Breaking News

CME Considers Bidding for Michael Spencer’s NEX Group

NEX

First Read

Hits & Takes
JLN Staff

Wednesday night I was about to head home when I ran into a friend outside the Bar Luna at the Boca Raton Resort and Club. He told me about a rumor the CME was going to buy NEX and some other details about potential counter-bids or the sale of parts of NEX that CME may not want. That news caused me to stay at the bar until 1 PM in search of other sources, but I found none.

I did find sources yesterday who confirmed the CME was having an emergency board meeting, but there was also news that a decision in the lawsuit against the CME Group by some of their members over market access was going to be published by the end of the week.

The first published report of the potential deal was in Patrick Young’s ego-filled Exchange Invest newsletter. Bloomberg was the first mainstream media to report the story. I will have more to say in an analysis piece published later.~JJL

Sign up for the CME Foundation’s new newsletter and keep up to date with everything that is happening at CME Group Foundation.~JJL

Wednesday at FIA Boca, CFTC Commissioner Brian Quintenz shook up the audience and the panel immediately following him by lambasting the European Commission for breaching the 2016 agreement between EU authorities and the CFTC with a new proposal that would extend European regulators’ (including ESMA’s) oversight of U.S. CCPs. Quintenz said it was common knowledge the proposal was a response to Brexit, but that while Brexit presents challenges, it is “irrelevant to the U.S. and no justification to renege” on the 2016 agreement. On the panel, Patrick Pearson of the EC played defense (“I am the enemy, apparently,” he said), remarking that the EC started reviewing the regulations three years before Brexit and felt there were a lot of unintended consequences in swaps regulation. He also said the EC receives only six pages of information on the biggest US clearing facility, while the smallest European facility provides 600 pages. “We need more information” about those large clearinghouses that are systemically important, he said.

Patrice Aguesse of Autorite des Marches Financiers said they welcomed the proposal and think ESMA should be the supervisor for CCPs, but the CFTC’s Eric Pan said Europe’s “buyer’s remorse” over the agreement was disturbing and that when you say you will do something, you should stick with it. Pan also argued with Pearson, who said the EC had copied Dodd Frank in their own rules, responding that Europe’s rule was not a copy, but “If they want to mimic us, we would welcome that.”~SR

The FT’s Joe Rennison, @JARennison tweeted that at the FIA Boca conference panel on bitcoin, CME Group’s Tim McCourt, in charge of Bitcoin futures, was the only panellist not to personally own bitcoin.~JJL

FIA CEO Walt Lukken was certainly one of the hardest working people at the FIA Boca conference, moderating what seemed like more than half of the panels. He did a terrific job as moderator, asking great questions and providing a sense of humor. ~SR

Thank you to Bo Collins and his firm Renovatio Puerto Rico for sponsoring the closing cocktail party at the FIA’s International Conference in Boca Raton that was also a fundraiser for Futures For Kids.~JJL

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Sponsored Content

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Do You Own Bitcoin? The IRS Is Coming for You; Agency collects data on Coinbase account holders who bought, sold, sent or received digital currency
By Laura Saunders – WSJ
Pay your taxes on bitcoin…or else. Late last year, the Internal Revenue Service persuaded a federal judge to require Coinbase, a San Francisco-based digital-currency wallet and platform with about 20 million customers, to turn over customer information. Driving the IRS’s decision was its belief that few bitcoin investors appear to be paying taxes due on sales. The court order is one of the agency’s first moves as it clamps down on cryptocurrency scofflaws.
/goo.gl/jBEfm2

******Knock-knock. Who’s there? Bad News.~JJL

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White House Aide Tells Wall Street to ‘Relax’ Over Trade Worries
By Katia Dmitrieva – Bloomberg
Navarro says president to be firm, flexible on steel tariffs; U.S. trade office to deliver China IP report in coming weeks
White House trade adviser Peter Navarro said U.S. investors should “relax” over fears that new trade penalties will spark a skirmish that could hurt the world economy.
/goo.gl/sHWbPY

