US reveals regulatory overhaul The Obama administration plans to introduce more stringent rules on capital and liquidity as part of a sweeping regulatory overhaul outlined by Tim Geithner, US Treasury secretary, on Thursday. Geithner told Congress that the US needed a fresh approach to regulating risk that identified problems across the financial system as a whole. The focus would be on institutions deemed systemically important, but rules would also be tightened for an even broader range of institutions and products, including OTC derivatives. See this article online.
http://ftalphaville.ft.com/blog/2009/03/27/54101/us-reveals-regulator
| AIG subpoenaed on CDS contracts AIG was subpoenaed on Thursday by New York's attorney general Andrew Cuomo for information on its credit default swaps contracts, which Cuomo said were "at the heart of AIG's meltdown", reports Reuters. Details were being sought on the contracts going back seven months, including those that have been wound down by AIG's Financial Products unit and those that have not, involving billions of dollars. See this article online.
http://ftalphaville.ft.com/blog/2009/03/27/54100/aig-subpoenaed-on-cd
| Barclays nears end of stress test Barclays' loan book is in the final stages of an extreme stress test by City regulators as it considers whether to meet the March 31 deadline to apply for the government's insurance scheme, which ringfences toxic assets. The FSA watchdog will shortly conclude its trawl of Barclays' books and has indicated the bank does not require fresh capital. But some analysts say it might need a large capital injection, even though it is close to the sale of iShares, its asset management business that could fetch up to $6.5bn. See this article online.
http://ftalphaville.ft.com/blog/2009/03/27/54099/barclays-nears-end-o
| RBS launches debt swap deal Royal Bank of Scotland offered to buy back or exchange up to £14.8bn worth of junior bonds on Thursday, joining a growing list of banks looking to boost capital and put a floor under the highly discounted market prices of such bonds. The RBS deal came a day after Lloyds Group initiated a near identical exchange offer, prompting some to ask whether the moves had been prompted by either the regulator, or the government, which holds majority stakes in both banks. See this article online.
http://ftalphaville.ft.com/blog/2009/03/27/54098/rbs-launches-debt-sw
| Russian banks 'in crisis' Hundreds of Russian banks are likely to go under by the end of the year amid mounting bad loans, potentially hitting as much as 20% of credit portfolios, a top Russian banker warned Thursday. Pyotr Aven, president of Alfa Bank, one of Russia's largest private banks, urged the government to move swiftly to recapitalise the top 30 banks and name those to receive aid. He spoke just days after Moscow approved an annual budget that includes Rbs555bn (£11.5bn) in subordinated loans to the biggest banks. See this article online.
http://ftalphaville.ft.com/blog/2009/03/27/54097/russian-banks-in-cri
| US economy falls 6.3% in Q4 The US economy shrank in the fourth quarter at its fastest rate since 1982, revised official figures showed on Thursday, as corporate profits fell at the sharpest pace in 55 years and jobless claims continued to climb. Updated data showed US GDP contracted at an annualised 6.3% in the 2008 fourth quarter, compared with last month's estimate of 6.2%, which came after an overly optimistic January projection of a 3.8% contraction, despite evidence of a more severe downturn. See this article online.
http://ftalphaville.ft.com/blog/2009/03/27/54096/us-economy-falls-63-
| WestLB owners plan sell-off WestLB's owners plan to put the bank up for sale through an auction that could herald a wider shake-up of Germany's state-owned Landesbank sector. The bank expects the offer to satisfy a promise to the European Commission to seek a change in its ownership, a condition of state aid given last year. A competitive auction would bring the prospect of wider private sector involvement in Landesbanken. See this article online.
http://ftalphaville.ft.com/blog/2009/03/27/54095/westlb-owners-plan-s
| Rio shares rise on 'Plan B' talk Rio Tinto shares jumped in Sydney trading on Friday after the miner said it had an alternative plan should its $19.5bn investment deal with Chinese aluminium group Chinalco fail, reports Bloomberg. Rio added 6% to A$58.21 after jumping 7.4% in London on Thursday after its CFO Guy Elliott said it may sell shares or bonds, or more assets, reschedule debt or combine the four options under a "Plan B" should the Australian government or shareholders block the Chinalco deal. See this article online.
http://ftalphaville.ft.com/blog/2009/03/27/54094/rio-shares-rise-on-p
| Canary Wharf owner risks debt breach Songbird Estates, the controlling shareholder in Canary Wharf, the property development that came to symbolise London's revival as a global financial centre, warned on Thursday it was in danger of breaching a key debt agreement on a $1.27bn loan with Citigroup in the next 12 months. See this article online.
