Tuesday 23rd December 2014
NEWS TICKER: MONDAY, DECEMBER 22ND 2014: NASDAQ welcomed 313* new listings this year, including 189 initial public offerings (IPOs), worth a combined $22bn -- more IPOs than any other US exchange, representing a 50% increase from the 126 IPOs in 2013. The exchange says that 62% of the top 100 best performing IPOs overall this year, including eight of the top ten, listed on its main board – Meanwhile, TMX Group today announced that Toronto Stock Exchange (TSX) set a new daily volume record on December 19th with 1,535,887,985 shares traded, which surpassed the previous record of 895,769,152, $20,213,746,759. The previous record of $19,278,924,809 was set on September 18th 2008.which was set on December 19th 2008 - Fitch Ratings has revised the Outlook for both Bahrain's Long-term foreign and local currency Issuer Default Ratings (IDR) to Negative from Stable and affirmed the IDRs at 'BBB' and 'BBB+', respectively. The issue ratings on Bahrain's senior unsecured foreign and local currency bonds have also been affirmed at 'BBB' and 'BBB+', respectively. The agency has simultaneously affirmed Bahrain's Country Ceiling at 'BBB+' and Short-term foreign currency IDR at 'F3' - Finnish IT company Neonella Oy (Ltd) is launching a service platform that enables the use of bitcoins, as part of interactive advertising, for example in TV-programs. The service also makes bitcoin transactions possible from media companies or advertisers to consumers. Neonella is currently seeking funding for the platform through a crowdfunding campaign. The payment interface developed enables ordering of goods or services within video or TV programs. It is also possible to vote, donate and encourage the viewers to tell about their opinions as part of the content. The same technology works in internet marketing and banners as well as in TV- and video content. - Citi is reportedly stepping in to absorb the energy and metals commodity-trading books of Credit Suisse. Citi's acquisitions will be added to the trading books it took on from Deutsche Bank this year - Credit Suisse Group meanwhile is focusing on equity trading. The banking group is said to be working with Intercontinental Exchange to restore more trading on the exchange. ICE is proposing a compromise in which exchanges agree to reduce stock-trading prices and banks agree to a rule requiring more trading on exchanges, reports the Wall Street Journal - Looking beyond post FED rate hike actions should be the key for investors to explore deep values at reasonable earnings momentum thinks Is Yatirim in Istanbul. The firm’s analysis think that the world will have to endure “a long period of low-growth, low-environment double whammy, which may not necessarily bad for Turkey [which] has hunger for foreign savings at least for another five years – Private equity firms Lombard Investments and LeapFrog Investments have bought just under 11% of the shares of Thai insurer Syn Mun Kong (SMK) for $57.5m from the Royal & Sun Alliance Group (4.35m shares at around $13.20 each), according to a regulatory filing - VTB Capital has successfully completed the RUB 2.5 billion securitisation deal for AK BARS BANK mortgage portfolio​ as part of the Vnesheconombank's programme for investing in affordable housing and mortgages in 2010-2013 - According to the US government technology news agency, North Korea has denied the Obama administration's allegations that it launched the hack attack against Sony Pictures Entertainment and has demanded that a joint investigation with the US into the incident be launched. The secretive communist regime, based in Pyongyang, also promised there would be "grave consequences" if the United States failed to agree to the joint probe. - Fitch Ratings has revised the Outlooks on Bahrain's Long-term foreign and local currency Issuer Default Ratings (IDR) to Negative from Stable and affirmed the IDRs at 'BBB' and 'BBB+', respectively. The issue ratings on Bahrain's senior unsecured foreign and local currency bonds have also been affirmed at 'BBB' and 'BBB+', respectively. The agency has simultaneously affirmed Bahrain's Country Ceiling at 'BBB+' and Short-term foreign currency IDR at 'F3' - Finnish IT company Neonella Oy (Ltd) is launching a service platform that enables the use of bitcoins, as part of interactive advertising, for example in TV-programs. The service also makes bitcoin transactions possible from media companies or advertisers to consumers. Neonella is currently seeking funding for the platform through a crowdfunding campaign. The payment interface developed enables ordering of goods or services within video or TV programs. It is also possible to vote, donate and encourage the viewers to tell about their opinions as part of the content. The same technology works in internet marketing and banners as well as in TV- and video content. - Citi is reportedly stepping in to absorb the energy and metals commodity-trading books of Credit Suisse. Citi's acquisitions will be added to the trading books it took on from Deutsche Bank this year - Credit Suisse Group meanwhile is focusing on equity trading. The banking group is said to be working with Intercontinental Exchange to restore more trading on the exchange. ICE is proposing a compromise in which exchanges agree to reduce stock-trading prices and banks agree to a rule requiring more trading on exchanges, reports the Wall Street Journal - Looking beyond post FED rate hike actions should be the key for investors to explore deep values at reasonable earnings momentum thinks Is Yatirim in Istanbul. The firm’s analysis think that the world will have to endure “a long period of low-growth, low-environment double whammy, which may not necessarily bad for Turkey [which] has hunger for foreign savings at least for another five years – Private equity firms Lombard Investments and LeapFrog Investments have bought just under 11% of the shares of Thai insurer Syn Mun Kong (SMK) for $57.5m from the Royal & Sun Alliance Group (4.35m shares at around $13.20 each), according to a regulatory filing - VTB Capital has successfully completed the RUB 2.5 billion securitisation deal for AK BARS BANK mortgage portfolio​ as part of the Vnesheconombank's programme for investing in affordable housing and mortgages in 2010-2013.