***** Rule number one: Never tell Wall Street what to think. Rule number two: See rule number one.~JJL

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Thursday’s Top Three
Our most read story yesterday is the WSJ’s What’s the Biggest Trade on the New York Stock Exchange? The Last One. Coming in second is a collection of short video interviews from Nasdaq, Jill Malandrino FIA interviews. In third is the The Washington Post’s Kudlow to be top White House economic adviser as Trump adds longtime loyalist

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MarketsWiki Stats
122,190,253 pages viewed; 23,042 pages; 212,071 edits
MarketsWiki Statistics

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Lead Stories

CME Considers Bidding for Michael Spencer’s NEX Group
Matthew Leising, Dinesh Nair, Manuel Baigorri, Viren Vaghela – Bloomberg
London-based markets firm could also attract other suitors; NEX market value surges to $4.8 billion after confirming talks
Michael Spencer’s NEX Group Plc rose the most in almost two decades after CME Group Inc., a $56 billion giant of futures trading, approached the company on a potential takeover.
/goo.gl/z5g8kj

Michael Spencer’s Nex Group receives CME preliminary bid approach; UK financial technology company in early-stage talks
Philip Stafford in London – FT
Nex Group, the UK financial technology company headed by Michael Spencer, had confirmed it has received a preliminary approach about being taken over by CME Group, the world’s largest futures exchange.
/goo.gl/SxkZDu

Nasdaq CEO says era of exchange consolidation is over
Joe Rennison in Boca Raton – FT
Nasdaq’s chief executive thinks the era of exchange consolidation is over, given the regulatory hurdles, and instead predicts more partnerships will emerge in an industry that has historically been characterised by cutthroat competition.
/goo.gl/4XjEge

Nex shares rocket 36% on CME takeover talks; Sale negotiations spark speculation of auction for UK financial technology business
Philip Stafford – FT
Shares in Nex Group, the UK financial technology business headed by Michael Spencer, soared more than 30 per cent to a record high on Friday after it confirmed it had held preliminary talks about being purchased by CME Group, the US derivatives exchange.
/goo.gl/8Zuo7L

How Jamie Dimon came to rue his Bear Stearns deal; It looked like a steal 10 years ago, but JPMorgan’s $2-a-share takeover quickly soured
Ben McLannahan in New York – FT
The takeover of Bear Stearns by JPMorgan Chase, sealed exactly a decade ago in the crucible of the 2008 financial crisis, was one of the signature deals of a turbulent year, and the knockdown price of $2 a share was a shock to Wall Street.
/goo.gl/oH7dwP

Call for US Treasury to fill cryptocurrency ‘regulatory vacuum’; CFTC’s Rostin Behnam says focus needed on distributed ledgers and initial coin offerings
Joe Rennison in Boca Raton, Florida – FT
The US Treasury needs to intensify efforts to fill the “regulatory vacuum” for the cryptocurrency industry, according to a top US regulator.
/goo.gl/VknL2K

U.S. judge dismisses currency-rigging claims against big banks
Reuters Staff
A U.S. judge on Thursday dismissed a lawsuit against 16 big banks by retail foreign currency investors who claimed they were indirectly harmed by a conspiracy to rig prices.
/goo.gl/DVzbf4

U.S. appeals court voids Obama-era ‘fiduciary rule’
Jonathan Stempel – Reuters
A federal appeals court on Thursday voided the U.S. Department of Labor’s “fiduciary rule,” an Obama administration measure adopted in 2016 meant to curb conflicts of interest among providers of financial advice to Americans planning for retirement.
/goo.gl/Ef279r

Brokers Will Have to Reveal More to Investors Under Coming SEC Rule; SEC is close to proposing rule requiring new disclosures on financial advice, its own version of Labor Department’s ‘fiduciary rule’
Dave Michaels – WSJ
Investors wary of biased advice from stockbrokers can look forward to new disclosures that shine more light on the terms of their relationship, industry officials and regulators say.
/goo.gl/jS32Dh

