Treasury, Fed call for new powers The Obama administration joined forces with Fed chairman Ben Bernanke on Tuesday to press Congress for powers that would enable regulators to seize control of troubled financial groups including "non-banks" such as insurer AIG. In a rare joint appearance before a House committee, Bernanke and Tim Geithner, Treasury secretary, also called for an oversight body to monitor risky financial institutions. Geithner is to announce more details of regulatory plans at another hearing on Thursday. Read the testimonies here and here. See this article online.
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| US banks face big writedowns The US government's toxic assets plan will force banks such as Citigroup, Bank of America and Wells Fargo to take further large writedowns on their loans, requiring them to raise more capital from taxpayers or investors, analysts have warned. The new plan, unveiled Monday, to encourage investors to buy troubled residential and commercial mortgages will prompt banks to record losses on those portfolios, while new "stress tests" will force them to take more aggressive provisions on these loans. See this article online.
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| Bridgewater mulls toxic asset plan Bridgewater Associates, one of the world's biggest hedge-fund managers, said on Tuesday it might participate in the US Treasury's public-private investment programme, calling it a "big transfer of money from the government to the banks and to the buyers", reports Reuters. In a letter to clients, Bridgewater said its interest in buying the distressed assets would depend on the pricing and on "whether we can get over our fears of partnering with the government." See this article online.
http://ftalphaville.ft.com/blog/2009/03/25/53977/bridgewater-mulls-to
| Goldman eyes $10bn Tarp exit Goldman Sachs said it plans to repay $10bn of funds received from the US government's TARP bank recapitalisation scheme possibly by late April, after the US Treasury completes the first round of its new "stress tests" for banks. Some smaller banks have already signalled plans to repay TARP money, citing concern over changes in terms of the scheme and compensation restrictions. Marin Bancorp, IberiaBank, Signature Bank, Sun Bancorp and TCF Financial have all applied to repay a combined $689m of TARP funds. See this article online.
http://ftalphaville.ft.com/blog/2009/03/25/53976/goldman-eyes-10bn-ta
| UK's King warns on fiscal expansion Mervyn King on Tuesday said the UK could not afford a second fiscal stimulus in next month's Budget, in a rare public warning by the central bank governor. In comments that will weigh on Gordon Brown ahead of next week's G20 summit in London, King said Britain faced "very large fiscal deficits over the next two to three years". His concerns were echoed by the European Commission which on Tuesday gave Britain until 2013-14 to bring the budget deficit back below 3% of national income. See this article online.
http://ftalphaville.ft.com/blog/2009/03/25/53975/uks-king-warns-on-fi
| Japan's exports plunge 49% Japan's exports plunged a record 49.4% in February from a year earlier, amid waning global demand for the country's cars and electronics, reports Bloomberg. Shipments to the US, Japan's biggest market, slid a record annual 58%. The collapse signals GDP may shrink this quarter at a similar pace to the annualised 12.1% contraction posted the previous quarter, the sharpest since 1974. See this article online.
http://ftalphaville.ft.com/blog/2009/03/25/53974/japans-exports-plung
| Diamond set for iShares windfall Bob Diamond, the high-profile president of Barclays, is among key executives who stand to make millions of pounds if the bank sells iShares, its asset management business which is part of Barclays Global Investors, for as much as $6.5bn. Diamond and more than 200 other executives own 4.5% of BGI Holdings through a share-incentive scheme. Barclays is talking to Goldman Sachs and at least three other parties about bids for iShares, due Friday. See this article online.
http://ftalphaville.ft.com/blog/2009/03/25/53973/diamond-set-for-isha
| Deutsche Bank regains local majority German investors bought shares in Deutsche Bank in unprecedented numbers last year, returning the country's flagship bank to majority domestic ownership in an unintended consequence of the financial crisis. More than 220,000 shareholders joined the bank's share register last year, most in the final quarter when bank valuations plunged after Lehman Brothers' bankruptcy. The proportion of shares held by retail investors had doubled to 29%, the bank said. See this article online.
http://ftalphaville.ft.com/blog/2009/03/25/53972/deutsche-bank-regain
| MUFG eyes Morgan Stanley JV: report Mitsubishi UFJ Financial Group, Japan's biggest bank, may take a 60% stake in a planned brokerage venture with Morgan Stanley, according to Nikkei English News, reports Bloomberg. Morgan Stanley may take the remaining 40% stake when MUFJ Securities and Morgan Stanley Japan Securities combine their operations next spring, Nikkei said. Separately, the Mainichi newspaper reports that MUFG will delay its planned acquisition of Citigroup's Japanese trust bank as it takes a closer look at the trust bank's exposure to a failed lender. See this article online.
