Thursday's Headlines: Credit rating downgrade indicates fundamental global shift toward Asian bank prominence
While sometimes a cigar really is just a cigar, in this case a credit rating downgrade is really about a global shift in banking power. Or so says Standard & Poor's Rating Service, whose recent downgrade of six of the largest U.S. financial institutions and the upgrade of two Chinese banks indicates Asian banks are rising in influence. That's according to a Wall Street Journal article.
Asian governments' greater willingness to prop up their financial systems coupled with higher savings rates drove the ratings decisions, adds the article. Money is flowing into emerging markets so the health of their financial systems is continuously improving, whereas in the West, banks are battling with so many issues.
S&P recently cut ratings at J.P. Morgan, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley, among others, while raising ratings at Bank of China and China Construction Bank. There are now three Chinese banks which are rated higher than Bank of America and Citigroup, both of which were bailed out by the government during the financial crisis.
Cantor Fitzgerald will add at least 200 people next year, focused on sales and trading in both debt and equity. [Bloomberg]
More federal insider trading investigations are focused on traders at Diamondback Capital and Level Global Investors. [DealBook]
Societe Generale will cut at least 200 jobs in the U.S. and has dismissed senior employees, including the U.S. head of loan sales and trading. [Businessweek]
BofA will close its private banking unit in Brazil. [Reuters]
Getco will buy BofA's NYSE market-making business. [Businessweek]
Deutsche Bank is pursing the sale of its asset management division. [Bloomberg]
Bay Area Occupy Wall Street protesters aim to move $2 billion from the city of San Francisco's bank accounts into a credit union. [WSJ]
Bats Global Markets finalized the $300 million takeover of Chi-X Europe and will merge the trading platforms next year. [Reuters]
Greenwich, Conn.-based hedge fund Millburn Ridgefield opened a London office focused on Europe and the Middle East. [Hedge Fund Net]
Chase Home Finance regional VP: Bankers acted as enablers. [NY Times]