Exchanges, OTC and Clearing

CME in approach for Michael Spencer’s £2.6bn Nex Group; Preliminary offer set to spark global exchange race for UK fintech company
Philip Stafford in London and Joe Rennison in Boca Raton, Florida – FT
CME Group, the US futures exchange, has made a preliminary bid for Michael Spencer’s Nex Group, a move likely to spark a race among global exchanges to buy the UK financial technology company.
/goo.gl/kDDgci

Exchange Glitch Delays German Stocks, Futures on Day of Big IPO
Joe Easton, Iain Rogers – Bloomberg
$100-billion-a-day Bund market delayed by more than an hour; Xetra stocks also impacted ahead of Siemens Healthineers debut
Equity and derivatives trading was delayed on the day of a landmark stock debut in Germany due to a technical glitch, Deutsche Boerse AG said.
/goo.gl/PFkz2Y

Deutsche Börse equities, futures trading delayed by system glitch; German stocks and futures fail to open on time
Adam Samson in London – FT
Deutsche Börse, the German exchanges operator, faced “serious issues” on Friday that caused a delay in the opening of equities and futures trading.
/goo.gl/Ft5Vps

The gloves are off in Hong Kong’s fight with mainland exchanges for global fundraising crown
Eric Ng, Daniel Ren – South China Morning Post
The stock exchanges of Shanghai and Shenzhen are pulling out all stops in offering themselves as the preferred destination for new-economy companies to raise capital, upping the ante in their competition with Hong Kong for the global crown in initial public offerings.
/goo.gl/JyPjwv

Deletion of Component Issues for the TSE Mothers Index
JPX
/goo.gl/mfjzx5

EEX Group Took Part In The Consultation “Fitness Check On Supervisory Reporting” Of The European Commission And Is In Favor Of Streamlining The Regulatory Reporting
MondoVisione
EEX Group deeply believes in the simplification and streamlining of regulatory reporting. Electricity and gas derivative contracts are covered by reporting obligations stemming from four pieces of legislation: namely EMIR, MiFID II/MiFIR, REMIT and MAR. This constitutes a heavy reporting burden for energy exchanges and clearing houses as well as for market participants. Consequently, there is a need to streamline the requirements in order to avoid double reporting. For example, trades that have to be reported under REMIT or MiFID II/MiFIR should not need to be reported again, if they have already been reported under EMIR. At the moment, exchanges are delivering partially overlapping data in the context of EMIR, MiFID II/MiFIR, MAR and REMIT reporting.
/goo.gl/hyPQPc

Osaka Exchange: Partial Revisions To Derivatives Trading Rules
MondoVisione
Osaka Exchange, Inc. (OSE) will partially revise the derivatives trading rules, in order to invigorate and enhance the convenience of the derivatives market.
/goo.gl/RuFjxb

Fintech

Valuation for Robinhood, Maker of App That Offers Free Stock Trades, Tops $5 Billion; Russian firm DST Global is leading a $350 million investment
Rolfe Winkler and Douglas MacMillan – WSJ
Robinhood Markets Inc. is set to be valued at about $5.6 billion in a new funding round, according to people familiar with the matter, a fourfold increase in just one year that reflects the stock-trading app’s soaring popularity among millennials.
/goo.gl/wuoMB2

Cryptocurrencies

This City Just Passed the First Bitcoin Mining Ban in the US; Plattsburgh, New York has imposed an 18-month moratorium on Bitcoin mining to prevent miners from using all the city’s cheap electricity.
Daniel Oberhaus – Motherboard
On Thursday evening, the city council in Plattsburgh, New York unanimously voted to impose an 18-month moratorium on Bitcoin mining in the city.
/goo.gl/EJNueD

Blockchain Is A Potential ‘Truth Machine’ For The World’s Transactions
Joe McKendrick – Forbes
There’s so much more to blockchain than cryptocurrency. Blockchain may eventually reach into every corner of the business, providing online, “smart contracts” that bind and assure any type of transaction, from exchange of goods to services rendered to employee records.
/goo.gl/Z6BhsD

