Summary of “The real Goldfinger: the London banker who broke the world”

This is the story of how their dream failed and how a London banker’s bright idea broke the world.
City banks, which could no longer use sterling in the way they were accustomed, began to use dollars instead, and they obtained those dollars from the Soviet Union, which was keeping them in London and Paris so as to avoid becoming vulnerable to American pressure.
In the US, there were limits on how much interest banks could charge on dollar loans – but not so in London.
In 1962, Warburg learned from a friend at the World Bank that some $3bn was circulating outside the US – sloshing around and ready to be put to use.
Warburg’s new bond issue – these bonds became known as “Eurobonds”, after the example set by eurodollars – was led by Ian Fraser, a Scottish war hero turned journalist turned banker.
The US Office of the Comptroller of the Currency, who administered the federal banking system, opened a permanent office in London to inspect what the British branches of American banks were up to.
If you had money, thanks to the accommodating bankers of London and Switzerland, you could now do what you wanted with it and governments could not stop you.
Countries have chased after the business they have lost offshore, thus making the onshore world ever more similar to the offshore piratical world that Warburg’s bankers created.

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Summary of “We Wanted Safer Banks. We Got More Inequality.”

A few years ago, one of Karen Petrou’s banking clients gave her an unusual assignment: It wanted her to write a paper laying out “The unintended consequences of the post-financial-crisis capital framework.” Petrou is the co-founder of Federal Financial Analytics Inc., a financial services consulting firm in Washington that focuses on public policy and regulatory issues.
As the American Banker once described her, “The sharpest mind analyzing banking policy today – maybe ever.” Whenever I’m writing about banking issues, she’s the first person I call.
Banking regulations make it worse because the capital requirements imposed after the banking crisis make it a lot more expensive for banks to do a startup small-business loan than go into wealth management.
Startup loans are riskier than wealth management, of course, but the capital costs have become prohibitive, and banks don’t lose money on purpose.
JN: Can you really blame the banks for behaving in this fashion?
KP: Thanks to the new capital requirements, it’s basically impossible for banks to make mortgage loans to anyone but wealthy customers, unless they can send the loan to the GSEs or taxpayer-backed Ginnie Mae.
The new capital requirements also discourage banks even from sending loans to the GSEs or Ginnie – if the loan to a low, moderate-, or middle-income borrower is kept on the bank’s books, there’s a very large capital charge at the front end; if it’s sold, the bank still has to hold back-end capital in case the loan defaults and comes back to the bank.
With 60 percent of American financial assets outside the banking system, a monetary policy system predicated on banks being the means through which the economy is stimulated, well, it just doesn’t work anymore.

The orginal article.

Summary of “She’s Joining Goldman’s Most Elite Tier, as Its Youngest Banker”

The caucus started as a small gathering a decade ago organized by Stephanie Cohen – then an up-and-coming banker at Goldman Sachs, who was vexed by the chummy boys network that’s long dominated the business of guiding mergers and acquisitions.
Since the start of this year, Cohen has held the weighty title of chief strategy officer – leading a team that helps decide where the bank should pursue new lines of business or acquisitions of its own.
“A lot of investment bankers have the attention span of a gnat,” said Stephen DeFalco, who was the CEO of Crane & Co. before Goldman Sachs helped sell the company.
Cohen is a Goldman Sachs lifer who started at the bank as an analyst back in 1999, spending time in New York and San Francisco.
Unlike traders, who can shoot to prominence within Wall Street firms at a very young age, Cohen’s career tracked that of the typical banker, climbing to be managing director in the class of 2008.
The group, typically considered the killjoys within investment banking, have to tell senior bankers about the deals they can’t pursue – a tricky task in the best of times.
In a sign of her rising stature, Cohen was selected to lead the creation of a new unit to service a critical client base for Goldman Sachs – the private-equity firms, family offices and other strategic investors who are a force of their own in the deal-making world.
Some there have earmarked her as a candidate to become the first woman to lead the investment banking division, the bank’s most profitable arm.

The orginal article.

Summary of “Summer Camp for the Ultra-Wealthy Teaches Kids How to Stay Rich”

With an average age of 27, attendees at the June YSP and other Next Gen functions hosted by the likes of UBS, Citi Private Bank, Morgan Stanley and Credit Suisse will one day rank among the world’s most sought-after clients.
On one level, these programs-also held in cities such as Zurich, London and Singapore-represent high-end networking opportunities where the young and rich can be young and rich together.
The intimacy “Allows them to let their guard down for a change,” said John Mathews, head of private-wealth management and ultra-high net worth for UBS Wealth Management USA. The gatherings also allow private banks to show off the broad range of services they offer, which is crucial as investing becomes largely commodified-and in any case, isn’t a topic that inspires passion among millennials.
Invitees to the June UBS confab had at least one thing in common: a family account with the bank well into-or above-the eight-digit mark.
Millennials are said to value experiences over things, so UBS had the group walk a mile with a similar can, switching off among themselves as they headed to a chic townhouse for cocktails.
The 23-year-old got some inspiration on marketing the rosé when he was an attendee at last year’s program, after hearing a presentation on disruptive innovation from Luke Williams, a professor of entrepreneurship and marketing at New York University Stern School of Business and regular speaker at the UBS workshops.
At the UBS event, attendees could try out a La Colombe draft latte machine or grab a fresh bottle of Voss water to wash down artfully arranged, freshly baked mini-doughnuts and pretzels with cheese dipping sauce, or a healthier concoction involving chia seeds, dried papaya bits and mint.
The banks often set up LinkedIn groups or Facebook pages and host events during the year, such as UBS gatherings at Art Basel in Miami Beach.

