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There’s so much money sloshing around Wall Street right now that there’s hardly enough buckets or hours in the day to absorb it all.
Cryptocurrency exchanges are leading the way to 24/7 trading, and there’s a sense that this is inevitable for other assets as everything gets put on the blockchain. This turns out to be a blessing if you have the insomniacal urge to trade at three in the morning, or a curse if you got into the business back when the 3-6-3 banker lifestyle prevailed. (For those who weren’t around to experience it: you borrow at 3%, lend at 6% and be on the golf course by 3 p.m.)
There are plenty of assets to trade. With SpaceX’s record initial offering still fresh in mind, JPMorgan Chase estimates the US equity market is poised to roar with corporations set to issue $1.5 trillion in new shares over the next two years. That’s the most since the 1990s. Over on the credit desks, bankers with billions of dollars of hung loans are getting off the hook as the investor appetite for risk ramps back up. (Speaking of hangups, UniCredit’s takeover bid for Commerzbank was rejected by Germany, and a Bloomberg columnist says Italian lender’s approach was clumsy.)
For the sake of their bonuses, bankers will have to hope that clients behind the next IPOs don’t know how to negotiate like Elon Musk, who bargained the underwriters down to a fee of zero for the follow-on offering of SpaceX shares. That’s after he squeezed fees for the main part of the offering to a razor-thin margin.
But hey, that’s not much to regret, unlike Mirae Asset Securities, which had to apologize to investors after the brokerage failed to secure any SpaceX shares in the initial public offering — despite being an underwriter. US banks face a probe of their own: how Iran’s supreme leader built a global investment portfolio with exposure to Wall Street banks. A different mea culpa came from Nubank co-founder Cristina Junqueira; she apologized to apoplectic customers after its app sent a false alert that the juggernaut Brazilian bank had been liquidated. — Rick Green
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