Capital Markets, Financial

BGC Partners eyes new platform to trade US Treasuries

BGC Partners plans to launch a new platform to trade US Treasuries early next year, in a bid to return to a market in the middle of evolution, according to people familiar with the plans.  The company, spun out of Howard Lutnick’s Cantor Fitzgerald in 2004, sold eSpeed, the second-largest interdealer platform for trading Treasuries, […]

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Sales in Rocket Internet’s portfolio companies rise 30%

Revenues at Rocket Internet rose strongly at its portfolio companies in the first nine months of the year as the German tech group said it was making strides on the “path towards profitability”. Sales at its main companies increased 30.6 per cent to €1.58bn while losses narrowed. Rocket said the adjusted margin for earnings before […]

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Renminbi strengthens further despite gains by dollar

The renminbi on track for a fourth day of firming against the dollar on Wednesday after China’s central bank once again pushed the currency’s trading band (marginally) stronger. The onshore exchange rate (CNY) for the reniminbi was 0.28 per cent stronger at Rmb6.8855 in afternoon trade, bringing it 0.53 per cent firmer since it last […]

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Nomura rounds up markets’ biggest misses in 2016

Forecasting markets a year in advance is never easy, but with “year-ahead investment themes” season well underway, Nomura has provided a handy reminder of quite how difficult it is, with an overview of markets’ biggest hits and misses (OK, mostly misses) from the start of 2016. The biggest miss among analysts, according to Nomura’s Sam […]

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Spanish construction rebuilds after market collapse

Property developer Olivier Crambade founded Therus Invest in Madrid in 2004 to build offices and retail space. For five years business went quite well, and Therus developed and sold more than €300m of properties. Then Spain’s economy imploded, taking property with it, and Mr Crambade spent six years tending to Dhamma Energy, a solar energy […]

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Categorized | Banks, Insurance

Australia toughens up on errant bankers

Posted on October 4, 2016

(GERMANY OUT) Commonwealth Bank of Australia sign (Photo by Mayall/ullstein bild via Getty Images)

Australia is toughening rules and introducing new criminal penalties for bankers who manipulate the country’s benchmark interbank borrowing rate, amid public anger over an alleged culture of rule-breaking at its top lenders. 

The government announced the regulatory shake-up on Tuesday at the start of three days of hearings, at which the chief executives of the four biggest banks will be grilled by members of parliament.

    It follows a series of scandals that include banks providing poor financial advice, failing to pay out on life insurance policies, and allegedly rigging Australia’s bank bill swap rate — a key benchmark used to price billions of dollars in commercial loans and financial instruments, similar to the London interbank offered rate (Libor). 

    The new regulations “will see people mucking around with the Bank Bill Swap Rate potentially facing criminal penalties”, said Scott Morrison, Australia’s treasurer.

    The development is the latest in a series of regulatory probes around the globe into alleged interest-rate manipulation.

    In July, four former Barclays bankers in the UK were jailed for conspiring to rig US-dollar Libor, the key benchmark interbank borrowing rate.

    Australia’s Securities and Investments Commission is suing ANZ Banking Group, Westpac Bank and National Australia Bank for alleged manipulation of the benchmark interbank borrowing rate. 

    Mr Morrison said the special session of parliamentary hearings — designed to appease calls by the opposition Labor party for a full public inquiry — would allow banks to explain themselves to the Australian public.

    Ian Narev, head of Commonwealth Bank of Australia, the first chief executive to go before the committee, said CBA had not acted with enough speed to address certain customer-related issues and apologised to those the bank had let down.

    Australia bank regulator sharpens focus on rule-breaking culture

    Heightened scrutiny creates headwinds as banks defend their reputations

    Mr Narev faced questions about poor financial advice provided to the banks’ customers and allegations that CBA’s life insurance arm delayed making payouts to terminally ill patients. He said problems had been identified in about 10 per cent of financial advice cases where customers had requested reviews, but that CBA’s overall corporate culture was good.

    Shares in CBA were off 0.5 per cent on Tuesday afternoon in Sydney with Westpac and NAB each down by less than that and ANZ up 0.3 per cent.

    CBA — Australia’s largest lender, with a market capitalisation of A$126bn — has so far paid A$62m compensation to customers. Some 8,600 customers have requested the bank review the financial advice it provided them between 2003 and 2012.

    Australia’s banks are among the most profitable in the world and allegations by whistleblowers of systematic rule-breaking across the industry have prompted the Labor party to call for a full Royal Commission public inquiry into the banking sector.

    In depth

    Libor scandal

    The FCA formerly the FSA prepare for their first day of operations as the Financial Conduct Authority at their head office in Canary Wharf. Credit: David Parry/ FT

    Regulators across the globe probe alleged manipulation by US and European banks of the London interbank offered rate and other key benchmark lending rates

    The latest opinion poll by the Australian Institute shows the public supports a full inquiry into the banks, with 68 per cent for and 16 per cent against.

    Of the respondents, 59 per cent disagreed with the statement that banks have been truthful about what they knew about scandals revealed by whistleblowers. 

    Bill Shorten, Labor leader, said his party remained committed to holding a public inquiry. “No soft touch, soft ball, white wash in a parliamentary committee is going to stop a royal commission,” he said.

    The governing Liberal-National coalition said the new rules, expected to be passed into law by January 2018, would ensure Australia’s regulatory regime is as “modern and secure” as other comparable regimes including the UK and the EU.