Who needs science fiction when the real thing is much more amazing? In this month’s cover story “Quantum Leap, Trading Faster Than the Speed of Light”, technology editor Dan Barnes explores how the demands of the trading desk for capacity and speed are bumping up against the laws of physics.
All signals point to the Latin American economic recovery being sustainable, as governments have increasingly demonstrated fiscal responsibility, argues Luis A Moreno.
The $10.7bn bid by France’s BNP Paribas to acquire Italy’s sixth largest bank, Banco Nazionale del Lavoro (BNL), last month, marks not only the long-awaited resurgence of cross-border bank consolidation in Europe but also the importance of retail growth to BNP and the strategic integration impact of the euro.
The Banker celebrated its 80th anniversary (1926-2006) at the Drapers Hall in London with a cake-cutting ceremony attended by (from left) Brian Caplen, editor; Stephen Timewell, editor-in-chief; and Michael Kirkwood, master of the Guild of International Bankers and managing director UK, Citigroup. The 80th anniversary celebrations included a keynote speech by Sir Peter Middleton, president of the British Bankers Association and senior warden of the Guild of International Bankers, which examined key events in UK financial history, and a seminar that included both an economics panel and a banking panel.
On the surface, the latest annual results for the top five banks in the US seem to continue the trend established in previous years: strong pre-tax profit growth on the back of strong growth in consumer and commercial loans and good deposit growth.
The global financial services industry will triple in value within the decade, according to Mercer Oliver Wyman, and an IFS customer survey finds that there is an information deficit.
Bank trading desks are continually seeking faster data processing to speed up deals and this is pitting technology developers against the laws of physics. Dan Barnes reports.
In the big money world of trading, patience is definitely not a virtue. Traders who miss deals by milliseconds, or are outwitted by a competitor’s superior data, quickly become history. That is why they demand the best from their IT departments and do not take ‘no’ for an answer.
Professor Ray Chen: Tackling issues of chip size, speed and heat
A chip’s ability to process information is not purely a hardware issue. The task is also dependent on the software application that is giving instructions on how this is to be done.
Daniel Bouton, chairman of the IIF steering committee
Preparations for the new capital accord trundle on but there are growing fears among bankers and their supervisors that its inconsistent implementation around the world will cause problems. Michael Imeson reports.
Under Basel II, banks operating in a foreign (“host”) country will be supervised for capital adequacy purposes by both the host regulator and the regulator in their home country.
Public perceptions of JPMorgan belie the fact that its investment banking business has crept up stealthily on its competitors and can now boast stellar growth and healthy revenues. Geraldine Lambe talks to JPMorgan’s head of investment banking for Europe, Klaus Diederichs.
Sophie Roell discovers how the heads of global equities at four investment banks are adjusting to a world of falling commissions, the pressure for greater risk taking and mushrooming technology costs.
From left to right, Francois-Xavier Reignier, Xavier Venereau, Yann Lagalaye, Olivier Warnan, Vincent Veron
When BNP Paribas agreed to underwrite a $750m pre-export facility for the State Oil Company of Azerbaijan, it was seen as a brave move by other banks. Interest in the Caspian region will surely make the deal worthwhile. Edward Russell-Walling talks to the team.
One of the great debates of economics is whether China or India will be the leading emerging market powerhouse of the next decade. China has first-mover advantage but is its model running into problems?
Emerging markets are well known for their protracted dealings with the IMF and the grief that these encounters involve. But developed countries can also gain the fund’s unwelcome attentions – as Britain discovered back in 1976.
Emerging markets are not out of the IMF’s clutches yet but both they and their currencies have become much more stable. Citigroup analysts note in a new paper on Hot Corporate Finance Topics in 2006 that “surprisingly, the average emerging market currency volatility against the dollar is now below the volatility of both dollar-euro and dollar-yen”.
BNP Paribas’ bid for Italy’s Banca Nazionale del Lavoro must have come as a shock to one banking analyst. Financial institutions specialist Fox-Pitt, Kelton wrote in January: “France. Even correcting for underprovisioning, French banks still look cheap, due principally to an overestimation of acquisition risk by the market. We expect only small bolt-on deals with potential for a dividend/buy-back surprise at BNP.”