Visa’s finance chief attacks bitcoin ‘bubble’; Vasant Prabhu says extent of speculation has been ‘a real shock’
Alistair Gray in New York – FT
A top Visa executive has launched one of the most outspoken attacks yet from the financial establishment on the bitcoin craze, saying cryptocurrency was used by “every crook and dirty politician” and speculators who have “no clue”.
/goo.gl/p4XacK

BitGrail Denies Responsibility for Hack, Will Refund Coins “Voluntarily”; Francesco “The Bomber” Firano’s handling of the hack of his exchange has been…unique.
Simon Golstein – Finance Magnates
A Telegram group for victims of the recent BitGrail hack has revealed that the exchange does not consider itself to be responsible for the theft or obligated to return the stolen money. However it has prepared a plan to reimburse customers “voluntarily”.
/goo.gl/A3uRQE

Technology Meant to Make Bitcoin Money Again Is Now Live
Camila Russo – Bloomberg
Lightning Network software released by developer group; Jack Dorsey, others invest seed money in Lightning Labs
A version of the technology that’s meant to make cryptocurrency payments faster and cheaper went live Thursday.
/goo.gl/cYLSqN

Want to Mine Bitcoin in New York? You’ll Have to Pay a Premium
Mark Chediak – Bloomberg
Bitcoin mining is about to become a costlier proposition in upstate New York. The New York Public Service Commission on Thursday cleared the New York Municipal Power Agency to raise electricity bills for cryptominers seeking to take advantage of the state’s low-cost hydroelectric power. The agency is made up of 36 municipal power authorities in the state. In some cases, the miners — which require huge amounts of electricity for data processing — accounted for a third of a municipal utility’s demand, the commission said.
/goo.gl/TNfeHS

Bad news for bitcoin miners: It’s no longer profitable to create the cryptocurrency, by one estimate
Evelyn Cheng – CNBC
Bitcoin has dropped to a point where it’s not that profitable to produce, according to some estimates.
/goo.gl/GfhVfd

Bitcoin Isn’t an Investment Until Buyers Sweat the Fees; The life cycle of cryptocurrencies in portfolios will come down to cost.
Nir Kaissar – Bloomberg
If you want to know where cryptocurrencies are in their development, keep an eye on fees.
/goo.gl/zL2uNx

CoinfloorEX Eyes April Launch for Bitcoin-settled Futures Contracts
Ogwu Osaemezu Emmanuel – BTC Manager
CoinfloorEX Eyes April Launch for Bitcoin-settled Futures Contracts
Since the CME and Cboe launched their bitcoin futures contracts in December 2017, a whole lot of institutional investors have been scampering to get on the scene. Although the CME and Cboe bitcoin futures contracts are cash settled, a London-based crypto exchange is looking to create its physically settled bitcoin futures contracts.
/goo.gl/oSZvmX

Politics

Kudlow Is a Sign Republicans Are Out of Economic Ideas; Trump’s new top aide shows the GOP has little to offer beyond tax cuts for high earners.
Noah Smith – Bloomberg
A tax cut? Thumbs up. Photographer: CNBC/NBCU Photo Bank via Getty Images
Why did President Donald Trump choose Larry Kudlow, a man who disagrees strongly with the president’s tariff policy, to be the new head of his National Economic Council? Kudlow will replace Gary Cohn, who walked off the job after failing to prevent Trump from embracing protectionism. Why would Trump replace one dissenter with another?
/goo.gl/1VBiVq

6 of Larry Kudlow’s Not-So-on-the-Money Predictions
Deborah B. Solomon and Kitty Bennett – NY Times
President Trump has a new chief economic adviser. Larry Kudlow, the CNBC commentator who served in President Ronald Reagan’s Office of Management and Budget, will become the director of the National Economic Council, a position being vacated by Gary D. Cohn, who said he would resign after losing an internal battle over the president’s plan to impose tariffs on foreign metals.
/goo.gl/M78Gdp

