Category: Banking & Finance

I. USA PATRIOT Act, Title III

On October 23, 2001 President George W. Bush signed into law the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 ("USA PATRIOT Act," or "Patriot Act"). [1] Since its enactment in 2001 and subsequent partial reauthorization in 2005, many financial institutions have struggled with the high cost of complying with Title III of the Patriot act and the stiff civil and criminal penalties for those who fail to comport to its requirements. [2] The Act's adoption of an expansive definition of the phrase "financial institution" has increased its range of regulation with portions of the Patriot Act affecting a profusion of entities ranging from commercial banks to travel agencies to casinos. [3]

Of primary concern for financial institutions is Title III of the Patriot Act, the International Money Laundering Abatement and Anti-Terrorist Financing Act of … Read the rest

   As common as it is to find thin greasy pizza in Brooklyn, it is just as common to hear that the New York Attorney General's office is launching a zealous high-profile prosecution of Wall Street. One need only whisper the name "Spitzer" in lower Manhattan to receive a response of colorful epithets and conjure up a regime that has been described as, "the most egregious and unacceptable form of intimidation we've seen in this country in modern times."[1] That is quite a statement considering some of the actions undertaken by the U.S. Justice Department in recent years. However, Mr. Spitzer is safely ensconced in the N.Y. Governor's office; are not the days of feasting on Wall Street over? Not so fast, this past week current Attorney General Andrew Cuomo's office indicated it will pursue firms suspected of "mortgage abuses" linked to the national subprime mortgage fiasco.[2] This article will … Read the rest

 The Initial Public Offering (“IPO”) of Industrial and Commercial Bank of China (“ICBC”) set the record for the amount of money raised among all IPOs ever made over the world. The IPO of ICBC was actually one of the steps the Chinese government had taken to privatize (or at least partially privatize) its four major commercial banks: ICBC, China Construction Bank (“CCB”), Bank of China (“BoC”) and Agriculture Bank of China. CCB and BoC already performed IPOs during the last two years and the IPO of Agricultural Bank of China (“ABC”) is scheduled at 2008. ICBC, established in 1984 when China began its capitalist turn, boasted $724 billion in deposits, 355,000 employees and 18,038 branches, more than three times as many as Bank of America, the USA's largest bank.” In this article, we focus on the listing choices of CCB, … Read the rest

Introduction

    Over the weekend of October 13, 2007, the U.S. Treasury hosted talks with some of the largest U.S. banks with the aim of creating a "superfund" that would be used to provide stability to the shaky credit markets.[1] The meeting included some of the biggest banking institutions such as Citigroup, Bank of America, and J.P. Morgan Chase.[2] This summer brought turmoil in the credit markets as the subprime mortgage fiasco began to bear fruit, and the goal of the proposed superfund is to hedge off fears of future bank defaults as well as invigorate demand for commercial paper, which has since this summer frozen up.[3] This article will review the details of the proposed superfund, its aims, and address some criticism leveled at it as well as the government's role in the process.

Details

      As expected on October 15, 2007, the triumvirate of aforesaid banks … Read the rest

Introduction

One of the hottest topics, when Wall Street recently saw a market turmoil, was whether hedge funds need to be more strictly regulated. As a special investment vehicle designed for large institutions and rich personal investors, hedge funds are notorious for their ruthless trading strategies aiming to reap as high absolute returns as possible, which usually came with very high risks. The financial leverages hedge funds often utilize had more or less contributed to almost every financial crisis we have faced in the last decades. Typical examples include the fall of Long Term Capital Management (LTCM) in late 1990s and its recent counterpart Amaranth in 2006.

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     The New York Times headlines exclaimed, "Terrible and Disastrous Financial Panic in London…Lombard Street Blockaded by a Tumultous and terror Stricken Mob…The Panic without Parellel in the Financial History of England…"[1] Meanwhile, on the streets of London, what began as a slow trickle of people gushed into a torrent pouring on to the streets in order to line up outside the reputable bank. Hours earlier, the aforesaid bank had posted a notice on its premises that attracted some attention, "We regret to announce that a severe run on our deposits and resources has compelled us to suspend payment, the course being considereed under advice the best calculated to protect the interest of all parties…"[2] The crowds' focus was not just limited to the ailing bank, "the tumult became a rout…The doors of the most respectable banking houses were besieged and throngs heaving and tumbling about Lombard Street made that … Read the rest

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    One of the most raucous political fights of 2006 involved the takeover of the British ports operator P&O by DP World, which if fully effectuated would have ceded the control over six U.S. ports to a firm owned by the government of Dubai.[1] A principle objection to the deal was that it in effect would have rendered control of U.S. commerce and a main facet of national security to a government of Middle Eastern country that potentially had links to international terrorism. After a lengthy showdown between the Congress and President, DP World conceded to sell the firm to an American interest.[2] However, what went almost unnoticed was that this new deal was financed with a sukuk, a bond-like financial instrument that concurrently remains consistent with Shariah law.[3] Such issues are part of an emerging sector in the financial industry known as "Islamic Finance." This article traces a … Read the rest