Although the economic slowdown has affected banks in Latin America, they still remain profitable and well capitalized.

Thomson Reuters Ownership Intelligence offers free access to industry reports, investor profiles, job movements of investment professionals, and much more. Follow them on Twitter.

The European Central Bank announced yesterday that it would begin a three month lending program to commercial banks aimed to ease funding issues during the sovereign debt crisis. The news acted as a catalyst for European banks’ stock prices, particularly those of French banks, given the added liquidity for the financial companies. Investors in these equities will enjoy these gains as the short-term fix comes after the banks have struggled to get dollar funding this year.

I’ve put together this ownership report that identifies the top institutional investors in the European and French banking sectors.

SocGen and Credit Argicole have bigger problems than Wednesday’s Moody’s debt downgrade, says Reuters analysts Ed Rombach and Mike Tarsala.

America’s leading mortgage lenders vowed in March to end the dubious foreclosure practices that caused a bruising scandal last year. But a Reuters investigation finds that many are still taking the same shortcuts they promised to shun, from sketchy paperwork to the use of “robo-signers.”

To learn more, download the report or click on the picture below.



European policymakers are desperate to avoid any restructuring of Greek sovereign debt being classified by rating agencies as credit event-or a default. But throwing emergency cash at Europe’s sovereign debt crisis has inflamed problems, not solved them. The greater risks to the single European currency lay inside the Euro Zone’s banks and closer fiscal union might be the only way to underwrite their solvency.

Reuters Insider analyzes the risks to pension funds of a wave of bank debt problems.

An interesting survey by Thomson Reuters showed that implications of OTC derivatives regulation on capital requirements, workflow, the cost to trade and liquidity for single-bank platforms are considered by banks to be unknown outcomes of concern resulting from the proposed shake-up. The survey covered senior positions with job titles ranging from head of desk to head of operations, post-trade and compliance to strategy and business managers. Thomson Reuters has also set out a timeline for its own regulatory-compliance activities that should help allay concerns. Read more in the press release.

 

Liaquat Ahamed’s talk at the Aspen Ideas Festival began with a tour of some colorful characters of the early 20th Century world of banking, but quickly morphed into an insightful comparison of the 1929 stock market crash with more recent woes.  The two bubbles show many similarities (e.g., overly easy credit leading to overborrowing) and some differences (an imminent sense of doom in the 1920s, versus financial hubris in the run up to 2008-2009).

But the main contrast is between how the US government handled the banking crisis once the bubble burst.  In the aftermath of 1929, banks were allowed to fail, budget deficits were avoided, and interest rates were allowed to rise.  Say what you like about Paulson, Geithner and Bernanke, but they did not repeat the mistakes of the 1930s.  The stock market may have fallen a comparable 50% or so, but the recent crash was not accompanied by 25% unemployment.  Ahamed attributes the avoidance of this outcome to the well-known bank bailouts, stimulus packages and interest rates controls, and it’s hard to disagree.

Longer term, he is also cautiously optimistic about internationalism and globalization: ‘The dog that has not barked is protectionism.’  Avoiding trade and currency wars seems only wise, and the existence of institutions such as G8 and G20 has helped build consensus and cooperation this time around.  More controversial was his view that the world risks losing the US as a ‘leader of the global economy’, while other players (such as China) are not yet ready to assume that role.

At the end of question time, Ahamed introduced the sobering idea that we are about to enter a ‘lost decade.’  In other words, growth and stability will have to give way to significant changes in both our economic and social arrangements.  If found it easy to believe that this is so, and that the 2010s could join the 1930s and the 1970s in history as a time of more or less painful adjustment.

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After the near collapse of the US financial system, there is still caution surrounding the state of worldwide markets. Europe has experienced similar problems with their banking system as they struggle to right the ship. Today’s graphic takes a look at measuring the stress levels of a multitude of European banks. By changing the selections on the right side of the graphic, you can see which banks have failed, which banks were closest to failing, and how much capital the banks hold.

After clicking through the different measurements, what is your confidence in the state of the European Banking system? Do you think we’re going to see something similar to what happened in the US, or is the worst behind us? Feel free to let us know in the comment section below.