Holger Härter: Porsche adopts conservative methods to achieve liquidity on the balance sheet
The lack of a rating failed to prevent massive retail interest in the auto maker’s assortment of bonds, writes Edward Russell-Walling.
Drivers love the cars – and investors positively adore the stock. For Porsche, which recently came to market with three large bond issues, these two facts are not unconnected.
FX banks are confronted by a series of issues regarding delivery channels, namely which platforms to support, whether they should support all clients equally on all platforms, and how to identify which clients on which platforms are disruptive and/or unprofitable. Mark Pelham explains.
A recent roundtable organised by The Banker looked at the New Legal Framework (NLF) for Payments Directive, issued by the European Commission in December 2005, and the implications for the banking industry. A group of payments professionals from leading banks took part in the discussion, chaired by The Banker’s technology columnist Chris Skinner.
Investors cannot wait for the expected wave of IPOs among Russia’s top-end banks in 2007. Ben Aris profiles four dynamic players flirting with flotation.
Pridiyathorn Devakula, right, receiving his award from The Banker’s editor Brian Caplen
Thailand’s central bank governor Pridiyathorn Devakula is The Banker’s central bank governor of the year in Asia for 2006. Here he talks to Brian Caplen about the challenges facing his country.
Chile’s banks are scrambling for market share in the retail sector, where rich profits lie. Ian Gill reports on the courting of clients at the market’s lower end.
Diego Pulido: ‘We are perfectly suited to compete at the international level’
Guatemala’s growing banking sector needs to consolidate to remain competitive, especially as foreign banks are eyeing up the country. Monica Campbell reports from Guatemala City.
Banco Agromercantil may not be Guatemala’s biggest bank and claims less than 10% market share, but it is one of the healthiest and most profitable institutions in the country.
The International Finance Corporation’s tougher ethical guidelines for project finance are likely to result in an update of the Equator Principles. Oliver Balch reports on what this will mean for banks.
Competition to draw international banks into the Gulf region is stronger than ever but Bahrain is confident that it can retain its leading edge, write Jon Marks and Ian Lewis.
With the introduction of project finance instruments to complement more familiar short-term trade finance and consumer lending, Islamic banking has found a sound but innovative home in Bahrain. Jon Marks and Ian Lewis report.
Saad Azhari: expanding Blom Bank into Egypt and elsewhere in the region
Lebanon’s top two banks have boosted profits and set their sights on regional and global expansion, despite political turmoil at home. Stephen Timewell reports.
David Roberts: Economies outside the UK have better prospects for growth
After a decade of contraction, Barclays is once again expanding its presence in overseas retail markets. David Roberts, chief executive of International Retail and Commercial Banking at Barclays, tells Michael Imeson about its latest moves.
Estimates put funds lying dormant in accounts at £1bn-£5bn for the UK alone. But the issue of how to identify this cash and what to do with it is far from straightforward, as Stephen Timewell explains.
The microfinance sector has been looking for ways to bypass the ‘branch infrastructure problem’ and mobile phones may be the answer to reaching rural clients, says Gautam Ivatury.
JPMorgan Chase’s global chief information officer tells Dan Barnes of the importance of being crisp, timely and final when it comes to technological decision making.
The rise of China and India in economic terms has been meteoric but, while their global banking presence remains relatively minor today, global dominance in this sector, too, is inevitable.By Chris Skinner.
Basel II encompasses provisions for supervisory oversight and market discipline that will make banks’ risk management performance transparent to rating agencies, regulators and other stakeholders.
Foreign correspondent banks will be major losers as a result of further anti-money laundering regulation in the form of Section 312 of the USA Patriot Act, writes Michael Imeson.
Investment services firms have barely 18 months to prepare for MiFID so it is imperative they understand the impact it is likely to have on their business and react accordingly. By Alan Jenkins.
The European Commission has ended the debate about how MiFID should be implemented by opting for a mixture of regulation and directive – but confusion remains. By Michael Imeson.
The IT implications are mind-boggling but already the likes of MiFID Connect and the MiFID Joint Working Group are busy advising on what should be done. By Michael Imeson.
The sooner firms take action, the better positioned they will be to take advantage of the opportunities of MiFID, and to avoid an expensive panic in 2007. By Alan Jenkins.