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Regulatory Update

Lessons from an Industry Titan: Jamie Dimon’s Testimony

Friday, 15 June 2012 Written by 
Lessons from an Industry Titan: Jamie Dimon’s Testimony This week, J.P. Morgan Chase’s CEO, the highly regarded Jamie Dimon, testified before the US Senate banking committee regarding the failures of its Chief Investment Office (CIO), the group responsible for certain well-publicized losses. We thought his testimony provided more than a few lessons on governance matters and the state of the world generally. Here they are: http://www.ftseglobalmarkets.com/

This week, J.P. Morgan Chase’s CEO, the highly regarded Jamie Dimon, testified before the US Senate banking committee regarding the failures of its Chief Investment Office (CIO), the group responsible for certain well-publicized losses. We thought his testimony provided more than a few lessons on governance matters and the state of the world generally. Here they are:

"[W]e are still reviewing the facts...”

Lesson: Never speak out publicly in a definitive way until you fully know the facts.  You will not fully know the facts for months.



"...I will explain everything I can to the extent possible."

Lesson: Even for Dimon, transparency matters.

"CIO's strategy...was poorly conceived and vetted.  The strategy was not carefully analyzed or subjected to rigorous stress testing.... CIO's traders did not have the requisite understanding of the risks they took.”

Lesson: Didn’t we learn this lesson in 2008? Back then we learned that some strategies had assumptions that seemed poorly founded in retrospect. This was particularly true about the behavior of the mortgage markets and their derivatives.  Guess the lesson is that most people never learn this lesson. Before a system or strategy is implemented, and periodically thereafter, management (including the board) should ask the probing questions. Make no assumptions on this score.

"Personnel in key control roles in CIO were in transition and risk control functions were generally ineffective in challenging the judgment of CIO's trading personnel.”

Lesson: The press reported that the CIO’s then-current chief risk officer began to internally express his concerns about London office trading strategies last year. This past January, he was replaced as the head of risk by a former trader who, at least according to the press reports, had no prior risk management experience. This lesson relates to human nature: it's very hard to appreciate someone who has a different point of view. Watch out – he may be right.

"Risk Committee structures and processes in CIO were not as formal or robust as they should have been.”

Lesson: Assessments have to be substantive, robust, and “real”, and be tested and documented regularly as assumptions and/or reality changes. Structure, process and formality may not protect you from all losses, but they can provide a protective shield that will hopefully mitigate them. Be sure to build your protective shield. 

 

Deborah Prutzman

Deborah Prutzman is the founder and CEO of The Regulatory Fundamentals Group (RFG), a New York-based firm that designs and implements business and risk solutions for alternative asset managers and institutional investors. RFG's senior-led team employs a robust suite of tools, including practical alerts on new and potential industry developments and its powerful RFG Pathfinder® knowledge management platform which simplifies the challenges of operating in a regulated environment.  To learn more about The Regulatory Fundamentals Group call (212) 537-4058, email a representative at Information@RegFG.com or visit RegFG.com

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