Russian Hackers Attacking U.S. Power Grid and Aviation, FBI Warns
Jennifer A Dlouhy, Michael Riley – Bloomberg
U.S. officials warn of attacks, including on nuclear plants; Cyber-attacks underway since at least March 2016, U.S. says
Russian hackers are conducting a broad assault on the U.S. electric grid, water processing plants, air transportation facilities and other targets in rolling attacks on some of the country’s most sensitive infrastructure, U.S. government officials said Thursday.
/goo.gl/XFgjLY

House Lawmakers Vow Not to ‘Rubber Stamp’ Senate Bank Bill; Move to include input on banking overhaul could slow momentum, alienate centrist Democrats
Andrew Ackerman – WSJ
House Republicans pushed to leave their mark on a bipartisan overhaul of the banking sector approved this week by the Senate, a move that could slow momentum for the legislation in Congress.
/goo.gl/dGPtVG

The EU Digital Tax Is Back and as Wrong as Ever; Why is Brussels seeking a quick-and-dirty solution when Google and others are ready to make a deal?
Leonid Bershidsky – Bloomberg
Who’s ready to settle their tax bill? Photographer: Justin Sullivan/Getty Images
The idea of a European “digital tax” on tech revenues just won’t go away. Next week, the European Commission will formally propose the levy, and though it faces stiff opposition from low-tax countries such as Ireland and Luxembourg, the proposal isn’t necessarily doomed.
/goo.gl/D4Lpxo

Oil and Gas Leaders Warn Trump He Risks Harming Their Industry
Jennifer A Dlouhy – Bloomberg
Trump disagrees with executives on Nafta arbitration language
Industry leaders say it provides an essential safety net
President Donald Trump disagreed with executives of major oil and gas companies Thursday about the importance of keeping binding dispute settlement procedures in a renegotiated North American Free Trade Agreement, according to a person familiar with the discussion.
/goo.gl/eZN22J

Senate’s Rollback of Banking Rules Faces Headwinds in House
Elizabeth Dexheimer – Bloomberg
Not so fast. That was the message from House Republicans a day after the Senate passed sweeping legislation that many bankers consider their best chance in years of easing post-crisis financial rules.
/goo.gl/hah6mR

Regulation

New York Man With Fictitious Fund Admits Ripping Off Friends
Bob Van Voris – Bloomberg
Michael Scronic took in $24.5 million, lost almost all of it; Scronic faces federal prison after pleading guilty to fraud
A Pound Ridge man who claimed to be a hedge fund manager admitted to ripping off friends, family and acquaintances, many of whom live in the area of his wealthy New York suburb, with risky options trades and using their money to cover his expenses.
/goo.gl/4BcGd9

Remarks of Commissioner Rostin Behnam at the FIA Boca 2018 International Futures Industry 43rd Annual Conference, Boca Raton, Florida
CFTC
Good afternoon and thank you for the kind introduction. I’m thrilled to be the crowd warmer for the Washington Outlook panel. Joking aside, the crowd warmer’s job is to get the audience in the mood for the main act — to make you all feel integral to what’s about to occur on stage and to elicit and encourage you to react. Your engagement and reactions are critically important, especially now as we have all been promised deliverables in terms of Project KISS1, Reg. Reform 2.0,2 and CFTC and SEC harmonization,3 and we are increasingly expectant of proposals for resolving outstanding regulatory issues such as the de Minimis exception, position limits, and Regulation Automated Trading (Reg AT).
/goo.gl/d7HNmY

Ex-Deutsche Bank Trader Bittar Pleads Guilty to Rate Rigging
Franz Wild, Suzi Ring – Bloomberg
Christian Bittar was accused of manipulating Euribor; Bittar lost 40 million euros in bonuses after he was fired
Christian Bittar, a former star trader for Deutsche Bank AG, pleaded guilty to conspiring to rig the benchmark rate known as Euribor, a key moment in one of the U.K.’s biggest banking scandals.
/goo.gl/EGtpuy

