“Banks don’t have to beat the market to make money. They just have to beat their customers.”
So said Caspar Marney, a foreign exchange trader with about 20 years’ experience, when explaining to the Guardian last March how foreign exchange traders really work.
His point was that if forex traders make money via intelligence, it is not from their own. By virtue of being on the end of the phone, they receive superior intel and use the information contained in client orders to make profit for themselves and their banks.
That’s when these chaps behave legally. Occasionally they might not.
Increasingly it looks as if traders from rival banks were sharing this privileged information, thereby skewing the odds even more heavily in their favour. UBS, JP Morgan, Citigroup, Royal Bank of Scotland and Barclays have collectively set aside about £3bn after beginning negotiations with regulators. The sixth bank involved in those talks – HSBC – reports on Monday, with the guess being it will add £400m to the pot.
All of which ties in with last week’s debut speech as deputy governor of the Bank of England by Nemat “Minouche” Shafik, who said: “Public outrage is based on the fact that rewards in finance are disproportionate and the system is rigged.”
More should be heard from her.
Female directors still being given no quarter
Women, like men, use cleaning products, go shopping and watch TV. You’d hope that even the most unreconstructed boardroom might accept females would know as much about those things, at least, as males.
Which is why it seems doubly odd – on the eve of another female FTSE 100 board report from the Cranfield School of Management this week – to learn of the paucity of women in the boardrooms of companies operating in those industries. As we approach 2015, by which time Lord Davies’s report has set a target for every FTSE 100 board to be at least 25% female, 61 companies in the index are still shy of that goal.
Among them is Reckitt Benckiser, the group behind Vanish and Dettol, with two women out of 11 directors (18.1%); ITV (one from eight – 12.5%); and retailer Sports Direct (one out of six – 16.7%).
Which means that (along with the usual miners and oil groups) they are likely to require an all-female shortlist for their next appointment But that is still a preferable position to Standard Chartered, the bank once run by, er, Lord Davies. Of its 19 directors, just two are female. Still, rumour suggests there may soon be a senior vacancy.
Tales of group sex and chemical reactions
American pharmaceuticals companies have a mixed history of gaining coverage in the UK press, but 2014 has been a purple patch for the sector.
We’ve had the on-off takeovers of UK-listed firms AstraZeneca and Shire by US-based Pfizer and AbbVie. And last week an American company called Aegerion Pharmaceuticals was the recipient of several column inches here after one of its execs became embroiled in the sensational divorce case of the former head of pharmaceuticals at Jefferies investment bank, which involved allegations of drug-taking and group sex (all of which are strenuously denied).
There might be more on all of that this week, as the British media might not yet have tired of the divorce proceedings, while AstraZeneca is reporting results. Somebody is sure to raise a question or two about the likelihood of the British firm becoming an acquisition target again soon.
As analysts at Citi put it: “We continue to affirm our previous position that Pfizer intends to re-approach AstraZeneca following the end of the six-month period required under the UK takeover code” – which is just over three weeks away.
Incidentally, there were other interesting notes published by pharma analysts last week, including one downgrading shares in Aegerion. It was published by, er, Jefferies.