FEEDBACK FROM RBS.

FEEDBACK FROM RBS.
Definition of feedback:
1. [noun] the process in which part of the output of a system is returned to its input in order to regulate its further output
2. [noun] response to an inquiry or experiment

Is Basel III already prompting bank sales? JUN 10, 2010 09:29 EDT. The WSJ cites an interesting reason why BofA sold its stake in Santander Mexico: People close to the bank say the decision to sell its stake in the business was driven in part by concerns over a proposed rule under the so-called Basel regulatory accord, which would increase the capital requirements associated with holding minority stakes in other institutions. The banking industry is fighting against the proposal, arguing it would make such arrangements prohibitively expensive… The Santander deal is “a cleanup of minority exposures ahead of the Basel III implementation,” said Joseph Dickerson, an analyst at London brokerage firm Execution Noble Ltd… The regulatory concerns also played a role in Bank of America’s recent decision to unload its holdings in Brazil’s largest private bank, Itau Unibanco Holding SA, for about $4 billion.
The proposed Basel rule could affect the holdings of many other banks, such as London-based Barclays PLC, whose stakes include 20% in BlackRock Global Investors. I thought briefly about this possibility yesterday, when I wrote about the deal, but dismissed it. This particular provision of Basel III is still being opposed by a wide group of industry players, and might never make it in to the final rule. And even if it does, it’s going to be telegraphed long in advance: Basel III will be phased in slowly, over many years, giving BofA a lot of time to sell off minority stakes before it’s ever enforced. So the timing seems weird: why sell $6.5 billion of strategic Latin American banking assets just on the off-chance that they might, in future, be treated harshly by the new international capital-adequacy regime? What’s more, the stated reason for the sale of the Brazil stake made perfect sense on its own: Bank of America spokesman Jerry Dubrowski said in an email, “In December 2009, in connection with repayment of TARP [the Treasury's Troubled Asset Relief Program], Bank of America committed to increase its Tier 1 common equity by $3 billion through the sale of assets or raising additional common equity.” BofA’s stake in Itaú Unibanco is a legacy of its expansion-via acquisition strategy: it bought FleetBoston, which in turn was a merger of Fleet with Bank Boston, and Bank Boston was historically an important player in Latin American banking. But at the BofA level, BankBoston’s Latin expertise was never particularly valued, especially after the Argentine crisis essentially destroyed the Argentina subsidiary, which was always BankBoston’s crown jewel. So I don’t buy the story that the Brazil deal came out of Basel III concerns. Also, why would Basel III rules be problematic with respect to Barclays’ stake in BlackRock? As I understand it, the reasoning behind the new regulations is that if the partially-owned bank gets into trouble, then there’s a good chance that the bank with the minority stake will be pressured to help make up the losses. But that’s not really a problem with BlackRock, which operates with essentially zero leverage. Owning banks is dangerous, because they can lose much more than their entire equity. That’s much less of a problem with owning an institutional investor like BlackRock. So I wouldn’t read too much into the WSJ story today. Yes, Basel III might have an effect on minority bank stakes in the future. But I don’t think it’s driving large strategic decisions right now.

If Basel II was the complete failure I understand it was, and Basel III (as seems likely) is too lenient, too late, going through the motions in other words, then it would behoove governments to enforce stress-testing of “assets” as they’re being sold off by institutions such as BofA rather than surmise seller motives. Because later, when it’s too late, we’re likely to be told that “all that could be done” was being done, and the next murky layer of duplicity by the same old offenders who brought us the last crisis “wasn’t illegal at the time”. And that’s the loophole every TBTF banker is most likely to be looking for in an industry as utterly unproductive as today’s investment banking, really, isn’t it?

Banking (continuation): BCP signs cooperation agreement with the largest Chinese bank. 13/06/10 00:05. After being granted a license to BCP 'full branch' in Macau, the bank signs agreement with ICBC.Portuguese banks have been positioning themselves in strategic markets in the Portuguese-speaking Africa and Brazil. But the BCP seems to prefer the third vertex of the triangle: China. Moreover, the largest Portuguese private bank benefits from its strong links to Macau president. Carlos Ferreira Santos is close to Stanley Ho, has been administrator of the Seng Heng Bank and Estoril-Sol. This past Thursday 10th of June, the president of BCP went to Macau to celebrate a cooperation agreement with the Industrial and Commercial Bank of China (ICBC - Macau) in the presence of Zhu Xiaoping, president of ICBC ( Macau). This agreement aims to allow customers of Millennium bcp, Chinese immigrants living in the Lusophone countries where the Bank operates, the sending of remittances to China in more favorable terms. According to a statement released yesterday, the bank "continues as its strategy to boost presence in Asia Pacific, especially China, strengthening its partnership with ICBC, the biggest Chinese bank and major financial institutions in the world . ICBC serves more than 200 million customers, of which 3.6 million are businesses through a network of branches in 22 countries. " Carlos Santos Ferreira took the trip to thank the authorities to permit 'full branch' which was awarded to BCP on 11 May. Millennium BCP is already well authorization of the Government of Macao Special Administrative Region to exercise banking activities in Macao through a Branch with Full License (on-shore).