Tom Hayes Makes Final Bid to Fight Confiscation of Village Home
Franz Wild – Bloomberg
$2.2 million seven-bedroom home sold to pay confiscation order; Hayes is serving an 11-year jail sentence for rigging Libor
Tom Hayes, the former UBS Group AG and Citigroup Inc. trader jailed for 11 years over Libor rigging, made a final attempt to overturn a confiscation order that forced his wife to sell their 1.6 million-pound ($2.2 million) family home.
/goo.gl/BAwo8F

US eyes Fed official Randal Quarles for top global regulatory post; Financial Stability Board would see significant change of gear under Randal Quarles
Sam Fleming in Washington and Caroline Binham in London – FT
Randal Quarles, the Federal Reserve governor who supervises big banks, is being discussed in the Trump administration as a candidate to head the body that oversees international financial regulation, according to people familiar with the deliberations.
/goo.gl/uSRPZX

FCA studies claim bookmakers created ‘false market’ in shares; Campaign says William Hill and Ladbrokes Coral ‘misled’ over curbs to fixed odds terminals
Murad Ahmed and Caroline Binham in London – FT
The UK’s financial watchdog is probing allegations that Ladbrokes Coral and William Hill created a “false market” in their shares by promoting a doomsday scenario for betting shops if the government presses ahead with curbs on machines dubbed the “crack cocaine of gambling”.
/goo.gl/BGjqLa

ESMA registers SPMW Rating Sp. z o.o. as a CRA
ESMA
The European Securities and Markets Authority (ESMA), the EU’s direct supervisor of credit rating agencies (CRAs), has registered SPMW Rating Sp. z o.o. as a CRA under Regulation (EC) No 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies (CRA Regulation), with effect from 15 March 2018. SPMW Rating Sp. z o.o. is based in Poland, issuing sovereign and public finance ratings and corporate ratings.
/goo.gl/1FLTRR

ESAs weigh benefits and risks of Big Data
ESMA
The Joint Committee of the European Supervisory Authorities (ESAs) published today its final report on Big Data analysing its impact on consumers and financial firms. Overall, the ESAs have found that while the development of Big Data poses some potential risks to financial services consumers, the benefits of this innovation currently outweigh these. Many of the risks identified by the ESAs are mitigated by existing legislation.
/goo.gl/X6Edh8

Monthly Disciplinary Actions March 2018
FINRA
/goo.gl/42m4ZP

Investing and Trading

FANG Rally Is Outpacing the Heyday of the Tech Frenzy
Lu Wang – Bloomberg
Pace of gains since 2016 tops what Nasdaq saw in late 1990s; Warnings haven’t stopped investor love in past two years
The rally in the FANG block of tech shares and its megacap brethren just surpassed a dubious milestone.
/goo.gl/BE57UJ

How the DOJ’s Face-Off With AT&T Could Alter American Business; Next week, a federal judge will begin trying an antitrust case that has broad ramifications
Brent Kendall and Drew FitzGerald – WSJ
The government accuses the company’s chief executive of behaving like the disingenuous Captain Renault in the film “Casablanca.” The company likens the government’s case to a shaved Persian cat, “pale and thin.”
/goo.gl/7Z1JGF

Spotify to List Stock April 3, Projecting Path to Profit
Alex Barinka – Bloomberg
Music-streaming service sees 25% to 35% sales growth this year; Company’s valuation has varied widely in private share sales
Spotify Ltd. will begin trading on the New York Stock Exchange on April 3, just a week after the company plans to provide its most recent annual financial guidance.
/goo.gl/rsrt74

King Dollar Is Really Just a Grand Duke; Measured against trading partners and adjusted for inflation, the dollar is in line with its average value since Nixon severed the link between dollar and gold in the early 1970s
James Mackintosh – WSJ
“King Dollar” is official. Larry Kudlow used his first TV appearance since being appointed as President Donald Trump’s chief economic adviser to argue for a strong dollar policy, telling CNBC that “a great country needs a strong currency.”
/goo.gl/puMqhB

