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European banks to suffer from Obama’s bank attack

Experts are predicting that European banks will not be immune to the consequences of President Barack Obama’s attack on US banks.

The President yesterday set out plans that would substantially limit the propriety trading the size of America’s biggest banks. But UBS says the affects of the sweeping changes will be felt on this side of the Atlantic.

Although not directly targeted and affected by the “Volcker rule”, analysts warn that there are lots of open questions about how these developments might impact the European wholesale banks.

UBS estimates that less than 10% of group profits for the average European investment bank. It predicts Barclays makes 4.2 per cent of its profits from propriety trading, which could be at risk after Obama’s announcement. This on top of Obama’s financial crisis levy he announced last week, which Evolution Securities says could cost European banks with US exposure 12 per cent of profits.

In fact, Barclays and RBS have already been affected by the announcement – Barclays’ shares dropped to a low of 255.65p today after opening yesterday at 302.5p, and is now at 271.7p. RBS dropped to a low of 10.9p today, down from Thursday’s open of 12.5p and is currently at 11.27p.


The sting in the tail

At the risk of becoming a bore, (or even more of one, as a few anonymous fans have suggested), I again find fault with our lords and masters at Canary Wharf. They were everybody’s favourite whipping boy in 2009 and this year looks like being no different. On this occasion, my ire has been raised […]

Aviva academy signs 5,000 members

The Aviva Financial Adviser Academy has signed up 5,000 members since its launch in March 2008. The academy, in partnership with the Chartered Insurance Institute, offers an education package which aims to help advisers attain the CII diploma in financial planning. Since the academy was laun-ched, more than 2,800 members have sat a CII diploma […]

Abe and Modi

India: Modi, reform and the oil price fall

Nearly 12 months since sweeping to power, prime minister Narendra Modi has overseen a significant turnaround in India, which is now on track to become one of the most pro-growth, pro-investment economies in Asia. While the market has rallied 48 per cent over the last year in response to Modi’s reform agenda, what is the potential for further progress?


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