BlueMountain Capital Management (BlueMountain), a private investment firm with over$12 billion in assets under management, is pleased to announce that James E. (“Jes”) Staley will join the firm as its ninth Managing Partner. Mr. Staley joins the firm from J.P. Morgan, where he recently served as CEO of the investment banking division. Along with becoming an integral part of the executive team, Mr. Staley will focus on cultivating relationships and developing new strategies that harness BlueMountain’s strengths, capture opportunities in the market, and deliver them to clients.
“Jes is one of the most experienced and successful leaders in the industry and has played a key role at one of the world’s most successful financial institutions. Not only has he had a front row seat for the evolution of the financial industry, but he’s also one of the most ethical people we’ve worked with,” said Andrew Feldstein , CEO and Chief Investment Officer of BlueMountain. “He shares our enthusiasm for the scale of the opportunities that exist in the market and the unique value proposition that BlueMountain delivers to its clients.”
Mr. Staley will join BlueMountain after more than 34 years at J.P. Morgan, where he served in various executive positions within the bank including heading both the Investment Bank and J.P. Morgan Asset Management. Prior to running the bank’s asset management division, Mr. Staley served as the head of J.P. Morgan’s private bank and was one of the founders of J.P. Morgan’s equities business.
Mr. Staley will join BlueMountain’s Management Committee, its Risk Committee and its Investment Committee and will purchase a stake in the firm. Proceeds from the sale will be invested in new infrastructure, technology and talent.
“I’m very excited to be joining BlueMountain at a time when sea changes in the financial industry combined with the firm’s unique strengths open up enormous possibilities to deliver value to clients,” said Mr. Staley. “I want to thank all my colleagues at J.P. Morgan, my home for the last 34 years, and I look forward to working with them in the future.”
Foto: BIS photo gallery. Basilea III aprueba un calendario gradual para implantar el ratio de liquidez
The LCR will be introduced as planned on 1 January 2015, but the minimum requirement will begin at 60%, rising in equal annual steps of 10 percentage points to reach 100% on 1 January 2019. This graduated approach is designed to ensure that the LCR can be introduced without disruption to the orderly strengthening of banking systems or the ongoing financing of economic activity.
The Basel Committee has issued the full text of the revised Liquidity Coverage Ratio (LCR) following endorsement on 6 January 2013 by its governing body – the Group of Central Bank Governors and Heads of Supervision (GHOS).
2015
2016
2017
2018
2019
Minimum LCR requirement
60%
70%
80%
90%
100%
The GHOS agreed that, during periods of stress it would be entirely appropriate for banks to use their stock of HQLA, thereby falling below the minimum. Moreover, it is the responsibility of bank supervisors to give guidance on usability according to circumstances.
The GHOS also agreed that, since deposits with central banks are the most – indeed, in some cases, the only – reliable form of liquidity, the interaction between the LCR and the provision of central bank facilities is critically important. The Committee will therefore continue to work on this issue over the course of 2013.
Mervyn King, Chairman of the GHOS and Governor of the Bank of England, said, “The Liquidity Coverage Ratio is a key component of the Basel III framework. The agreement reached today is a very significant achievement. For the first time in regulatory history, we have a truly global minimum standard for bank liquidity. Importantly, introducing a phased timetable for the introduction of the LCR, and reaffirming that a bank’s stock of liquid assets are usable in times of stress, will ensure that the new liquidity standard will in no way hinder the ability of the global banking system to finance a recovery.”
The LCR is an essential component of the Basel III reforms, which are global regulatory standards on bank capital adequacy and liquidity endorsed by the G20 Leaders.
The LCR is one of the Basel Committee’s key reforms to strengthen global capital and liquidity regulations with the goal of promoting a more resilient banking sector. The LCR promotes the short-term resilience of a bank’s liquidity risk profile. It does this by ensuring that a bank has an adequate stock of unencumbered high-quality liquid assets (HQLA) that can be converted into cash easily and immediately in private markets to meet its liquidity needs for a 30 calendar day liquidity stress scenario. It will improve the banking sector’s ability to absorb shocks arising from financial and economic stress, whatever the source, thus reducing the risk of spillover from the financial sector to the real economy.
