George Osborne’s £100bn ‘funding for lending scheme’ has come in the nick of time for bankers at RBS. Many have been complaining about the declining value of their deferred bonuses from 2010, say headhunters, which have diminished in value by around 50% since they were awarded in 2011.
Today, however, RBS’s share price rose nearly 8% on Osborne’s Mansion House plan. Barclays’ shares rose 4.5% and Lloyds’ rose 4.4%. RBS bankers whose bonuses typically vest around this time of year have reason to feel especially pleased.
Leverage ratios for big UK banks will be lower than Vickers advised – instead of a 4% ratio of pure equity to gross assets, 3% will be allowed. (Guardian)
Philippe Hoube, a former broker at Newedge, Société Générale’s brokerage unit, said that the bank filled Kerviel’s account with losing operations before unwinding them to increase the loss it could attribute to him, rather than disclose it as its own. (The Times)
Dutch high frequency trading firm Flow Traders has increased revenues by 97%, increased pay by 88% and increased headcount from 88 to 96. (Financial News)
“The risk of a major bank failure remains substantial,” the Swiss National Bank warned, looking at Credit Suisse. (Business Week)
Under Basel 2.5, “what JPMorgan needed was a trade that didn’t have much accounting volatility, looked comparatively low risk in a CRM model, didn’t cost too much, and yet provided crash protection on its bond portfolio.” (Alphaville)
Harvard MBAs make $3,639,643 over the course of their careers. (Poets and quants)