Billions of Dollars Pour Into Tech Funds, Powering Stock-Market Gains; Nearly $5 billion was invested in tech-focused stock funds so far this year, the most of any sector, data show
Michael Wursthorn – WSJ
Investors are increasing their bets on shares of technology companies, renewing concerns that the market is becoming too dependent on a few big stocks to power its gains
/goo.gl/Vs7zXm

Investors pump record $43bn into global equities market; US leads with inflows that top record set after Trump election
Adam Samson in London – FT
Global investors ploughed a record $43bn into stock funds and ETFs in the past week, with an inflow that exceeded the previous record set after the 2016 election of Donald Trump.
/goo.gl/GkGMVn

Top Trader Vitol Has New CEO as Taylor Becomes Chairman
Andy Hoffman, Javier Bias – Bloomberg
Ian Taylor led spectacular growth in two decades at the helm; Russell Hardy, originally an engineer by trade, becomes CEO
Vitol Group named Russell Hardy as chief executive officer, replacing Ian Taylor at the helm of the world’s biggest independent oil trader.
/goo.gl/FLqACx

Institutions

Deutsche bonuses quadruple despite third-straight loss
Olaf Storbeck in Frankfurt – FT
Bonuses at Deutsche Bank in 2017 more than quadrupled to EUR2.2bn while Germany’s largest lender reported the third annual post-tax loss in a row.
/goo.gl/Avb1Gq

The Gamble That Put David Solomon on Top at Goldman Sachs; Solomon this week was anointed the heir apparent to Goldman CEO Lloyd Blankfein
Liz Hoffman – WSJ
In the spring of 2014, Las Vegas tycoon Sheldon Adelson floated an offer to David Solomon : come run his casino empire.
/goo.gl/oZB41Q

Goldman steps up hiring of women, minorities worldwide
Catherine Ngai – Reuters
Goldman Sachs Group Inc (GS.N) wants women to make up half of its global workforce, starting with new analysts by 2021, the Wall Street bank said on Thursday, as it stepped up efforts to address gender and racial imbalance across the board.
/goo.gl/4Ya2nu

Bonus Drought Over as Deutsche Bank Tries to Keep Best Talent
Steven Arons, Nicholas Comfort – Bloomberg
Investment bankers set to receive more than 1.4 billion euros; Cryan says management board unanimously chose to waive bonuses
Deutsche Bank AG’s bonus pool is almost back to normal, even if little else is.
/goo.gl/GKppfG

U.K.’s Biggest Banks Face Higher Capital Hurdles in Stress Test
Stephen Morris – Bloomberg
Scenario stays the same as health check from last year; Bank of England publishes statement from FPC’s March meeting
The U.K.’s largest lenders face tougher capital demands in this year’s stress test, as the Bank of England steps up efforts to avert a repeat of the financial crisis.
/goo.gl/1P4C1x

Goldman Sachs’ change of CEO reignites an old Wall Street debate; David Solomon’s expected ascension says much about the future direction of banking
William Cohan – FT
In the years after the 2008 financial crisis, Goldman Sachs became a convenient piñata for those wanting to highlight Wall Street’s role in the worst economic collapse since the Great Depression. In response, some of its former banking partners considered trying to topple Lloyd Blankfein, the former gold and silver trader who had become Goldman’s chief executive in 2006. They believed that Goldman’s traders had led the bank down the wrong path, damaging its hard-won reputation for excellence, and that only an investment banker could get the firm back on the right track.
/goo.gl/khiqCg

Deutsche Bank bullish on research business under MiFID II; Deutsche Bank targets greater market share of research market and predicts competitors to scale back.
Hayley McDowell – The Trade
Deutsche Bank has expressed confidence in its research division under the new MiFID II regime following a pricing war among major banks across Europe.
/goo.gl/nu4Ejm

