In Case You Missed It: Business News Round-Up

Beth 005Contributed by Beth Collinge of CTG – a division of ILX Group plc.


Stocks were down at the end of last week. JPMorgan was fined for its failure to keep client money in separate accounts. The US Congress is set to impose conflict of interest rules on banks and push ahead with reform of the New York Federal Reserve.

Economic Backdrop

  • Stock markets closed down on Friday, hit by a combination of weaker than expected American jobs data, European debt default fears, rumours of large derivatives-related losses at a French bank and concerns that Hungary’s economy may be in a perilous condition.
  • The euro was down 2.5 per cent on the week against the dollar to a fresh four-year low, and was also off versus the pound after a spokesman for the Hungarian prime minister said that Hungary’s economy was in a “very grave situation” due to the last government manipulating official data, and that talk of a default was “not an exaggeration”.
  • On government bond markets, investors were buyers of high-quality assets such as US Treasuries, sending yields sharply lower. The yield on the 10-year note fell to 3.26 per cent, over the week.
  • UK sovereign issues were also bought, and the yield on the 10-year gilt was also down 6bp on the week.
    On commodity markets, Gold rebounded from its mid-week low, with August futures rising 0.6 percent to $1,217.70 an ounce, on demand for an alternative to the slumping euro, though the spot price was still down on the week.

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New Alternative Investments Directive Ruffles Feathers in the EU and Abroad

iStock_000008683901XSmallBy Elizabeth Harrin (London)

Since the economic downturn started, people have been calling for more regulation of the financial markets. And in Europe, we’re about to get some. The European Parliament’s Committee on Economic and Monetary Affairs (ECON) voted this month in favour of the proposed rules that will form the basis of the Alternative Investment Fund Managers Directive.

While it isn’t yet law – the exact details are still to be worked out – the Directive is already unpopular, especially in the UK. ‘Alternative’ funds are those that are not already covered by extensive EU legislation and include hedge funds, real estate funds, commodity funds and private equity. The Directive agrees to tighten up the rules on hedge funds, and as most of Europe’s hedge funds are head-quartered out of the UK, British commentators believe there is a risk that London’s financial centre will suffer as firms move out.

In addition, the new rules will prevent a non-EU fund from marketing itself to Europe as a whole. Just because your hedge fund is cleared to do business in one country, doesn’t mean it will have an automatic right to be traded in any of the other EU states. This is the clause that many in the UK find most restrictive, and there is a genuine worry that trading with the US will be affected because of the tighter rules.

However, it’s not all bad news. “In several areas we have secured significant improvements, including greater proportionality for small funds, greater clarity and flexibility in depositary liability requirements, and the removal of the more burdensome private equity requirements,” says Sharon Bowles, Liberal Democrat MEP and Committee Chair. “I welcome the several workable and sensible changes introduced in this report and think that when these are merged with the [European] Council’s report we will be 90% of the way towards a very good text. My liberal colleagues and I have worked very hard to improve the proposed AIFM Directive and ensure that it finds the right balance between regulating the fund industry and ensuring that it can still be successful.”

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Happy Memorial Day

barbecueBy Melissa J. Anderson (New York City)

In honor of Memorial Day, The Glass Hammer is taking the day off – and hopefully, you are too! If you have some time to spare today, why not catch up on a few of our recent popular stories?

And, don’t forget to check out our upcoming July event: Women in IT – Staying Technical and Getting to the Top. We’re also planning another buy-side event for this fall – so keep an eye on our events page!

Finally, The Glass Hammer is always looking for more writers. Do you have a story to tell? Email me at melissa@theglasshammer.com and we’ll talk about putting your voice on the site!

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In Case You Missed It: Business News Round-Up

Beth 005Contributed by Beth Collinge of CTG – a division of ILX Group plc.

After hitting a 4-year low against the US dollar last week, the Euro rallied to above $1.26 on Friday. Equities also sold off across the board, while US and German government bonds enjoyed strong gains. Santander is in talks about merging its US operations with M&T Bank. The US Senate approved a sweeping overhaul of financial regulation.

Economic Backdrop

  • A dramatic deterioration in investor confidence triggered across-the-board risk reduction and a flight to quality this week. One big knock to investor confidence came from Germany’s unilateral, and totally unexpected, ban on “naked” short-selling (selling securities that are not owned or borrowed). The ban applies to eurozone Sovereign bonds, credit default swaps as well as the shares of a group of 10 leading German financial stocks, including Deutsche Bank and Commerzbank, and will last until March 31, 2011.

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Telling Amy’s Story: A Call to Action

Newseum

Newseum

By Elisabeth Grant (Washington, D.C.)

On November 8, 2001, Amy Homan McGee, Verizon Wireless employee and mother of two, was shot and killed by her husband Vincent McGee in their home in Pennsylvania. Vincent McGee was convicted of the murder and is now serving a life sentence in prison. This was not an isolated moment of violence, but rather the last event after years of abuse. While McGee’s story is shocking and sad, what is more disturbing is that her life, and death, are like so many other victims of domestic abuse.

Domestic violence lives in darkness. In shame, in isolation, and in silence. To shine a light on what happened to McGee, and to illuminate the issues of domestic violence across the country, Penn State Public Broadcasting, with funding from the Verizon Foundation, put together Telling Amy’s Story. The film celebrates the times family, friends, and law enforcement stepped up and reached out to McGee. But it also highlights the many missed opportunities to stop the domestic violence in her life.

