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The Fed’s troubling stress test calculations

12 July 2018BanksCCAR, Stress testsNick Dunbar

The Fed’s annual stress tests and capital analysis amount to a contest between the regulator’s models of large banks in a crisis and those of the banks themselves. The latest disclosures suggest troubling flaws in the Fed’s calculations.

US banks grow assets beneath regulatory radar

17 April 2018Banks, Risk CommentaryBank of America, Citigroup, JP Morgan, Wells FargoNick Dunbar

Since adopting Basel III reporting standards three years ago, the biggest US banks have started reducing risk weights while increasing lending. Is this a reflection of a healthy US economy or European-style gaming of internal models?

Putting employees over shareholders doomed Deutsche’s Cryan

6 April 2018BanksNick Dunbar

Deutsche Bank’s inability to control its investment bank compensation bill may have doomed John Cryan, analysis of pay disclosures suggests.

Can Goldman recover its trading mojo?

9 March 2018Banks, Risk CommentaryBasel III, electronic trading, Goldman Sachs, MiFID 2, P&L distribution, trading, Value-at-risk, Volcker RuleNick Dunbar

We use risk disclosures to analyse Goldman’s plunge in trading profits, and offer five reasons why revenues are unlikely to recover.

Steinhoff, the banks and the bezzle

2 March 2018Articles, Banks, Risk CommentaryNick Dunbar

A scandal at South African group Steinhoff has hit the large banks that lent $1.6bn to the company’s largest shareholder. Differences in the way banks treated the exposure highlight hidden risks in the financial system.

Did EU banks really ‘slash’ exposure to the UK?

13 December 2017Articles, BanksBrexitNick Dunbar

A €350bn decline in the exposure of EU banks to UK counterparties was widely interpreted as an exodus sparked by Brexit, but closer analysis of the data refutes this interpretation.

What risk disclosures tell us about Goldman’s problems and Morgan Stanley’s success

8 September 2017BanksNick Dunbar

Morgan Stanley has vaulted over Goldman this year in fixed income trading. Analysis of risk disclosures helps explain the divergence between the two firms.

Are the Dodd-Frank stress tests running out of steam?

11 July 2017BanksNick Dunbar

Is the Fed’s DFAST stress test telling us that banks are getting safer, or are the banks just getting better at doing the internal modelling?

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