Europe: Yanks Go Home (And Take Your Banks With You)

[girl gone mad]

Looks like the fallout from Goldman's dirty dealings in Greece may be much wider than initially expected.

Europe: Yanks Go Home (And Take Your Banks With You)
http://www.businessinsider.com/wall-street-shut-out-of-european-sovereign-debt-deals-2010-3

Europe has put a stop to Wall Street investment banks' involvement in major European sovereign debt deals, according to The Guardian.

Banks like Goldman Sachs and JP Morgan have been shut out of the top ten list of sovereign debt deal makers leaving only Morgan Stanley the chance to creep in at number 10, according to The Guardian's Dealogic data.

The Guardian perceives this to be a considered backlash against the much maligned ways of the Wall Street bank.

The Vice Chair of the European Parliament's committee on economics went so far as to say, "Governments do not have the confidence that the excessive risk-taking culture of the big Wall Street banks has changed and they still cannot be trusted to put the stability of the financial system before profit."

This comes just days after the Greek government banned hedge funds from buying their new debt.

[Ghost Dog]

1. Heh. Nice way to put it. Here's the Guardian:

Europe bars Wall Street banks from government bond sales

European countries are blocking Wall Street banks from lucrative deals to sell government debt worth hundreds of billions of euros in retaliation for their role in the credit crunch. For the first time in five years, no big US investment bank appears among the top nine sovereign bond bookrunners in Europe, according to Dealogic data compiled for the Guardian. Only Morgan Stanley ranks at number 10. Goldman Sachs doesn't make the table. Goldman made it to number five last year and in 2006, and number eight in 2007, the data shows. JP Morgan was in the top ten last year and in 2007 and 2006 but doesn't appear this year.

"Governments do not have the confidence that the excessive risk-taking culture of the big Wall Street banks has changed and they still cannot be trusted to put the stability of the financial system before profit," said Arlene McCarthy, vice chair of the European parliament's economic and monetary affairs committee. "It is no surprise therefore that governments are reluctant to do business with banks that have failed to learn the lesson of the crisis. The banks need to acknowledge the mistakes that were made and behave in an ethical way to regain the trust and confidence of governments." European sovereign bond league tables are now dominated by European banks such as Barclays Capital, Deutsche Bank, and Société Générale, the Dealogic table shows. Their business model is usually seen as more relationship-based, while US investment banks have traditionally been focused on immediate deal-making.

Being left out of government bond sales means missing out on one of the top fee-earning opportunities this year, given the relative drought in mergers and acquisitions and stock market flotations. Western European governments need to raise an estimated half a trillion dollars this year to refinance debts and pay for bank bailouts and rising unemployment. Banks typically take a percentage of the total deal value for underwriting a bond issue, which could run into tens of millions given the ballooning sovereign debt sales this year. On a 1% fee, Barclays Capital would have pocketed $92m (£61m) from the $9.2bn European bonds it helped sell this year.

...

The National Bank of Greece featured in the top 10 for the first time in at least five years, according to Dealogic. Greece left Goldman and Morgan Stanley out of its most recent bond sale, and also dropped hedge funds from its list.

...

Greece, Spain, Germany and France are also pushing for changes in the credit default swap market, where investors can bet against the possible default of a country, ultimately bringing more instability. Britain, Spain, Ireland and Belgium have not used Wall Street firms in the largest 10 deals of the year, according to Dealogic.

/... http://www.guardian.co.uk/business/2010/mar/08/us-banks-european-bond-trading

... Looks lkike a straightforward case to my eye.

[whathehell]

2. I think the thread title should be "Yank Banks go home"

I have a feeling they'd still like our tourist money.

[Jester Messiah]

3. Good on Europe, but I don't want them here either!

Can we exile them or something?

[dixiegrrrrl]

4. Notice Europe can stifle them, but somehow we cannot do a thing over here....tsk tsk.

Nice to see the Karma hitting, tho.:evilgrin:

[Bigmack]

5. So much for the quaint notion

that the US is a "world power!" Hell, we can't even control our own banking system.

And so much for the quaint notion that a strong military is the key to "real" power!

Ms. Bigmack

[bemildred]

6. Yep, we are well on the way to being a "failed state". nt

[upi402]

7. So I'm not the only one thinking we've lost the plot

entirely. We really are ruled by festering buckets of pus. They will at least protect their nation from these fiscal predators. While Team Obama re-installs them here.