http://ftalphaville.ft.com/blog/2009/03/27/54093/canary-wharf-owner-r
| Mizuho to off-load equity holdings Mizuho Financial Group, Japan's second-largest bank, plans to sell as much as Y900bn ($9.2bn) of equity holdings, as the sinking value of its investments threatens to cause the bank's first annual loss in six years, reports Bloomberg. Takashi Tsukamoto, who becomes Mizuho's chief executive on April 1, said the bank still holds Y2.9 trillion in stocks and wants to quickly reduce it to under Y2.5 trillion and then to Y2 trillion. See this article online.
http://ftalphaville.ft.com/blog/2009/03/27/54092/mizuho-to-off-load-e
| Man Group chief warns regulators Increased regulation of hedge funds will drive some out of business and lead to a shrinkage of the industry, Peter Clarke, chief executive of Man Group, the UK's biggest listed hedge fund manager, warned Thursday. Clarke said smaller managers who lacked resources to cope with additional demands from regulators would be hit hardest. See this article online.
http://ftalphaville.ft.com/blog/2009/03/27/54091/man-group-chief-warn
| UN panel urges currency reform World leaders should urgently reach consensus on creating a global reserve system to replace the US dollar as the main international currency, the UN General Assembly was told on Thursday. The recommendation, by an advisory committee set up by the 192-member world body, followed China's proposal for an extension of the use of special drawing rights (SDRs) created by the IMF and the eventual replacement of the dollar as the world's reserve currency. See FT Alphaville on the US dollar and the currency 'ugly contest'. See this article online.
http://ftalphaville.ft.com/blog/2009/03/27/54090/un-panel-urges-curre
| GLG owners agree to $1 salaries The three founding partners of GLG Partners have agreed to have their salaries cut to $1 and waived their bonuses for the year as the embattled New York-listed hedge fund manager fights to retain assets, reports the Times. Noam Gottesman, chairman and co-chief executive, Emmanual Roman, co-chief executive, and Pierre Lagrange, a senior executive, have all agreed to the cut, according to an SEC filing. Last year, Gottesman and Roman took home pay and bonuses totalling $4.4m. See this article online.
http://ftalphaville.ft.com/blog/2009/03/27/54089/glg-owners-agree-to-
| Swiss banks ban executive travel In Categories: People Posted at 04:41 by Gwen Robinson Some of Switzerland's private banks have started to ban top executives from travelling abroad, even to neighbouring France and Germany, amid fears they will be detained as part of a global crackdown on bank secrecy. The travel bans have focused on those visiting the US, following the detention there last year of a UBS private banker as part of a federal tax investigation. See this article online.
http://ftalphaville.ft.com/blog/2009/03/27/54088/swiss-banks-ban-exec
| Overnight markets:Up Asian stocks climbed on Friday in the regional benchmark index's biggest weekly rally since 2002, as higher commodity prices and better-than-expected earnings at US companies boosted investor optimism. Futures on the S&P 500 Index lost 0.4% after the gauge climbed 2.3% on Thursday.
Asian markets (Fri)
04:24am GMT
Nikkei up 83.96 (0.97%) at 8,720.29
Topix up 8.56 (1.06%) at 835.54
Hang Seng down 7.66 (-0.05%) at 14,101.32 US markets (Thurs)
DJIA up 174.75 (2.25%) at 7,924.56
Nasdaq up 58.05 (3.8%) at 1,587.00
S&P500 up 18.98 (2.33%) at 832.86 European markets (Thurs)
FTSE100 up 24.95 (0.64%) at 3,925.20
Eurofirst 300 up 1.39 (0.19%) at 745.33 Currencies
04:24 GMT
€/$ 1.3560 (1.3573)
$/¥ 98.41 (97.72)
£/$ 1.4469 (1.4600) Commodities (updated)
04:21 GMT
Brent Crude (May09) down $0.46 at $53.00
Light Crude (May09) down $0.44 at $53.90
100 Oz Gold (Apr09) down $6.70 at $933.30
Copper (3M 24hr) up $30.00 at $4,140.00 10-year government bond yields (%)
US 2.75 (2.78)
UK 3.30 (3.26)
Germany 3.12 (3.17)
Japan 1.31 (1.31) Sources: FT, Reuters See this article online.
http://ftalphaville.ft.com/blog/2009/03/27/54080/overnight-marketsup
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