Chillin' out till it needs to be funded
Ofcourse I am not a female employee if this is another emancipation theorem and as I am not part of any institutional subscrription for a long gap, I have not really read Abigail’s workpiece in this issue of Euromoney (euromoney.com) but yes indeed Denial is not just a river in Egypt and UBS is indeed changing fundamentally, among other things in recognising a perspicacious structure that is tenable for the future and not being tempted by third secondary tranches (or as the other zerohedge would say secondary-secondary-secondary) of US mortgages and marking them to market to gain US business share ( though that was an idea admittedly i propagated in my tight circle, evolve is a powerful strategy)
UBS will be one of the first few banks to admit to regulators that $200 mln in settlement is indeed like getting away scotfree and pay $1.5 B for their role in LIBORGate despite being the whistleblower even as HSBC walked away with the first such brownie point ingot last week when they settled for $1.9 B in the Wealth Bank not the Investment Bank. The $300 mln settlement by Goldman Sachs in the Fabrice Tourres episode or the lack of any other settlements on their count after being painted as everyone’s favorite Marvel Villain, and the many other settlements signed by JP Morgan had almost deflated onlookers who had no inkling of the insignificance of the issues involved in each such and SEC would have probably ended this crisis with very few other settlements if the journals’ flow of these regulatory settlements and indeed actions is reviewed and again thankfully ( though Diamond, Bob and King might indeed disagree) some action reviewing the speed of these actions is now in motion.
One of course wonders if bankers standing outside are also still in denial if there weight on issues of the day in the sector is reviewed regularly and that might indeed lend credence to “Denial is not just a river in Egypt” for other such analysts too. I would not award the Cleopatra though right now as Basel 3 and many other rollbacks are first required to see the big picture for the sector again where one sees UBS and Credit Suisse as just looking good for a reinvented double dose of Bank 1.0 and those that retreat to the shell of tradition 100 year ago banking may indeed not represent the mainstream of the future as banks continue as Engines of Economic Activity and indeed Universal Banks come back while manageable size is worked out in structure and an Economic forethought available to the population at large through the nineties and most of the years of the oughts except the months immediately preceding the crisis are sloughed off.
More importantly, the need for regulators to be more transparent this time means that many more pieces of fundamental regulation are indeed yet off the table bu twill come back in the coming years in both retail and institutional banking with both US and UK playing key roles. And no, I do not mean reverting to lawlessness or to swathes of Short Term wholesale funding without due cause as the ramp up point. Semper Fi!