Bankster, heal thyself! Don’t rob your owners because you have no idea what is going on off the over-paid executive’s floor.Â
The usefulness of bank regulations has been thrown into question by the latest blooper, a mere $4 bn of potential capital charges which was discovered 4 years after their creation by Bank of New York Merrill Lynch. This follows the invisible actions by “The London Whale” who ate the profits at JP Morgan Chase without anyone noticing, and the Mexican mismanagement Citibank is still working on to find out how much it lost south of the border. Then too, BNP Paribas is in deep do with NYC bank examiners for sending money out of the USA to embargoed outlaw countries like Sudan and Syria. Meanwhile UBS faces more investigations of its old bad habit of money laundering for US residents.
Here we go again with a “stress test” in the European Union and a batch of regulations here in the USA and new capital adequacy standards by the Bank for International Settlements. But in fact the largest banks are incapable of providing accurate information on what their staffers are up to and what their accounts contain. They are not only too big to fail. They are too big to know what they are doing.
More for paid subscribers follows with two quarterly reports and news from Israel, Britain, Brazil, Canada,Ireland, Sweden, and a few other places like Russia and Ukraine.
*GlaxoSmithKline today reported profits off 30% year-over-year because of a steep decline in its respiratory franchise and disposals of thrombosis drugs, destocking, and the impact of high pound sterling. Weakness also results from the spreading impact of bribery scandals in China. GSK weak profits came in at GBP 668 mn, vs 961 mn in Q1 2013. Per share because of buybacks, core profits were off less, down 18% to 21 pence. The consensus EPS forecast had been 21.4 pence. (Each ADR is equal to 4 UK shares.). Sales fell 14% y/o/y to GBP 5.61 bn, missing analyst forecasts. The loss of Advair US sales because it now is off the reimbursement prescription list and faces copycats. This loss of a blockbuster hurt GSK badly, and new respiratory drugs failed to catch on with the market.
