just really thought about it, the full set of rules they should implement are here, with associated commentary here. It would be a great improvement.

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