Banking

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  • Investors and taxpayers really both lose in a bank bail-in/bail-out.

    In a Bank Bail-In/Bail-Out, Who Loses First?

    After the 2007-2008 bank recapitalization by governments, which means taxpayers' money, Europe changed the rules.  The new rules require that private investors be "bailed in" before the bank is "bailed out." 

    Europe's fastidious with rules allows for exceptions and flexibility.  Italy is pushing for this flexibility now, and Portugal is watching closely because its largest bank also may require recapitalization. 

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  • Dealing with the Italian Bank mess could cost Renzi his job.

    Dealing with Italian Banks' 'Pre-existing Conditions'

    How exceptional are market developments?  Much rests on the answer.  If these are extraordinary circumstances, then Japanese intervention becomes more likely.  Of course, Japanese policymakers have been inclined to intervene before the UK referendum but were seemingly rebuffed by its G7 partners.

    In Europe, the designation of "exceptional circumstances" is critical. Such a designation could soften the EU strictures.  Italy is on the leading the push in this direction.

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  • India's public sector banks are consolidating.

    Are Fewer Indian Public Sector Banks Better?

    In India’s most recent budget, Finance Minister Arun Jaitley formally announced that it would slash the number of Indian public sector banks from the current 27 to just 10. Consolidating India’s public sector banks will result in improved efficiency, greater economies of scale and large-scale financial institutions that can cater to the needs of a growing economy.

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  • Corporate venture capital works with the right structure.

    Corporate Venture Capital Programs are on the Rise

    Large established firms increasingly rely on external sources for innovation. One way these firms are seeking to foster innovative activity is via corporate venture capital programs.

    According to the National Venture Capital Association (NVCA), established firms invested more than US$4 billion in venture businesses in 2014, representing more than 10% of all venture capital investments in the US during the year.

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