Views on the integrity of global capital markets
One consequence of recent well-publicized frauds targeting even the most sophisticated of investors (think Madoff, Stanford, et al) is a sharper focus on investor due diligence review of asset managers. The old “Three Ps” (people, process, performance) have given way to increasingly expansive investigations of investment capabilities and the character of firms’ principals.
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Shareholder concerns about a too-cozy relationship between GE and it’s longtime auditor, KPMG, earns a finger wag from the SEC but not much else. Read more
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Following a tumultuous year for global capital markets that saw the longest-ever insider trading sentence and the Olympus Corp. accounting scandal, public trust in the financial services sector has taken another hit, according to the findings of the 2012 Edelman Trust Barometer. Read more
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Social media is here to stay, but the investment community is still waiting on a clear-cut set of regulations on how to use it. What’s allowed? What isn’t? What’s next? Advisers and investors have plenty of questions, but so far, they’ve gotten few regulatory answers. Read more
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In a recent Reuters article, the Bank of England’s Andrew Haldane called for a “radical rethink” of accounting rules for banks. While it’s true that banks (especially large ones) pose a significantly greater systemic risk than other industries, Vincent Papa, CFA, finds it hard to see how new bank accounting rules would benefit investors. Read more
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While the Dodd-Frank industry overhaul remains largely stalled in the U.S., Europe’s financial services sector continues to steam ahead with a wide range of regulatory reforms that will significantly reshape the competitive landscape for European asset managers. None is more important than the review of the Markets in Financial Instruments Directive, or MiFID II.
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The original Volcker vision was actually quite simple and straightforward: eliminate, or otherwise segregate, the risks posed by proprietary trading from the large conglomerate banks that nearly toppled the financial system in 2008. Unfortunately the resulting 300 pages of regulatory hieroglyphics that now pass for the rule proposal likely have its benefactor squirming at any association. Read more
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In a recent survey, CFA Institute asked our members what companies should do with excess cash held on their corporate balance sheets. We asked if they preferred that corporations retain their cash to make investments or self-fund corporate activities, or return the cash to shareowners through an increase in dividends, a special dividend, or a share buyback. We offered a noncommittal other option for the indecisive. The answers were illuminating, pointing to economic and perhaps cultural differences among respondents in markets around the world. Read more
Leave a Comment In a recent interview with Canada’s BNN, Matt Orsagh, CFA, CIPM, director of capital markets policy at CFA Institute, recaps the 2012 Global Market Sentiment Survey. He covers the outlook for equities, the sovereign debt crisis, and employment opportunities for investment professionals.
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While repeated high-level summits of European leaders have failed to solve the sovereign debt crisis, EU public servants continue to explore possible ways to foster financial stability. The most daring proposal is the common issuance of sovereign bonds among Member States. Read more
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