Financial & Business Services News by GLG Council Members

Task Force must dump a conflict ridden rating agency compensation system

August 28, 2009

Analysis by: GLG Expert Contributor

Analysis of:Bipartisan Policy Center Announces New Credit Rating Agency Task Force | news.corporate.findlaw.com

The task force should elicit not only comments from industry sources -- who after all have deep vested interests -- but independent experts with no axe to grind who argue that the Municipal Securities Rulemaking Board (MSRB) precedent can be adapted to devise a new conflict free system of payment for ratings from a fund fed by a fee from investors and issuers on each new issue and each secondary market trade in the short and long term public (and possibly private) capital markets.

Indian ATM Sharing Reminiscent of Earlier US Pattern

August 27, 2009

Analysis by: GLG Expert Contributor

Analysis of:RBI limits free use of inter-bank ATMs to 5 times a month | economictimes.indiatimes.com

A recent article reports that the Reserve Bank of India will permit Indian banks to charge usage fees when “foreign” bank customers use their ATM’s more than 5  times in a month. Henry Polmer, the author of this analysis and former general counsel to the Cirrus ATM System, compares the development of the ATM industries in India and the US and concludes that India could fairly rapidly expand to half a million or more ATM’s from its current 40,000 if the RBI broadens its current liberalization.

Money Market Mutual Funds Should Continue To Worry Investors

August 26, 2009

Analysis by: GLG Expert Contributor

Analysis of:Volcker Says Money-Market Funds Weaken U.S. Financial System | www.bloomberg.com

Money market mutual funds should continue to worry investors, as they were at the very heart of the sub-prime crisis that caused our financial markets to melt down not once, but three times over the last two years. Paul Volcker, the former Federal Reserve Chairman, was interviewed by Bloomberg News and his comments are very newsworthy, but money-markets are not a "sexy" segment of the financial markets, so the media will likely ignore his warnings. His warnings need to be heeded.

Optimistic Views from Private Capital Sector

August 25, 2009

Analysis by: GLG Expert Contributor

Analysis of:Pepperdine University National Study Shows Private Capital Providers Have Very High Expectation for Return on Investment | www.vcaonline.com

Key beliefs from private capital firms are at odds. While most believe the demand and activity of private equity will increase over the next 12 months, most also believe the restrictions on investments will increase and the economy will not improve. This opens the doors for a confused market that will most likely continue to wait on the sidelines for signs of improvement.

Hard Times for VC Firms

August 21, 2009

Analysis by: GLG Expert Contributor

Analysis of:Venture capital industry sees glimmers of hope but is still in a deep slump | www.mercurynews.com

There's not much in the news about the health of FC firms. They are getting squeezed from low investment activity, reduced valuation on portfolio companies, and very little fund raising activity. Large public companies like IBM, Cisco, and Microsoft are turning a renewed eye towards monitoring private companies' health. The VC firms who are working with the pro-acquisition companies could be at an advantage when the clouds part.

Royal Bank of Scotland To be Spot Checked - Who Cares?

August 21, 2009

Analysis by: GLG Expert Contributor

Analysis of:City regulator 'spot-checking' bankers' pay deals | business.timesonline.co.uk

As and when the FSA is abolished by the next Conservative government, who are likely to win the next election, the only people who will mourn its passing will be those in the financial services industry whose interests it has protected since its creation.

Joseph ChathamPresidentChatham Mortgage Partners Inc.

Deutsche Bank Recognizes the Depth and Width of "A" Paper Crisis to Come

August 21, 2009

Analysis of:Deutsche Bank on those drowning US homeowners | ftalphaville.ft.com

The depth of the "Alt A" mortgage crisis is coming home to roost. We are likely to see the depreciate creep (or flood as the case may be) is going to hit the areas that the subprime loans barely touched.

Credit Card Reward Generosity: Declining and Heading South

August 20, 2009

Analysis by: GLG Expert Contributor

Analysis of:There Goes The Prize: Credit Card Companies Step Up the Swipe Quota For Rewards Programs | www.washingtonpost.com

The generosity of reward programs with many issuers has declined as banks struggle for ways to cut costs. Major banks will trial an assortment of formulas - including a variety of annual fees, reduced flexibility, additional costs to redeem and higher point thresholds. We will also see new and “innovative” use of penalties to deplete rewards balances. Opportunities exist for smaller and non-traditional banks to take share. Expect massive rewards overhaul if interchange legislation passes.

Private market is peaking out from its shell

August 20, 2009

Analysis by: GLG Expert Contributor

Analysis of:Investors eye top startups as IPO market awakens | www.reuters.com

While the public markets have shown signs of life, pressure is being placed on VC firms to invest and private companies in a position to go public. Don't expect too much activity until the economy improves.

Bank M&A and synergies

August 20, 2009

Analysis by: GLG Expert Contributor

Analysis of:Barclays investors seal BGI deal | uk.reuters.com

Financial institution acquisitions are different from strategic purchases. For banks to acquire, they are looking to expand geographically . The synergies are typically overhead and overlap in costs. If the cuts are too deep, in this case pension, tension among the newly acquired personnel can get tight. This could cause a loss of business should employees decide to leave.

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