11 US, European banks downgraded
Sunday, 21 December 2008
From Fazle Rashid
NEW YORK, Dec 20: Standard and Poor, the world renowned rating agency, in one sweeping move yesterday downgraded 11 most famous banks in the world stating that the current downturn could be longer and deeper than previously anticipated.
Among the banks which have been downgraded include six American banks and five European banks. Six major US banks were downgraded including JP Morgan Chase, Bank of America and Wells Fargo as well as five banks in Europe a reputed paper reported today. Citigroup, Morgan Stanley, Goldman Sachs had their ratings clipped by two notches each. Barclays Bank, Credit Suisse, Deutsche Bank, Royal Bank of Scotland and UBS, all European banks had their ratings shaved one notch off by S&P Downgrading of the banks was driven " in part by the worsening economic climate in the US and abroad" but S&P ascribed specific causes behind the move.
Downgrading came even after the banks were given fresh infusion of capital by the governments to salvage the sector. Tanya Azarchs, analysts for the S&P was quoted as saying "lax underwriting standards due to excess competition mean this cycle will be worse than prior cycles"
Bank of America's takeover of Merrill Lynch raised fear because Merrill could generate more writedowns in commercial real estate and leveraged loans. Purchase of Merrill Lynch carries " unique integration risk" and analyst wrote. ICICI, India's largest private sector bank, appointed Ms. Chanda Kochhar, as its new CEO, "one of the growing number of women who are joining the top echelons of the sector". Saree wearing 47 year Kochhar , who joined ICICI as a management trainee, has occupied the highest position. The other banks which have women in the highest tiers are HSBC, ABN, JP Morgan and UBS.
Deepening economic crisis could see up to 40 percent of private equity firms go out of business within next three years as their portfolio companies default on debts, according to one of the darkest outlook for the industry yet published, a market watcher predicted. The experts are predicting that 40 percent of world's largest funds will fall. Bernard Madoff, investment manager, at the centre of perpetrating a $50 billion fraud, has conceded to lay open his accounting books for scrutiny by the regulators from the Securities and Exchange Commission which has also been target of investors outrage for its laxity in proper scrutiny.
The S&EC and federal regulators are looking for persons who have knowledge about Madoff's operations or helped him in the fraud. Another scandal is brewing in Brunswick, a public relations firm. It has hired the services of a law firm to look into the allegation that the husband of a partner of the company was involved in an insider trade scheme that used information from his wife. Mastthew Devlin, a former Lehman Brother executive, pleaded guilty to charges of conspiracy to commit insider trading and securities fraud.
New York city and most of US's east coast recorded more than six inches of snow fall yesterday thus disrupting sales at the most busy time of shopping in US. The onset of inclement weather has added to retailer's woes that shopper will stay home on the last week end before X-Mas. All retailers to clear their stockpiled inventories are offering lucrative rebates to draw customers.
South Asia in the brink of a war Ms Arundhati Ghosh, who was India's deputy high commissioner to Bangladesh under JN Dixit, has strongly urged the government of India to take military action against Pakistan. Arundhati who later became India's permanent representative at the UN and played a strong role in refusing to sign the nuclear non-proliferation treaty said "You have a commando style attack on our country, they kill our people and we are supposed to show restraint ?" Which other country does that she asked and said "we should go in and bomb the daylight out of them" She joined Vikram Sood, a former chief of Research and Analysis Wing (RAW) India's equivalent of CIA said without military action the country would face more attacks akin to the recent coimmando style assault on Mumbai. New Delhi should consider tougher action such as air strikes or covert measures against backers of the audacious Mumbai, Sood was quoted as saying by a reputed paper.
Sood clamouring for strong military action went on to say "Unless we do that we will continue to have this problem with us. We are not making a virtue of our assault" Pradeep Kaushiva, a retired Vice-Admiral was quoted by the same paper as saying "hawkish stance represented the views of the military. I am sure that 100 percent of people in uniform of the armed forces feel just as any other citizen. All of them are saying that Pakistan must pay a price for the Mumbai attack.
India's foreign minister Pranab Mukherjee who had discounted the possibility of a military attack against Pakistan has reneged, saying India would consider all options if Pakistan fail to curb terrorism on its borders. US and Britain are making efforts at cooling down the temperature but at the same putting pressure on Pakistan to combat terrorism. US secretary of state Condi Rice and British prime minister visited India and Pakistan recently. Kanwal Singh, a former foreign secretary of India took a more sober approach saying India do not have easy option but called for formally severing the peace dialogue with Pakistan.