Explosion on chemical tanker, two crew critical, one dead, Spain. Thursday, June 10, 2010. Chemical tanker Kemal Ka suffered explosion on board on June 10, 13 nm off Almedina, near Chipiona. Three crew needed immediate evacuation, MRCC Cadiz sent helicopter, which took from vessel bosun, chief mate and seaman, bosun died on the way to hospital, other two are in critical condition. No fire after explosion, vessel actually was waiting for order from owner after loading cargo in Huelva, after explosion permitted to berth in Cadiz. Judging from injured crew, they’ve been working on a cargo deck and presumably, vapours exploded due to some negligence. Kemal KA IMO 9493377 Flag Turkey build 2008 DWT 13581.

‘Suicide by laptop’ riddle of two brilliant students found dead in hotel room. Last updated at 10:42 PM on 12th June 2010. Two brilliant university students were found dead together in a hotel room after apparently rigging up a laptop to deliver lethal injections in what is thought to have been a suicide pact. Friends Robert Miller, 20, and 19-year-old James Robertson – both described as highly intelligent – were found slumped in chairs. Their bodies were discovered facing each other at the £65-a-night Ramada Jarvis Hotel in Ayr – 80 miles from where they were both studying for joint maths and physics degrees at Edinburgh University. Staff entered the room after becoming concerned that the young men hadn’t checked out. The tragedy has raised fears the pair were influenced by Australian doctor Philip Nitschke, dubbed Dr Death, inventor of the so-called ‘Deliverance Machine’. Pro-euthanasia campaigner Dr Nitschke’s device involved a computer connected to a syringe driver which could deliver a lethal dose of medication at the touch of a button. It killed four terminally ill Australians before being outlawed in 1997.
The students’ deaths have sent shockwaves through the remote Orkney communities where they were raised. A friend, who asked not to be named, said: ‘No one can understand why this has happened. They were just boys next door – good fun and good friends to have.’ Mr Robertson had attended Stromness Academy, while Mr Miller, who was just days away from his 21st birthday, went to Kirkwall Grammar on the other side of the Orkney mainland. However, Mr Miller’s page on social networking site Facebook shows that they shared mutual friends. They had arrived at the seafront hotel on Tuesday and were said to have been ‘happy and chatty’ when they spoke to staff. When they did not appear back at reception the next day, staff made the grim discovery. Strathclyde Police examined the laptop and said they are not treating the deaths as suspicious. Mr Robertson was a gifted musician known as Jim. Last night, the mother of one of his friends said no one had any idea what had caused the pair to take their lives.
She said: ‘Jim was just the nicest, sweetest boy and everyone is in total shock. He played in a band and was a very good guitarist. He was a gentle soul and always looked out for his friends. But he had a dry sense of humour too and liked a joke. ‘He decided to go off to study in Edinburgh as many of the young folk here do. He was highly intelligent, with an exceptional grasp of numbers, so it seemed the right step. This has just come like a bolt out of the blue.’ Mr Robertson used to be in an indie-rock band in Orkney called Feedback. He played a number of instruments but specialised in the guitar. His devastated parents Barbara and William, of Stromness, travelled to the mainland after their son’s body was discovered. Mr Miller’s parents, James, and Christine, from Finstown, also made the journey to Ayrshire. Both families are well known in the community. Mrs Robertson works with charities and voluntary groups. Mr and Mrs Miller are directors of the Orkney Media Group, which owns the newspapers The Orcadian and Orkney Today. They had the heart-breaking task of identifying the two men’s bodies and it is understood they are now making arrangements to have their sons’ remains transported back to Orkney. Last night, Stromness councillor Ian Johnston said: ‘Nobody has any idea what is behind this and we are absolutely shattered. I knew Jim. He was in the same year at school as my own son, so it has hit my family hard as well. ‘They will be very badly missed by the community.’ Edinburgh University has been helping police piece together any motive the pair might have had for taking their own lives. There has been growing concern about the availability of suicide ‘self-help’ guides. Critics have said they are a rich hunting ground for predatory intruders seeking to exploit the vulnerable. Nicola Peckett, of the Samaritans, said: ‘Suicide is a complex issue and is not usually the result of just one factor or event. It is very important not to let your feelings spiral out of control and to seek help when you don’t feel able to cope.’ The Samaritans can be contacted on 08457 90 90 90 or by emailing jo@samaritans.org