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Summary of “The $247 trillion global debt bomb”

The untold story of the world economy – so far at least – is the potentially explosive interaction between the spreading trade war and the overhang of global debt, estimated at a staggering $247 trillion.
Here’s where the trade war and debt may intersect disastrously.
In the first quarter of 2018 alone, global debt rose by a huge $8 trillion.
In 2018 and 2019, about $1 trillion of dollar-denominated emerging-market debt is maturing, the IIF says.
Debt can either stimulate or retard economic growth, depending on the circumstances.
If debt growth is not sustainable, as Tran believes, new lending will slow or stop.
The meaning of the $247 trillion debt overhang is that many countries will be dealing with the consequences of high or unsustainable debts – whether borne by consumers, businesses or governments.
“If you are in a high-debt situation, you need to bring the debt down, either absolutely or as a share of GDP,” Tran said at the briefing.

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Summary of “Did This Jeweler to the Stars Commit the Biggest Bank Fraud in India’s History?”

It was the biggest bank fraud in India’s history, and it came robed in technical jargon: letters of undertaking and Swift bypasses, margin money and “Nostro” accounts, core banking solutions and buyer’s credit facilities.
A letter of undertaking was a uniquely Indian financial instrument-a relic from the economy’s statist years, when the government controlled the flow of foreign exchange and importers could use only state-owned banks to pay suppliers abroad. India’s central bank recently eliminated them, but they were once a bank’s guarantee for a sum of money in an exchange transaction.
The second bank would then deposit the money into PNB’s nostro account, and PNB would in turn release the money to Modi’s company.
The bank said, they’d refrained from updating the bank’s database, which would have flagged the credit as unapproved and unsecured.
His company had hired two Big Four auditors and a trio of investment banks, and its staff had worked to iron out the various audit irregularities, unrelated to the alleged bank fraud, that had wrinkled its books over the years.
He urged the bank “To be fair” and argued that he ran “a legitimate luxury brand business.” He owed the bank “Substantially less” than $2 billion, he claimed, adding that after PNB had filed its first complaint, he’d offered to sell his company to settle up.
Harsh Vardhan, the head of Bain & Co.’s financial-services practice in India and a trenchant critic of how state banks are run, says he was stunned when news of the PNB fraud emerged.
If Nirav Modi ever makes it back to India, he’ll face multiple charges, including conspiring to defraud PNB and money laundering-accusations his lawyer called “Half-baked” in a statement released in May. In a way, the fraud has cost the state-run banking system not only PNB’s immediate $2 billion but also future funds.

The orginal article.

Summary of “The Biggest Digital Heist in History Isn’t Over Yet”

Since late 2013, this band of cybercriminals has penetrated the digital inner sanctums of more than 100 banks in 40 nations, including Germany, Russia, Ukraine, and the U.S., and stolen about $1.2 billion, according to Europol, the European Union’s law enforcement agency.
The string of thefts, collectively dubbed Carbanak-a mashup of a hacking program and the word “Bank”-is believed to be the biggest digital bank heist ever.
“Carbanak is the first time we saw such novel methods used to penetrate big financial institutions and their networks,” says James Chappell, co-founder and chief innovation officer of Digital Shadows Ltd., a London intelligence firm that works with the Bank of England and other lending institutions.
The Carbanak crew was looking for executives with the authority to direct the flow of money between accounts, to other lenders, and to ATMs. They were also studying when and how the bank moved money around.
As for Katana, Sanchez says he handled the most critical and complex task: He allegedly conducted the reconnaissance of banking systems and then shuffled money around the network like an air traffic controller.
“To attack a bank wasn’t about ‘Let’s steal a million dollars.’ It was, ‘Let’s crack the security the bank is putting in our way.’  ”. Earlier this year the detectives learned Katana and his partners were preparing to up their game with the release of a more potent version of Carbanak.
Unlike the bank jobs of yore, digital heists are amoeba-like ventures that divide over and over again as the malware proliferates.
In recent weeks, employees at banks in the Russian-speaking world have been receiving emails that appear to be from Kaspersky, the security company that unearthed Carbanak.

The orginal article.

Summary of “The Wealthy Are Hoarding $10 Billion of Bitcoin in Bunkers”

Two Xapo clients said it houses roughly $10 billion of Bitcoin.
“Everyone who isn’t keeping keys themselves is keeping them with Xapo,” said Ryan Radloff of CoinShares, which has more than $500 million of Bitcoin stored at Xapo.
The first rule of owning Bitcoin is to securely keep your private key – the code that lets you spend your coins.
“They’re the first folks who recognized custodial and security functions would be key,” said Hoffman, whose venture capital firm Greylock Partners led a $20 million investment in Xapo in 2014, a couple of years after Casares persuaded him to buy his first Bitcoin.
At Xapo, retrieving Bitcoin from the vault takes about two days.
The company also offers customers a trading desk to buy and sell Bitcoin and created the first Bitcoin debit card to spend it.
Xapo only safeguards Bitcoin because of Casares’s belief that it alone will succeed.
“It’s a subject we discuss a lot, and we believe Bitcoin won’t reach the mainstream if people have to hold their own private keys,” Rogers said.

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