Yearly Archives: 2014

14 DecAccount ownership. A hiding place for unexploded bombs

This week’s post is inspired by a comment on inter-company trades; last week’s topics. Inside banks, in all the automated processing, it is the humble “account” that owns the transactions that are booked. The history of banks is filled with sudden discoveries of accounts that were not reconciled and had loss making positions or were […]

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10 Dec3 Cardinal Sins in Processing Inter-Company Trades

There are three great career wreckers in the Financial Services industry: interest claims, inter-company trades and FX hedging. Inter-company trades, trades between two different legal entities within a group, are the topic for this week’s thoughts. I picked the term “career wreckers” with good reason. There are no happy endings in inter-company trade stories. Well […]

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01 DecUber versus Financial Services. New economy vs. old

What the banks need to learn from Uber. Irony, frustration and a suggestion are the ingredients for this week’s post. Uber, the upstart disrupter of taxi and limousine services, is the inspiration. Irony, because I recently read how a Goldman Sachs executive had moved over to Uber and worked out a whole new way to […]

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17 NovLiquidity costs come home to roost. Near 100% increases in transaction costs

Banks do not always get it right, in fact “hardly ever” may seem more apt. This week’s post tells the story of how the cost of liquidity when properly allocated and charged can dwarf the existing ticket charges we are all familiar with in transaction banking. Banks have to keep liquidity buffers. They are always […]

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03 NovBanks and Chaos. It’s life Andy, but not as you’d like it. How regulators need to help create an orderly infrastructure to enable cooperation.

Left to their own devices, banks will not create an orderly world. There is plenty of evidence of cutting corners, misleading and even criminal behaviour in recent times. In the past couple of posts, we have focussed on the Catch-22 of having to cooperate and how the banks need to do this with the right […]

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25 OctInfrastructure: a $100B plus per year expense

Inspiration for this week’s post comes from a couple of articles in the press this week. One highlights just how expensive it is to organise what happens after one person says buy and the other says sell. The other highlights a great initiative to encourage the use of standards. The TabbFORUM published a very thought […]

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21 OctHow competing banks need to cooperate properly

How to behave in the club? Last week’s post was about the unique requirement that the banks have to cooperate in order to effectively settle transactions. A Catch-22, because they need to cooperate and ideally not to have a “Heinz 57 varieties” situation with multiple solutions for the same problem, but as the regulators expect […]

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12 OctCatch-22 for the banks. Cursed to cooperate.  

Banking is not special, it is an industry like any other. Whilst I would stand by the first statement, there is something unique about banking. The need to cooperate. Today, in southern Germany, the senior execs of Porsche, Mercedes and BMW might be interested in what their rivals are up to, but they do not […]

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06 OctAnglos vs. Swiss, a perennial culture clash?

In any competition between an Anglo and a Swiss, the Anglo will win more often than not. Ok, this is a generalisation. But it holds true often enough in banking, though not at football, as the team there just followed on from earlier defeats of Man Utd. and Chelsea by beating Liverpool. Inspiration for this […]

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29 Sep3 Lessons Banks might learn from Swatch

Inspiration for this week’s post comes from a recent presentation for the Swiss Finance Institute. I have always maintained that there is nothing special about banking, so included in that presentation were thoughts on what might be learned from the great watch company. Success with production in one of the world’s most expensive locations In […]

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