BY ANTONY CURRIE
Australia’s prime minister in 2008 told Breakingviews how his government decided to spend some 6 pct of GDP on tax breaks, infrastructure and cash payments to citizens. That helped the country heavily exposed to China, commodities, finance and housing avoid a recession – just.
First published Oct. 23, 2018
(Image: REUTERS/Amr Alfiky)
BY ROB COX
Deutsche Bank was credited with coming through the 2008 crisis in better shape than many of its rivals. Jain, who rose from running the German lender’s global markets business to eventually become CEO, stopped by Times Square to speak with Rob Cox about the state of finance.
First published Oct. 15, 2018
(Image: REUTERS/Ralph Orlowski)
BY ROB COX
The founder of Oaktree Capital, with $120 bln of assets, doesn’t see signs of an imminent correction or crisis. But investors, particularly in the credit markets, are acting bullish in ways they’ll inevitably regret when the cycle turns, Marks told Rob Cox earlier in October.
First published Oct. 11, 2018
(Image: REUTERS/Brendan McDermid)
BY ROB COX
The presidency of the Richmond Fed, whose territory included two top U.S. banks, offered a unique window on the financial crisis. Wachovia needed rescuing and BofA’s deal to buy Merrill Lynch nearly collapsed. Lacker reflects on what went down and where finance is headed.
First published Oct. 9, 2018
(Image: REUTERS/Kevin Lamarque)
BY ROB COX
Even before Lehman Brothers went belly-up, the U.S. Treasury was hatching a contingency plan. Kashkari was one of the architects of the Troubled Asset Relief Program, which plugged some $250 bln into banks. He joins Rob Cox from his current perch running the Minneapolis Fed.
First published Oct. 4, 2018
(Image: REUTERS/Chip East)
BY ANTONY CURRIE
The chair of U.S. bank regulator FDIC in 2008 recalls how competition and disagreements between watchdogs contributed to the crash. A decade later, despite leaving the industry, she still feels an obligation to warn of the dangers of rolling back some post-crisis reforms.
Sheila Bair is a director of Thomson Reuters, the parent company of Breakingviews.
First published Sept. 28, 2018
(Image: REUTERS/Yuri Gripas)
BY ROB COX
As the chief executive of Citigroup, Pandit engineered the bank’s rescue and recovery from the crisis ten years ago. He swung by Times Square to discuss lessons learned, the things that still worry him and where he’s placing his bets on the future of the financial industry.
First published Sept. 26, 2018
(Image: REUTERS/Brendan McDermid)
BY ANTONY CURRIE
Buying Merrill Lynch has been a qualified success for Bank of America. The $310 billion mega-lender bought the Thundering Herd essentially over a weekend in the depths of the 2008 crisis for $50 billion. Merrill’s retail brokerage has worked out well. But the M&A and equity franchises, which are about to get a new boss, have faded under the BofA brand.
BofA’s 17,000 or so financial advisers – most a legacy of the Merrill deal – have become a jewel in the crown for the bank run by Brian Moynihan. The pre-tax margin on the brokerage unit in the first half of this year, for example, was a whopping 28 percent.
How the investment bank has performed is less clear cut. BofA ranks fifth so far this year in each of the league tables for selling new shares and advising companies on dealmaking, according to Thomson Reuters data. But combine the bank and the then independent Merrill back in 2007, and they would together have reached the top of the equity capital markets ranking and the fourth spot in M&A.
In today’s context, BofA’s ECM bankers brought in about $600 million in revenue in the first half of this year, three-fifths of what top dog Morgan Stanley managed. Its M&A advisory top line was similar, coming in at less than half what Goldman Sachs raked in.
That doesn’t make BofA’s former Merrill businesses a flop – they’re in the same ballpark as Citigroup’s. Both banks have taken a realistic approach since the crisis. Christian Meissner, the BofA investment-banking chief who is stepping down after eight years, got his firm to focus on profitability over size, slashing the division’s client list to 5,000 from 12,000.
Moynihan’s shop is routinely a top-three player in debt underwriting and lending, often putting it among the industry’s best fee-earners. The overall division, which includes transaction services, earned an enviable 20 percent annualized return on allocated capital in the six months to June.
The fairly modest revenue figures for equity sales and M&A in recent years, though, help to discredit the pre-crisis theory that commercial banks with huge balance sheets could dominate Wall Street. Matthew Koder, who is set to replace Meissner, would need to come up with something special to change that.
First published Sept. 20, 2018
(Image: REUTERS/Lucas Jackson)
Ten years on, Rob Cox and Richard Beales discuss whether a banker like JPMorgan’s Jamie Dimon could run successfully for president and how well the likes of AIG and Citigroup have put their bailouts behind them.
First published Sept 14, 2018
JPMorgan CEO Jamie Dimon would make a “phenomenal” president, Donald Trump’s ex-aide and former Goldman No. 2 Gary Cohn told Reuters Breakingviews. But Antony Currie and Gina Chon explain the similarities between leading a big firm and the free world are only skin deep.
First published Sept 18, 2018