Goldman Sachs and UBS back women in finance initiative; More than 200 companies have signed up to industry diversity charter launched in 2016
Nicholas Megaw in London – FT
Goldman Sachs and UBS are among the latest companies to back a government initiative to boost the number of senior women in the UK’s financial services sector, but JPMorgan has yet to join them despite being singled out for criticism by MPs.
/goo.gl/7k1RDc

Regions

Nobody’s Trading 10-Year Japanese Government Bonds; There was no exchange trading of the debt on Tuesday
Suryatapa Bhattacharya – WSJ
Trading volume in Japan’s benchmark 10-year government bond has been slowing even as caution has increased in global markets since the start of February, with no exchange trading of the debt on Tuesday.
/goo.gl/TRi17c

Why Foreigners Love Vladimir Putin’s Bond Market; Russian elections highlight the strange economic attraction investors have shown for the country’s financial markets
Richard Barley – WSJ
The political waves being generated by Vladimir Putin’s Russia are hard to ignore, with the U.K. expelling 23 diplomats after the poisoning of former spy Sergei Skripal and the U.S. row over Russian interference in the 2016 election continuing. Except, of course, in Russia, where Mr. Putin is all but certain to win a fourth term as president this weekend.
/goo.gl/o7XuXn

Trade war poses danger to EM via global supply chains; Vulnerable countries include Taiwan, Korea, Malaysia, Poland and Mexico, says BoAML
Michael Mackenzie – FT
The prospect of a global trade war erupting is registering with investors with attention focused on greater protectionist measures being announced by the Trump administration and ensuing retaliation from major US trading partners.
/goo.gl/tXNYRd

Airplane Accidentally Spills Gold All Over the Runway
Melissa Locker – Time
The world has seen beer spills, pizza dough spills, syrup-coated highways, entire sandwiches, ham-related traffic jams, and even a truck full of eels accidentally dumped on to an Oregon highway, but a recent runway accident may have caused the most expensive spill yet. A plane was taking off in the Siberian city of Yakutia, accidentally dropped gold, gems, and other precious metals all over the runway, including at least three tons of gold.
/goo.gl/198Y3i

Brexit

Brexit is feeding UK business inertia, says productivity chief; Sir Charlie Mayfield leading drive to improve corporate efficiency as EU exit nears
Chris Giles – FT
The prospect of Brexit is encouraging “inertia” within companies and undermining efforts to improve British business performance, according to Sir Charlie Mayfield, chair of the industry group set up to nurture UK corporate productivity.
/goo.gl/jkwzoL

For Bankers Transplanted by Brexit, a Guide to Living in Frankfurt; Germany’s financial capital is shaking off its sleepy reputation—just in time to welcome a massive wave of Brexiteers.
Gisela Williams – Bloomberg
Big banks, trade fairs, and sterile skyscrapers: That’s the landscape that comes to mind when most people think of Frankfurt. And while it’s true that Frankfurt is Germany’s suit-filled business capital—nearly one in five residents works in the financial sector—the city has become increasingly cool, with ambitious restaurants in the red-light district and hipster-friendly boutique hotels popping up alongside old-school pubs that pour apple wine.
/goo.gl/b7HZe3

BoE warns of ‘material risks’ from Brexit; Regulators in UK and EU not doing enough to address issues
Caroline Binham in London – FT
The Bank of England warned that regulatory authorities and politicians in both the UK and the European Union are not doing enough to prevent the “material risks” of disruption presented by Brexit that are hanging over vast numbers of financial contracts such as derivatives contracts and insurance policies, even if a transitional arrangement is agreed.
/goo.gl/KgkpA7

Miscellaneous

Coutts, Banker to British Crown, Investigated Treatment of Women; U.K. institution took disciplinary action after female bankers complained about unwanted physical contact and other behavior
Simon Clark and Phillipa Leighton-Jones – WSJ
Coutts & Co. had a problem. Women at the three-century-old private bank, where Queen Elizabeth II keeps money, complained of physical and verbal harassment by male colleagues. Some women refused to work with star banker Harry Keogh, the man at the center of many of the complaints.
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