The LCR was first published in December 2010. At that time, the Basel Committee put in place a rigorous process to review the standard and its implications for financial markets, credit extension and economic growth. It committed to address unintended consequences as necessary.
The revisions to the LCR incorporate amendments to the definition of high-quality liquid assets (HQLA) and net cash outflows. In addition, the Basel Committee has agreed a revised timetable for phase-in of the standard and additional text to give effect to the Committee’s intention for the stock of liquid assets to be used in times of stress. The changes to the definition of the LCR, developed and agreed by the Basel Committee over the past two years, include an expansion in the range of assets eligible as HQLA and some refinements to the assumed inflow and outflow rates to better reflect actual experience in times of stress.
Once the LCR has been fully implemented, its 100% threshold will be a minimum requirement in normal times. During a period of stress, banks would be expected to use their pool of liquid assets, thereby temporarily falling below the minimum requirement. The GHOS agreed that the LCR should be subject to phase-in arrangements which align with those that apply to the Basel III capital adequacy requirements.
Foto: Brian Katt. BofA acuerda pagar 10.300 millones de dólares a Fannie Mae para resolver demandas sobre créditos hipotecarios
Bank of America announced on Monday agreements with Fannie Mae to resolve outstanding and potential repurchase and certain other claims relating to the origination, sale and delivery of substantially all residential mortgage loans originated and sold directly to Fannie Mae from January 1, 2000 through December 31, 2008 by entities related to Countrywide Financial Corporation (legacy Countrywide) and Bank of America, National Association (BANA).
In addition, Bank of America announced that it signed definitive agreements to sell the servicing rights on 2.0 million residential mortgage loans totaling approximately $306 billion, as measured by the aggregate unpaid principal balance (as of November 30, 2012).
“As we enter 2013, we sharpen our focus on serving our three customer groups and helping to move the economy forward,” said Bank of America Chief Executive Officer Brian Moynihan. “Together, these agreements are a significant step in resolving our remaining legacy mortgage issues, further streamlining and simplifying the company and reducing expenses over time.”
Fannie Mae agreements
The agreements with Fannie Mae cover loans with an aggregate original principal balance of approximately $1.4 trillion and an aggregate outstanding principal balance of approximately $300 billion. Unresolved claims by Fannie Mae for alleged breaches of selling representations and warranties with respect to these loans totaled $11.2 billion of unpaid principal balance at September 30, 2012. These agreements extinguish substantially all of those unresolved claims, as well as any future representations and warranties claims associated with loans sold directly to Fannie Mae from January 1, 2000 to December 31, 2008, subject to certain exceptions which Bank of America does not expect to be material.
As part of the agreement to settle representations and warranties claims, Bank of America will make a cash payment to Fannie Mae of $3.6 billion and also repurchase for $6.75 billion certain residential mortgage loans sold to Fannie Mae, which Bank of America has valued at less than the purchase price. These actions are expected to be covered by existing reserves and an additional $2.5 billion (pretax) in representations and warranties provision recorded in the fourth quarter of 2012.
Bank of America also agreed to make a cash payment to Fannie Mae to settle substantially all of Fannie Mae’s outstanding and future claims for compensatory fees arising out of past foreclosure delays. This payment is expected to be covered by existing reserves and an additional provision of $260 million (pretax) recorded in the fourth quarter of 2012.
Together, these actions described above are expected to reduce Bank of America’s pretax income by approximately $2.7 billion in the fourth quarter of 2012.
The Fannie Mae agreement also clarifies the parties’ obligations with respect to mortgage insurance, including by establishing timeframes for certain payments and other actions, as well as parameters for potential bulk settlements and by providing for cooperation in future dealings with mortgage insurers.
Through these actions, Bank of America is addressing substantially all of its remaining exposure to repurchase obligations for residential mortgage loans sold directly to Fannie Mae. After giving effect to the settlement agreements with Fannie Mae announced today, the company expects to reduce the range of possible loss above existing accruals for both GSE and non-GSE representations and warranties exposures to up to $4.0 billion at December 31, 2012, compared to up to $6.0 billion at September 30, 2012.
