Canadian banks have been knighted by many market observers as the “Best Banks in the World!” Over the years, other banks have been similarly lauded such as the Scandinavians, U.S. banks, and some Europeans with cataclysmic ramifications within only a few short years later. Do Canadian banks harbor the seeds of future descent? Read on.
The CCAR qualitative pass rate improved to 100%, but BAC has to do some remedial work and resubmit revised capital plan by September 30, 2015. JPM, GS and MS all had to resubmit their capital plans to pass.
Most observers of CCAR 2015 are applauding the stressed capital results with a white-flag pass. We think the results show that the Fed’s test is too academic and not very meaningful in light of what banks really need to do, which is generate solid core operating profits. On many fronts the banks are weak, and the Fed’s CCAR methodologies simply fail to make a difference.
A tough quarter for most of the big trading & lending GSIBs with lower net income reported by four of the six. Morgan Stanley reported positive net income only because of a tax benefit offsetting operating losses. Three of the six GSIBs reviewed missed consensus estimates even after adjustments.
Banks are never fully out-of-the-woods, or the Bayou swamps of Louisiana for that matter, when it comes to various types of risk including credit, interest rates, markets, capital, liquidity and operational. It seems that they skip from risk-sitch to risk-sitch every 18 – 24 months without fail, where yesterday’s great lending or trading opportunity sours and becomes tomorrow’s great investor and risk manager’s nightmare. And the U.S. banks are familiar with the &l
Bank executives challenged by complexity and unintended consequences related to the Dodd Frank Act and Basel III implementation (Legal, Organizational, Valuation, Infrastructure)