How Much Did Barclays Make From Manipulating Libor?

No doubt at some point a full calculation will be forthcoming. It is important to remember that many banks are involved in the scandal, and that for every long derivative there’s a short, so there were winners and losers and the sums are all mixed up. It may well be that just as Bank X’s […]

EU Summit: Some Good Progress, But Any Game Changers?

This EU summit marked many firsts for eurozone crisis era EU summits: it was the first time Greece hasn’t been discussed in years, it was the first time Italy and Spain bonded together and it was the first time President Hollande attended an EU summit. By dinner time on Thursday, the EU summit seemed a […]

RGE’s Arnab Das Bloomberg Video on ECB Policy, Spain Outlook

Bloomberg: Arnab Das, managing director of market research and strategy at Roubini Global Economics, talks about fiscal and political integration in Europe, Italy’s public debt levels and European Central Bank monetary policy. He speaks with Maryam Nemazee on Bloomberg Television’s “The Pulse.”  

Spanish Bank Bailout Unlikely to Succeed

It has been abundantly clear that Spain would need a bailout for its sick banking system, and rumours have emerged that this could happen as early as this weekend. I doubt that the details of a plan will be agreed so soon as an independent stress test of the Spanish banking system is still being […]

The Chinese State Takes, But Never Gives

China’s banks pay out massive dividends relative to their internal capital generation capacity. This is a recipe for capital destruction. The heads of China’s largest state-owned enterprises (SOEs) tend to have a ministerial ranking, equal to a State Council member or provincial governor, but the heads of China’s largest banks are ranked a notch lower. Central Huijin, a division of China’s sovereign wealth fund, has a majority ownership stake in China’s largest banks and can control them directly through the board room, whereas the other SOEs report to an organization that is technically not even part of the government. It is hardly surprising therefore that while most SOEs pay miniscule dividends, state-owned banks routinely pay out 50% of profits in dividends. Resource companies, the SOE sector with the next highest required payout ratio, only pay 10% and many SOEs do not pay any dividends; meanwhile, they receive subsidized capital from the banks.

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