Sale of mortgage servicing rights
Bank of America also announced that it signed definitive agreements with two different counterparties to sell the servicing rights on certain residential mortgage loans serviced for Fannie Mae, the Federal Home Loan Mortgage Corporation (Freddie Mac), the Government National Mortgage Association (Ginnie Mae), and private label securitizations, with an aggregate unpaid principal balance of approximately $306 billion. Transfers of servicing rights are subject to the approval or consent of certain third parties.
The sales involve approximately 2 million loans currently serviced by Bank of America, including approximately 232,000 loans classified as 60+ day delinquent first mortgage loans.
Prior to the above transactions, the number of loans classified as 60+ day delinquencies was approximately 775,000 loans as of December 31, 2012, down from 936,000 loans at September 30, 2012. Upon completion of these servicing transfer transactions, the number of 60+ day delinquent first mortgage loans serviced by Bank of America is expected to further decline substantially.
The transfers of servicing rights are scheduled to occur in stages over the course of 2013. The transactions are expected to have a benefit over the book value of the mortgage servicing rights of approximately $650 million; about one-half of this amount is expected to be recorded in the fourth quarter of 2012 related to valuation adjustments to the MSR asset, with the balance expected to be recorded in future periods at the time of servicing transfers.
“We are resolving legacy mortgage issues while balancing the needs of our customers, mortgage investors, our shareholders and communities. The sale of mortgage servicing rights to highly rated specialty servicing companies is an important step in that process,” said Ron Sturzenegger, Legacy Asset Servicing executive for Bank of America. “Bank of America will work closely with our customers, buyers and the investors who own the loans to ensure a smooth transition to their new servicer. Importantly, each of these specialty servicers has committed to adhere to the same servicing standards as provided under the National Mortgage Settlement.”
Other items expected to impact fourth-quarter 2012 results
In addition to the mortgage-related items discussed above, Bank of America expects its fourth-quarter 2012 financial results to be negatively impacted by approximately $2.5 billion (pretax) for the independent foreclosure reviews, litigation (primarily mortgage-related), and other mortgage-related matters. Results for the fourth quarter of 2012 are also expected to include approximately $700 million of pretax negative debit valuation adjustments (DVA) and fair value option (FVO) adjustments related to the continued improvement in the company’s credit spreads.
In addition to the net tax benefit of the above items, results are also expected to be positively impacted by a benefit of $1.3 billion, primarily related to an income tax benefit from the recognition of foreign tax credits made available from the restructuring of certain non-U.S. subsidiaries. The aforementioned tax effects have no net impact on regulatory capital during the fourth quarter of 2012.
Taking into account the effects of all the items above, Bank of America expects earnings per share to be modestly positive for the fourth quarter of 2012. Bank of America is scheduled to report fourth-quarter 2012 financial results on January 17, 2013.
Photo: Franzfoto . Calamos Reopens Growth and Income Fund, Global Growth and Income Fund to New Investors
Calamos Investments announces the Calamos Growth and Income Fundand the Calamos Global Growth and Income Fund are reopened to new accounts and new investments as of January 2, 2013.
“We are pleased that the Calamos Growth and Income Fund and Calamos Global Growth and Income Fund are again open to new investors. The Calamos Growth and Income Fund and Calamos Global Growth and Income Fund are actively managed funds that offer upside participation in the equity market with historically less exposure to the downside than equity-only portfolios over full market cycles,” said John P. Calamos, Sr. , Chief Executive Officer and Global Co-Chief Investment Officer of Calamos Investments.
They have demonstrated less volatility over the history of the funds as measured by beta, managing risk and reward over the course of many market cycles
“Since their inceptions, each of these funds has exhibited lower volatility by employing a flexible approach utilizing primarily equity-linked and convertible securities to respond to changing, volatile markets and investment opportunities. Guided by the best interests of our current fund shareholders, Calamos has continued to evaluate market opportunities consistent with each fund’s investment objective and strategy, and to navigate the current equity market volatility based on managing a consistent risk/reward profile. As global economic recovery has continued and equity markets trend up, our team is seeing increased opportunities in the convertible market. The funds’ flexibility to create synthetic convertibles also enhances the opportunity to achieve the funds’ investment objectives. At this time we believe that reopening the funds allows us to seek to take advantage of a broader opportunity set that reflects our top-down macro view going into 2013,” said Calamos.