http://ftalphaville.ft.com/blog/2009/03/25/53971/mufg-eyes-morgan-sta
| Man Group fees hit heights Wealthy investors in Man Group's main guaranteed hedge funds pay fees of 8.5% a year, with performance fees on top, according to UBS research. The level of base returns required before clients break even is far higher than Man's disclosed 4.36% gross margin from private investors, which it called "robust" in September. The calculations come as hedge fund fees – typically 2% a year and 20% of profits – are under pressure from investors following the industry's worst year on record. See this article online.
http://ftalphaville.ft.com/blog/2009/03/25/53970/man-group-fees-hit-h
| Barclays to escape curb on tax shelters Barclays will escape curbs against its use of offshore tax shelters under any deal to allow the bank access to the UK government's toxic asset insurance scheme. Alistair Darling, chancellor, has concluded it would be counter-productive to enforce tougher tax avoidance conditions on banks using the scheme than for those banks seeking no taxpayer support. Instead the chancellor will, about the time of April's Budget, publish a voluntary "code of practice" on tax avoidance aimed at banks. See this article online.
http://ftalphaville.ft.com/blog/2009/03/25/53969/barclays-to-escape-c
| Lloyd's sanguine on financial claims Lloyd's of London played down its exposure to claims arising from the financial crisis as hurricane losses and lower investment income halved profits at the world's oldest insurance market. Lloyd's reported a fall in pre-tax profit from £3.85bn to £1.9bn in 2008 after what it said was the third worst year of claims in the past 15 years. Investment income also fell from £2bn to £957m. See this article online.
http://ftalphaville.ft.com/blog/2009/03/25/53968/lloyds-sanguine-on-f
| EU to regulate credit ratings Credit rating agencies face regulation in Europe by a single body after a key parliamentary committee in Strasbourg endorsed proposed legislation. The legislation, which will give new powers to the Paris-based Committee of European Securities Regulators, will be put to European lawmakers next month, ensuring a vote is completed ahead of elections in the summer. The legislation would also need backing from member states, which may still raise objections. See this article online.
http://ftalphaville.ft.com/blog/2009/03/25/53967/eu-to-regulate-credi
| HSBC to cut more UK jobs In Categories: People Posted at 04:10 by Gwen Robinson HSBC, Europe's biggest bank by market value, may cut about 1,000 jobs in the UK, reports Bloomberg. The jobs will be eliminated in processing and operations, and some administration sites may be closed. HSBC employs about 58,000 people in the UK and 330,000 worldwide, and is currently raising £12.5bn in the UK's biggest rights offering. See this article online.
http://ftalphaville.ft.com/blog/2009/03/25/53966/hsbc-to-cut-more-uk-
| Two more top names leave Merrill In Categories: People Posted at 04:09 by Gwen Robinson Two of the biggest names in Wall Street research are leaving Merrill Lynch in another sign that Bank of America's acquisition of the bank has spurred many long-time employees to rethink their commitment. David Rosenberg, Merrill's chief North American economist, will leave in May and join a buy-side firm, Gluskin Sheff, in his native Toronto. Richard Bernstein, chief investment strategist and head of Merrill's private client research investment committee, will leave next month to 'explore other opportunities'. See this article online.
http://ftalphaville.ft.com/blog/2009/03/25/53965/two-more-top-names-l
| Overnight markets: Mixed Asian stocks were mixed on Wednesday after US stocks fell overnight; Asian technology and mining stocks fell as Japan's exports slumped by a record annual 49% and metal prices dropped. Banks advanced. Futures on the S&P 500 Index added 0.4% after the gauge fell 2% Tuesday as Fed chairman Ben Bernanke and Treasury secretary Tim Geithner called for new powers to seize failing financial firms.
Asian markets (Wed)
05:35am GMT
Nikkei down 54.68 (-0.64%) at 8,433.62
Topix down 2.26 (-0.28%) at 810.42
Hang Seng down 73.25 (-0.53%) at 13,837.09 US markets (Tues)
DJIA down 115.89 (-1.49%) at 7,659.57
Nasdaq down 39.25 (-2.52%) at 1,516.52
S&P500 down 16.80 (-2.04%) at 806.12 European markets (Tues)
FTSE100 down 41.35 (-1.05%) at 3,911.46
Eurofirst 300 up 1.31 (0.18%) at 740.83 Currencies
03:52 GMT
€/$ 1.3479 (1.3661)
$/¥ 97.77 (97.68)
£/$ 1.4681 (1.4685) Commodities (updated)
03:50 GMT
Brent Crude (May09) down $0.82 at $52.68
Light Crude (May09) down $0.65 at $53.33
100 Oz Gold (Apr09) $5.70 at $929.50
Copper (3M 24hr) up $25.00 at $3,995.00 10-year government bond yields (%)
US 2.69 (2.66)
UK 3.32 (3.14)
Germany 3.15 (3.03)
Japan 1.26 (1.26) Sources: FT, Reuters See this article online.
http://ftalphaville.ft.com/blog/2009/03/25/53961/overnight-markets-mi
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