Credit Suisse says it will pursue all avenues, including legal action, to recover the $5.5 billion of losses it suffered from the collapse of family office Archegos Capital Management. An independent report from law firm Paul Weiss commissioned by the bank said Archegos probably deceived the lender and "obfuscated the true extent of its positions" but that staff also disregarded the risks.
The Alternative Reference Rates Committee has officially recommended a series of forward-looking term benchmarks tied to CME Group's Secured Overnight Financing Rate term rate as a replacement for US dollar Libor, a move that could encourage adoption and assist with the transition away from Libor. "Market participants now have all the tools they need as we enter the transition's homestretch," ARRC Chair Tom Wipf says.
Net investment in US exchange-traded funds has reached $505 billion since the start of January, already exceeding the total for the whole of 2020 by around $1 billion, according to CFRA data. ETFs tracking US-listed and international equities are proving especially popular.
Robinhood Markets took the unusual step of reserving 35% of its initial public offering shares for retail investors, but only around 20% to 25% have reportedly been allocated, while several posts on the Reddit group that triggered the retail investor frenzy earlier this year actively advised against buying. Shares closed their first day of trading down 8.4%.
Modern Money Murmurs: In these democratized markets, the people have spoken.
Goldman Sachs on Thursday adjusted downward its outlook for Chinese offshore equity markets, following a broad sell-off triggered by government regulatory actions. The bank downgraded its view of MSCI China from "overweight" to "market weight."
The US is widely expected to avoid possible defaults by raising the debt ceiling or resuming its suspension, but analysts say this could lead to a shortage of safe short-term securities with consequent pressure on money market rates and funds.
Fintechs are increasingly turning to celebrity investors, online influencers and outside experts with experience in fashion, luxury and lifestyle campaigns to transform them from unknown finance firms to attractive consumer brands. "When Nike drops a new sneaker or when Spotify launches a new product that's interesting, but when we add an alternative payment method that is not interesting to consumers .... If we can partner with strong influencers we can grasp the attention of audiences whose attention is very hard to grasp," says Klarna marketing chief David Sandstrom.
The leveraged loan market could end its reliance on Libor as soon as September now that a term version of the Secured Overnight Financing Rate has been endorsed by the Alternative Rates Reference Committee, says Meredith Coffey, executive vice president of research and public policy at the Loan Syndications and Trading Association. The market has been relatively slow in its move away from Libor, but Coffey notes, "Both the borrowers and lenders are very interested in having a rate that is known in advance of the interest period."
The House Financial Services Committee has advanced a bill sponsored by Rep. Brad Sherman, D-Calif., that would allow the Federal Reserve to ease the adoption of contracts to the Secured Overnight Financing Rate. The proposed Adjustable Interest Rate (LIBOR) Act of 2021 would set a legal process for automatically switching legacy financial contracts from Libor to SOFR.
A number of trade groups and major asset management firms have voiced concerns over the CFA Institute's plan to publish guidelines on how funds should disclose their environmental, social and governmental investing strategies, arguing they would only add to administrative burdens and could cause confusion. Some trade associations contend the task of setting ESG standards should be left to the Securities and Exchange Commission.
A bipartisan Senate proposal to mandate reporting of cryptoasset transactions above $10,000 to the IRS, which would result in taxes on some trades, has caused consternation among cryptocurrency exchanges, their investors and advisers. Critics say the proposal has been drafted too hastily, while advocates say it would simply level the playing field between traditional assets and digital assets.
Cryptoasset exchange Binance will cease offering its futures and derivatives products across Europe amid regulatory pressure, the company said in a statement. Users in Germany, Italy and the Netherlands will be unable to open new accounts to trade such assets with immediate effect, with existing users given 90 days to close out their positions from an unconfirmed date.
A rise of intolerant, illiberal governments and acute political unrest is spreading through countries including India, South Africa, Tunisia and at least four Latin and South American nations. In addition to causing chaos and suffering, the trend is making it increasingly challenging for emerging economies to catch up to wealthier counterparts.
Across Wall Street and beyond, major banks are raising pay for junior bankers, with at least 12 now starting first-year analysts and associates around $100,000 per year. The firms' hiring minds say the higher baseline is needed to compete against Big Tech in the talent market, and to combat burnout among a cohort beginning their careers in an unprecedentedly challenging time for the industry. Meanwhile, senior executives have not held back from calling out what they see as a harmful break from the pay-for-performance precedent.
eFinancialCareers has put together a handy chart estimating salary levels for a dozen Wall Street investment banks following their recent pay-raise announcements.
Initial unemployment claims fell by 24,000 last week to 400,000, according to the Labor Department. While still above pre-pandemic levels, the figure has been generally falling throughout the year, and the downtrend is expected to continue.