Tag Financial Services

Financial regulation and the loss of sovereignty

A global phenomenon, nothing to do with Brexit

Right now in South Africa, President Zuma is being urged to refuse to sign the new Financial Intelligence Centre Amendment Act.

This act is part of ongoing global tightening of controls to reduce/eliminate money laundering and combat the financing of terrorism. There is plenty of freely available documentation to describe the aims – for example from the IMF and from the World Bank.

So these regulations are centrally imposed by global non-government organizations. Just like the Kyoto Protocol and the United Nations Declaration of the Rights of the Child, right?

Err ….. no. These regulations are different because Read more

onlycoin – only ten years too late

PINning your hopes on an unCHIPped picture of the future

A new startup, onlycoin.com, is attempting crowdfunding for a new credit card wallet. This product, called coin, is the same size as a credit card and stores the details of up to eight other credit cards (or debit cards, or any similar card with a magnetic strip). The onlycoin.com card runs an application that allows you to select which of these eight cards the onlycoin.com card should emulate. This allows you to leave your other cards at home and carry just the onlycoin.com card.

Many people’s physical wallets are bursting with multiple cards, and the onlycoin.com card helps address this problem. But it has a major drawback. The onlycoin.com card does not Read more

Edictum De Pretiis Rerum Venalium

The rise and fall of the Roman Empire European Parliament

Diocletian, or Gaius Aurelius Valerius Diocletianus Augustus, a Roman emperor who ruled from 284 to 305, issued the edict on maximum prices (in Latin, Edictum De Pretiis Rerum Venalium) in 301.

In an outburst against a European Union cap on bankers’ bonuses, Boris Johnson, the mayor of London, said “the most this measure can hope to achieve is a boost for Zurich and Singapore and New York at the expense of a struggling EU. This is possibly the most deluded measure to come from Europe since Diocletian tried to fix the price of groceries across the Roman empire.”

Read more

Bubble 2.0

Wait for the pop!

Yes it’s happened again. Our memories must last about ten years. We have a new bubble in Internet stocks.

Read more

Back to the Future

Swapping credit

Title VII of the Dodd-Frank Act, or “the Wall Street Transparency and Accountability Act of 2010,” threatens major capital reserve burdens on OTC derivatives traders by requiring that OTC swaps are cleared through clearinghouses that will demand a margin in addition to the capital reserve required by the Regulations.

The Act also determines that Federal support will not be provided to businesses involved in swaps (there are exceptions).

This will have major implications for the financial markets.

Read more

Paybox.me is not a competitor for Paypal

Beware this one.

This blog is not usually concerned with warning people about websites that show similarities with scams. But this post breaks with tradition because the website in question has been mentioned in the comments to a previous post: Google breakup? Wrong target again.

In that post I discussed why Paypal was far more dangerous than Google, with respect to consumer choice and other monopolistic matters.

Earlier today “Al” commented that Paybox (http://www.paybox.me/r/signuppage) was emerging as a potential competitor to Paypal.

I don’t think this is the case. For several reasons I think that the business is a l-o-n-g way from competing with Paypal. Read more

What price a banking license?

Around 50 million pounds

JC Flowers, the Private Equity house based in New York, has agreed to pay GBP50m for a 49% stake in a Joint Venture with Kent Reliance Building Society (KRBS).

Does JC Flowers see KRBS as a major business opportunity? Hardly, because Read more

Still wrong on bankers’ bonuses

What is wrong with a bonus culture in banking?

The European Union parliament will vote next week on new legislation to curb bankers’ bonuses. The rules on bonuses are included within a larger proposal on capital requirements. According to the Financial Times, ‘lawmakers and EU officials welcomed the agreement and said it should help to reduce the “bonus culture” in the banking sector.’

Well here at Vox Sapiens, at risk of repeating ourselves (see Bankers’ bonuses – wrong target) we think the bonus culture should be increased, not reduced. This is because Read more

Snore and fleece

The US Financial Reform Bill is too long

The US Senate has started to debate the Financial Reform bill. This bill proposes the most sweeping changes to US (and, therefore, global) financial markets regulatory practices since the Great Depression of the 1930s.

So one might think this an extremely important bill, right? So all the Senators have Read more

Escher’s Bank

The incredible story of the Icelandic banking crisis

The Icelandic Special Investigation Committee (SIC) yesterday (April 12th, 2010) delivered its report on the collapse of the three main banks in Iceland. It makes shocking reading.

It can be downloaded here.

At Vox Sapiens, our initial vision was of a couple Escher’s masterpieces. Read more

Better risk management for banks

A new approach to punishing offenders and rewarding the best

The recent financial crisis was exacerbated by several failures, one of which was poor risk management by banks. Previous attempts to coerce management into being more responsible have failed. How about this approach? Read more

Bankers’ bonuses – wrong target

Unless you’re a shareholder, point your gun elsewhere

During the last few days many of the large Investment Banks have announced staff bonuses. And in many cases these have been at, or near, record levels. This has led to public outcrys.

As a response, some governments have announced special taxes on these bonuses. And the triumverate of governments, central banks, and financial services industry regulators have all railed against the bonuses.

But why are the bonuses so high? Who should be the real target of the outrage? Read more

Financial Services – next recruitmentfest?

What value will be added by the next round of recruitment?

Every economic downturn the financial services industry sheds a large tranche of employees, pointing to the high proportion of total costs represented by personnel, and the need to reduce cost:income ratios.

Then the upturn comes, accompanied by a frenzy. But what value do these new recruits deliver? Read more

An Overview of Annuities

“A brief introduction as background for other posts about annuities”

An annuity is a contract between you and an insurance company whereby the insurance company will pay you a certain amount of money, on a periodic basis, for a specified period. For example, you might pay an insurance company ten thousand dollars and in return you will receive 100 dollars a month for 10 years.
Read more

The case for Rotating Annuities

“Providing flexibility around retirement”

Annuities have received a bad press recently. But from the perspective of the recipient (or investor) they are a perfect way of matching assets and liabilities – pick the right type of annuity and you receive a predictable┬ástream of income until you die, regardless of when this occurs.

Furthermore, for people who are tempted to dip into and spend their savings, rotating annuities (one might compare them to a dividend reinvestment plan) can be a technique to control this habit and preserve wealth.

To my knowledge, no company actually offers a rotating annuity as a product. But is is possible to create one synthetically. Here’s how: Read more

We should expect some mergers to fail

Why should mergers or carve-outs differ from other change programs?

Every report on the state of mergers and acquisitions points out that a proportion of mergers fail to deliver the intended benefits. Similarly, reports on the success of projects convey a similar message – some projects fail. Mergers are amongst the largest and most complex projects that companies must implement, and are not ‘run of the mill’ for most companies, so shouldn’t we expect mergers to fail – at least until we can implement projects successfully? Read more

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