Receiving Wide Coverage ...
Big Blue's New Boss: IBM will promote Virginia Rometty to be the first woman chief executive of the 100 year old company on Jan. 1. Currently its top sales executive, Rometty is a 30-year company veteran who's "help[ed] to lead IBM's transformation into a massive services business," according to Wired magazine. As such, the company has become an important vendor in the banking industry. The FT notes Rometty will be "the first head of IBM not to have run part of its traditional hardware business," not to mention "one of only a handful of women to head a large US corporation." New York Times, Wall Street Journal, Financial Times, Wired.
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Euro Division: Ahead of a meeting in Brussels today where eurozone leaders will try to finalize an agreement to solve the continent's debt crisis, government officials and bankers were at an impasse on how much relief to give Greece. The stakes for the summit are high, according to an editorial in the FT: "Fear about states' ability to service their debts is now set on a self-reinforcing course. … What is needed is nothing short of moving voters and markets from a mood of self-fulfilling pessimism to one of confidence in the future." Rather than the half-measures they have taken to date, the editorial argues, Europe's leaders must pony up large sums to support the prices of sovereign debt and push for meaningful concessions from bondholders, both those of Greece and of European banks. A front-page story in the Journal looks at how the sovereign crisis has roiled the world's oldest bank, Monte dei Paschi in Siena, Italy, which has a significant exposure to its home country's debt. Sensing an opportunity in the volatility, Morgan Stanley has formed a group that will advise banks around the world on capital issues, led by investment bankers on both sides of the Atlantic, the Times' "DealBook" reports. Financial Times, Wall Street Journal, New York Times, Washington Post.
Wall Street Journal
Now you see why MetLife wants out of banking. The Fed rejected the insurance company’s request to raise its dividend, over MetLife’s objections.
“CIT CEO John Thain and other executives struck an upbeat tone on commercial-loan demand despite reporting a third-quarter loss, saying the U.S. economy doesn't appear to be headed toward a double-dip recession.”
New York Times
“Deal Professor” columnist Steven M. Davidoff notes investment bankers, faced with a drop in M&A advisory work, have been “crisscrossing the nation peddling spinoffs” – which he finds ironic given the possibility shareholders may pressure the bankers’ employers to break themselves up.
You wouldn’t think Swiss banking would lend itself well to slideshow treatment. But this series of noir-ish black-and-white photos Mark Henley took around Paradeplatz, a square in Zurich where UBS and Credit Suisse keep their headquarters, would look great on our wall.
Washington Post
Columnist Allan Sloan says the Fed’s Operation Twist could have the unintended consequence of raising companies’ pension obligations.
An article in the Post provides a good refresher on the debate over whether yet another round of Fed intervention in the mortgage markets would do any good. “Leaders at the central bank have become increasingly convinced that problems in the system of housing finance are preventing the interest rate policies the Fed controls from having their usual economic impact,” the article says, though HARP II might help in that regard.
And, Lastly ...
NewScientist: Who’s really “systemically important”? Ask a mathematician. “Complex systems theorists” at the Swiss Federal Institute of Technology analyzed the ownership interests and links among 43,000 transnational companies and identified 50 entities with “disproportionate power over the global economy.” Barclays tops the list and the highest-ranked U.S. bank is State Street (No. 5), just ahead of JPMorgan Chase. Go figure.