The Calamos Growth and Income Fund and the Calamos Global Growth and Income Fund have demonstrated less volatility over the history of the funds as measured by beta, managing risk and reward over the course of many market cycles. The funds invest in a combination of instruments, including equity-linked and convertible securities, synthetic convertibles, stocks and fixed income to seek to achieve each fund’s investment objective and risk/reward for current market conditions.
Calamos Investments is a diversified global investment firm offering innovative investment strategies including equity, fixed income, convertible and alternative investments, among others. The firm offers strategies through separately managed portfolios, mutual funds, closed-end funds, private funds and UCITS funds. Clients include major corporations, pension funds, endowments, foundations and individuals. Headquartered in the Chicago metropolitan area, the firm also has offices in London and New York. Calamos serves professional/sophisticated investors around the world through Calamos Global Funds plc (UCITS), distributed by Calamos Investments LLP, London, United Kingdom.
Calamos Investments announces the Calamos Growth and Income Fund and the Calamos Global Growth and Income Fund are reopened to new accounts and new investments as of January 2, 2013.
“We are pleased that the Calamos Growth and Income Fund and Calamos Global Growth and Income Fund are again open to new investors. The Calamos Growth and Income Fund and Calamos Global Growth and Income Fund are actively managed funds that offer upside participation in the equity market with historically less exposure to the downside than equity-only portfolios over full market cycles,” said John P. Calamos, Sr., Chief Executive Officer and Global Co-Chief Investment Officer of Calamos Investments.
They have demonstrated less volatility over the history of the funds as measured by beta, managing risk and reward over the course of many market cycles.
“Since their inceptions, each of these funds has exhibited lower volatility by employing a flexible approach utilizing primarily equity-linked and convertible securities to respond to changing, volatile markets and investment opportunities. Guided by the best interests of our current fund shareholders, Calamos has continued to evaluate market opportunities consistent with each fund’s investment objective and strategy, and to navigate the current equity market volatility based on managing a consistent risk/reward profile. As global economic recovery has continued and equity markets trend up, our team is seeing increased opportunities in the convertible market. The funds’ flexibility to create synthetic convertibles also enhances the opportunity to achieve the funds’ investment objectives. At this time we believe that reopening the funds allows us to seek to take advantage of a broader opportunity set that reflects our top-down macro view going into 2013,” said Calamos.
The Calamos Growth and Income Fund and the Calamos Global Growth and Income Fund have demonstrated less volatility over the history of the funds as measured by beta, managing risk and reward over the course of many market cycles. The funds invest in a combination of instruments, including equity-linked and convertible securities, synthetic convertibles, stocks and fixed income to seek to achieve each fund’s investment objective and risk/reward for current market conditions.
Calamos Investments is a diversified global investment firm offering innovative investment strategies including equity, fixed income, convertible and alternative investments, among others. The firm offers strategies through separately managed portfolios, mutual funds, closed-end funds, private funds and UCITS funds. Clients include major corporations, pension funds, endowments, foundations and individuals. Headquartered in the Chicago metropolitan area, the firm also has offices in London and New York. Calamos serves professional/sophisticated investors around the world through Calamos Global Funds plc (UCITS), distributed by Calamos Investments LLP, London, United Kingdom.
Photo: Sandip Dey, via Wikimedia Commons. Why Do Investors Turn Their Backs on Emerging Markets?
The IMF has projected emerging markets GDP growth at around 5.4% during 2012 and 2013, about 4% higher than the more advanced economies”. Nonetheless, investor money is not pouring into emerging markets. Why are investors turning their back on these economies? … Continuar leyendo
Photo: Sandip Dey, via Wikimedia Commons. Why Do Investors Turn Their Backs on Emerging Markets?
The IMF has projected emerging markets GDP growth at around 5.4% during 2012 and 2013, about 4% higher than the more advanced economies”. Nonetheless, investor money is not pouring into emerging markets. Why are investors turning their back on these economies? … Continuar leyendo
