Europe should be wary of stealing London's financial sector

"Excessively large financial sectors damage productivity and growth."

Link: Europe should be wary of stealing London's financial sector

Date: 18th October 2018

Media: The Guardian

• What happened?

Due to the negotiations about the Brexit in United Kingdom, other European countries are using the deep uncertainty about the future financial regulation of the continent’s financial markets to include business and activities.

• Whom and where it affects?

This issue afects the rest of the business and countries in the European Union.

• What sort of public or private institutions are involved?

It involves all institutions, mainly financial and bank sector, the Brexit pretends a financial rethinking about a major financial centre is, of course, unambiguously good for Porsche dealerships, upmarket champagne bars and table dancing clubs.

• Why is it important for Banking and Finance?

Is very important because the relationship between the rest of Europe banks and United Kingdom banks. This banks had lost the capitalization also the interest rates are at historic minimums, apart of the financial crisis because of the brexit, the GDP also suffers a contraction. There was a drop in housing prices, specifically 33%. In addition to all, United Kingdom has  a void on the part of the rest of countries of the European Union, costing them thus to obtain financing outside of UK. 

• What do you think will be the consequences in the foreseeable future?   

The United Kingdom will participate in a real-world experiment that tests the economy. It will produce the substancial relocation of financial activity unless it realice a major advance in the Brexit negotiations. If it happen , the BIS economists won't make a mistake. 

Key words: Brexit, capitalization, GDP, EU, UK, uncertainty, bank, financial, interest.

Fraud of Mortgage Backed Securities

Wall Street

Title: Wall Street

Duration: 120 min.

Country: United States

Director: Oliver Stone

Script: Stanley Waiser, Oliver Stone

Year: 1987

Trailer: https://www.youtube.com/watch?v=FCctqbRrsBQ

Synopsis: Bud Fox (Charlie Sheen) is a young and ambitious stockbroker who finished his university studies thanks to him and his father´s effort (Martin Sheen), who works as a mechanic and as a union boss. His greatest wish is to work with a man he admires, Gordon Gekko (Michael Douglas), who is an unscrupulous man who has made himself and obtained big amounts of money at the stock market in a short period of time. Thanks to his persistence, Bud manages to get into the private circle of the powerful Gekko and starts to collaborate with him in his business and investments. In order to get to the top, he is willing to do anything, including trading on illegal inside information taken through a ruthless and greedy corporate raider who takes the youth under his wing.

"Banking and Finance" in the film

The film is a criticism of the lack of ethics.

Most of the plots and operations that appear in the movie are based on inside information; how they get it, how they use it, how they manipulate quotes up or down by spreading rumors, etc. It is curious to see how they are expanding the circle of rumor as the price reaches pre-set levels.

Another important part of the film is the valuation they make of the Blue Star airline. They carry a cable using the investment of value, valuing their assets at market price.

In the film they face 2 alternatives to monetize the purchase of the Blue Star; immediately break and sell its assets or refloat it and make it a viable company. At that time, Wall Street "sharks" broke several companies in this way to make their investment profitable, but this option is no longer used today.

Nowadays everyone who buys a company with problems seeks to revive it and turn it into a profitable Company.

Personal commentary

The film is set in Wall Street stock market, during the eighties, where we can find the extreme that people could get to win money, even being able to betray their own family. At the same time, we observe the instability of the stock market, winning or losing a lot of money in a moment.

We could also appreciate the tough life that this kind of workers have, trying to ensure the profitability of the financial transactions carried out with their clients´ money, even having to cover possible losses with their own money when those transactions goes wrong.

The film shows a number of troubles that face the power and wealth against simplicity and honesty and the crash of the working-class, represented by Carl Fox, against a business titan like Gordon Gekko.

Nomura, RBS lose bid to overturn $839 million mortgage bond award

Link: https://www.reuters.com/article/us-nomura-lawsuit/nomura-rbs-lose-bid-to-overturn-839-million-mortgage-bond-award-idUSKCN1C3305

Date: SEPTEMBER 28, 2017
Media: REUTERS

What happened?

Nomura Holdings Inc. and Royal Bank of Scotland (RBS) lost a U.S. court appeal to overturn an order requiring them to pay for making false statements while selling mortgage-backed securities to Fannie Mae (FNMA) and Freddie Mac (FMCC).

Whom and where it affects?

This news affects the financial markets, in a global area. The countries affected by this financial scandal are Japan, because Nomura Holding Inc. is a Japanese financial holding company, United Kingdom by RBS and finally, the United States, because FNMA and FMCC are the American corporations where the bonds were sold.

What sort of public or private institutions are involved?

Nomura Holding Inc, Royal Bank of Scotland, FNMA (Federal National Mortgage Association), FMCC (Federal Home Loan Mortgage Corp) and FHFA (Federal Housing Finance Agency). All of them are public institutions.

Why is it important for Banking and Finance?

This information is important for banking and finance because both Nomura and RBS are reference entities worldwide and have been involved in a case of mortgage fraud.

What do you think will be the consequences in the foreseeable future?

This stir will cause the weakening or loss of customers confidence.

Key words: Mortgage bond, Securities, Financial crisis, Housing market, Lawsuits.