Telling Amy’s Story reached an audience of public officials, advocates in the fight against domestic violence, and the media on Tuesday, May 18, 2010 at the Newseum in Washington, D.C. Before the screening of the movie numerous speakers took part to educate and open the dialogue on domestic violence.

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In Case You Missed It: Business News Round-Up

Beth 005Contributed by Beth Collinge of CTG – a division of ILX Group plc.

At the beginning of the week, the euro gained almost 2 per cent against the US dollar. Goldman Sachs has commenced negotiations with the SEC in order to try and reach an out-of-court settlement of the agency’s civil fraud action against the bank.

Economic Backdrop

  • In the currency markets, sterling initially rose against the dollar after the announcement of the UK’s Conservative/Liberal Democrat coalition. Investors in Europe had been buyers of sterling, as they see the UK as a safe haven compared to the turbulence in Europe. However, sterling ended the week lower after the Bank of England issued a doveish inflation report, indicating continuing low interest rates.
  • At the beginning of the week, the euro gained almost 2 per cent against the US dollar, when the European Union and the International Monetary Fund announced an emergency funding facility worth as much as €720bn (£625bn). The stabilisation scheme consists of government-backed loan guarantees and bilateral loans worth up to €440bn provided by eurozone members; a further €60bn supported by all EU members; and up to €220bn provided by the IMF.
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Voice of Experience: Anne Weisberg, Director, Talent, Deloitte

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weisberg photo (2)By Melissa J. Anderson (New York City)

“I have to say I love my job,” said Anne Weisberg, a Director in Talent at Deloitte. “It’s a big part of why I feel good about my work/life fit. You have to love what you do, or the sacrifices don’t feel worth it.”

Weisberg, having worked as a lawyer and a consultant, as well as having authored two books and several studies, is an expert on the issue of work/life fit. A frequent and passionate speaker on work/life issues, the importance of gender diversity in the workplace, and other talent issues, Weisberg is working to shift the structural norms that make it difficult for women and men to achieve their full potential in the workplace.

Her career and expertise is built around her own personal experiences. She explains, “I graduated from Harvard Law School in 1985 – when I was five months pregnant. I’ve been a working mom for my entire professional life.”

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In Case You Missed It: Business News Round-Up

Beth 005Contributed by Beth Collinge of CTG – a division of ILX Group plc.

The Dow Jones suffered its worst intra-day points fall. The Euro hit a one-year low against the Dollar on fears about the Euro-zone’s financial stability, following the Greek financial crisis. After Britain’s election produced a hung parliament, parties are working out a power-sharing deal.

Economic Backdrop

  • On Thursday 6 May a cascade of automated trades caused the Dow Jones Industrial Average to suffer its worst intra-day points fall – 998.5, or 9.2 per cent. It then recovered slightly, but it still ended the week down 5.71%. On Friday, 7 May, the FTSE 100 lost £35bn in value and, around the world, stockmarkets tumbled, with nearly $1 trillion wiped off the value of shares worldwide.
  • Wall Street’s fear gauge, the CBOE Volatility index, or the VIX, rose 26% Friday, to 41.43, ending at a fresh 12 month high.
  • The euro hit a one-year low against the dollar, falling nearly 5% as fears spread over Europe’s financial stability. Despite approval earlier this week of a €110 billion ($145 billion) bail-out of Greece by euro-zone countries and the International Monetary Fund, investors are worried that this will not prove sufficient, and that other European countries, notably Portugal and Spain, will get drawn into the crisis.

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In Case You Missed It: Business News Round-up

Beth 005Contributed by Beth Collinge of CTG – a division of ILX Group plc.

Market interest remains centred around the Greek/Eurozone financial crisis, with the number of economists calling for Greece to withdraw from the Euro increasing. Goldman Sachs executives have had to defend themselves during a day-long grilling by the Senate subcommittee on investigations. An ecological disaster is growing in the Gulf of Mexico, where a massive oil slick is threatening the Louisiana coastline.

Economic Backdrop

  • The DJIA closed at 11,009, 2.22% below the 52-week high of 11,258, which it reached on 26 April 2010. It had initially risen on news of strong US consumer confidence figures and of a 3.2% quarterly growth for US GDP, and then rose again after the Federal Reserve, which is chaired by Ben Bernanke, said that rates were likely to remain low because of low inflation and elevated unemployment. The index fell back on reports that Goldman Sachs could face criminal charges relating to its mortgage derivative activity, and on continuing concerns over the banking regulatory bill.
  • The FTSE 100 in London lost nearly 3% after the shares of Barclays and BP fell, due to disappointing earnings and the Gulf of Mexico oil slick, respectively.

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The Changing Role of Finance: Business Partnering

Businesswoman holding presentationBy Elizabeth Harrin (London)

A new study by PricewaterhouseCoopers shows that finance functions are moving away from being transactional centres and becoming key strategic business partners, assisting with decision making. Nearly two thirds of participants in PwC’s benchmarking work said that their finance function primarily acts as a support group for the CEO and the strategic planning process.

PwC’s finance effectiveness benchmark study looked at the finance functions of 1700 businesses in over one hundred FTSE 200 and international companies. It shows that CFO’s have a tough job to do: balancing running an efficient division and providing proactive and insightful information to support business decisions. And of course motivating their teams as we come out of recession, when many of them will have seen colleagues pack up their personal effects in a cardboard box and leave.

Times have been tough for finance teams recently, and they now carry the demands of the wider organisation to steer them along the path to recovery. This is what has prompted adoption of a new model of working with the rest of the business: partnering.

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