BNY Mellon, a custodian bank, was this year the unhappy recipient of a record fine of 126 million pounds ($185 million) by the UK Financial Conduct Authority, FCA. The infraction was failure to keep records and reconcile clients assets and failure to segregate clients accounts. The FCA has fined a… Read more »
Banks are expected to lose up to $11 billion in profits to non-banks according to a March study by Goldman Sachs. The situation may deteriorate further as the pace of bank disintermedation and unbundling of their services continues. This seems to confirm the fear of J.P. Morgan chief, Jamie Dimon,… Read more »
Marginig is typically required for future settled instruments like futures and forwards. TBA trades, a type of agency backed MBS with around $180 billion daily volume, has escaped this requirement. The New York Fed estimates up to 1.5 trillion is uncleared and unmargined. It was not until 2014 that rules… Read more »
Adding a large loan to a balance sheet is not an enticing proposition in terms of risk/rewards for a bank. Syndicated loans makes this decision more palatable as is shared among other lenders and can serve as entry point into more lucrative from the issuer. Given that the loan is… Read more »
Settlement cycles have shortened from the 14 days that it took when horses and ships were part of the process to the current norm for many financial transactions of 3 days abbreviated as T+3. The push continues to drive that further down to T+2 and T+1. Straight-Trough-Processing (STP), aims at… Read more »