The Digest
There are two major themes in today’s links, so it made sense to group them accordingly.
First off, the ride isn’t getting any easier for banks. They are having to scramble to raise capital and are reluctantly coming to terms that there are many more lean years ahead.
“If the book value of a bank is higher than the share price, […] the book value is going to be diluted.” Banks’ share prices all factor in future capital raising — FT
In Spain, Santander and BBVA are using all possibilities, including asset disposals and innovative securities, to increase their core Tier 1 ratio. — FT
Meanwhile, in Japan Nomura is also looking at selling assets not directly related to its core business. — Reuters
And lastly, Deutsche Bank is looking at options for its global asset managment division. — Bloomberg
On top of all that, EU commissioner for the internal market Michel Barnier is to set up a group to study banking reform that could include far-reaching restructuring or ringfencing similar to what the UK’s Independent Commission on Banking recommended. — Reuters
Faced with this combined regulatory, market-driven and political (Occupy Wall Street?) onslaught, banks are slowly coming to terms with the new reality of changing business models and decreasing profitability. — Reuters
Secondly, market infrastructure providers everywhere have decided that the only salvation lies in size:
The Tokyo and Osaka Stock Exchanges have agreed to merge in 2013, creating the world’s third largest exchange. Reuters
And Turkey’s government plans to merge the Istanbul Stock Exchange (cash equities) and TurkDex (derivatives). — FT
The Digest is a daily(-ish) overview of interesting stories in financial services technology and management.