NEW YORK, Dec 20: Standard and Poor, the world renowned rating agency, in one sweeping move yesterday downgraded 11 most famous banks in the world stating that the current downturn could be longer and deeper than previously anticipated.
Among the banks which have been downgraded include six American banks and five European banks. Six major US banks were downgraded including JP Morgan Chase, Bank of America and Wells Fargo as well as five banks in Europe a reputed paper reported today. Citigroup, Morgan Stanley, Goldman Sachs had their ratings clipped by two notches each. Barclays Bank, Credit Suisse, Deutsche Bank, Royal Bank of Scotland and UBS, all European banks had their ratings shaved one notch off by S&P Downgrading of the banks was driven " in part by the worsening economic climate in the US and abroad" but S&P ascribed specific causes behind the move.
Downgrading came even after the banks were given fresh infusion of capital by the governments to salvage the sector. Tanya Azarchs, analysts for the S&P was quoted as saying "lax underwriting standards due to excess competition mean this cycle will be worse than prior cycles"
Bank of America's takeover of Merrill Lynch raised fear because Merrill could generate more writedowns in commercial real estate and leveraged loans. Purchase of Merrill Lynch carries " unique integration risk" and analyst wrote. ICICI, India's largest private sector bank, appointed Ms. Chanda Kochhar, as its new CEO, "one of the growing number of women who are joining the top echelons of the sector". Saree wearing 47 year Kochhar , who joined ICICI as a management trainee, has occupied the highest position. The other banks which have women in the highest tiers are HSBC, ABN, JP Morgan and UBS.
Deepening economic crisis could see up to 40 percent of private equity firms go out of business within next three years as their portfolio companies default on debts, according to one of the darkest outlook for the industry yet published, a market watcher predicted. The experts are predicting that 40 percent of world's largest funds will fall. Bernard Madoff, investment manager, at the centre of perpetrating a $50 billion fraud, has conceded to lay open his accounting books for scrutiny by the regulators from the Securities and Exchange Commission which has also been target of investors outrage for its laxity in proper scrutiny.
The S&EC and federal regulators are looking for persons who have knowledge about Madoff's operations or helped him in the fraud. Another scandal is brewing in Brunswick, a public relations firm. It has hired the services of a law firm to look into the allegation that the husband of a partner of the company was involved in an insider trade scheme that used information from his wife. Mastthew Devlin, a former Lehman Brother executive, pleaded guilty to charges of conspiracy to commit insider trading and securities fraud.
New York city and most of US's east coast recorded more than six inches of snow fall yesterday thus disrupting sales at the most busy time of shopping in US. The onset of inclement weather has added to retailer's woes that shopper will stay home on the last week end before X-Mas. All retailers to clear their stockpiled inventories are offering lucrative rebates to draw customers.
South Asia in the brink of a war Ms Arundhati Ghosh, who was India's deputy high commissioner to Bangladesh under JN Dixit, has strongly urged the government of India to take military action against Pakistan. Arundhati who later became India's permanent representative at the UN and played a strong role in refusing to sign the nuclear non-proliferation treaty said "You have a commando style attack on our country, they kill our people and we are supposed to show restraint ?" Which other country does that she asked and said "we should go in and bomb the daylight out of them" She joined Vikram Sood, a former chief of Research and Analysis Wing (RAW) India's equivalent of CIA said without military action the country would face more attacks akin to the recent coimmando style assault on Mumbai. New Delhi should consider tougher action such as air strikes or covert measures against backers of the audacious Mumbai, Sood was quoted as saying by a reputed paper.
Sood clamouring for strong military action went on to say "Unless we do that we will continue to have this problem with us. We are not making a virtue of our assault" Pradeep Kaushiva, a retired Vice-Admiral was quoted by the same paper as saying "hawkish stance represented the views of the military. I am sure that 100 percent of people in uniform of the armed forces feel just as any other citizen. All of them are saying that Pakistan must pay a price for the Mumbai attack.
India's foreign minister Pranab Mukherjee who had discounted the possibility of a military attack against Pakistan has reneged, saying India would consider all options if Pakistan fail to curb terrorism on its borders. US and Britain are making efforts at cooling down the temperature but at the same putting pressure on Pakistan to combat terrorism. US secretary of state Condi Rice and British prime minister visited India and Pakistan recently. Kanwal Singh, a former foreign secretary of India took a more sober approach saying India do not have easy option but called for formally severing the peace dialogue with Pakistan.