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Financial Blog

Banking liquidity reaches neutral zone

According to analysts, the improved liquidity will also aid at the time of maturity of foreign currency non-resident (bank) or FCNR (B) deposits, when banking system liquidity is expected to get strained.


One of the Highest Paid Execs in Banking Is Not Even a Banker

Eugene Ludwig can likely now afford that addition to his house. Or perhaps a heli-pad or two.

Ludwig is one of the best paid banking executives in the industry. He made more than $30 million as of 2013. Thats more than JP Morgan Chase jpm CEO Jamie Dimon, and more than the CEOs of U.S Bank usb , the No. 5 largest bank in the nation by assets; PNC Financial pnc ; and Suntrust Bank sti combined.

Yet Ludwig isnt a banker. He used to be a top regulator, but he isnt even that anymore. Instead, Ludwig runs a consulting firm that advises the nations banks on regulations. One of its offerings: helping the big banks pass the Feds stress test.

On Wednesday, the Federal Reserve released the results of the final round of this years bank stress tests, regulators best guess of whether a bank could survive another financial crisis. If the big banks pass, they are allowed to pay dividends, do stock buy backs, and other things that could boost the price of their shares; and, by extension, they can increase the compensation of their employees.

The Fed began to release results of its stress tests shortly after the financial crisis. And it began annual stress testing in 2012. An industry has grown up around the tests to advise banks on how to get a passing grade. Last week, the Fed released the results of the first half of the test. Like last year, for the second year in a row, every bank passed the first leg. And this year, most banks fared better than last year.

That could be in part because of the work of Ludwig and his firm Promontory Group. In all, banks spent $29 billion on consulting services last year. That was up from just over $16 billion in 2007, before the financial crisis. Not all of that is going toward stress testing. Banks have upped the amount of money they spend on complying with the increased regulations that have come with Dodd-Frank.

But because of the importance of the stress test, banks are likely spending a lot on preparation. And a good deal of that increasing pile is flowing to Promontory, the largest firm that specializes in bank consulting services. Other players in the stress testing consulting business are the big accounting firms and some much smaller consulting firms. On top of that, a number of conferences have popped up each year that focus on how banks can deal with stress testing, and do better on the test. One such conference is run by the Boston branch of the Fed.

All of this has been good for Promontory and Ludwig. The uber bank consultant, who is a regular at some of the biggest banking conferences, owns a 13,000-square-foot Washington mansion. The value of Ludwigs home was estimated at $11.5 million three years ago. His estate also includes a tennis court and a modern art collection. Promontorys website has a page dedicated to stress testing. It says the company assists firms in meeting supervisory expectations for a Capital Adequacy Process, including interpretation of specific feedback from supervisors and in developing remediation plans to address supervisory concerns.

A spokesperson from Promontory declined to comment for this article.

Promontory has attracted a number of former top regulators, including Mary Schapiro, the former head of the SEC, after she left office. Schapiro has since left the firm. Last year, Promontory paid a $15 million fine to the state of New York to settle charges that it put its own interests before obligations it had to regulators in a consulting assignment it was completing for British bank Standard Chartered.



Congressman: Vote against pot banking? Get a tattoo of slain security guard's name

As the House once again votes against allowing marijuana dispensaries to have access to banking, a congressman wants his colleagues to remember that cash-rich dispensaries can be targets, just like Green Heart in Aurora, Colo., was when security guard Travis Mason was shot and killed during a robbery attempt. (Helen H. Richardson, The Denver Post)


11 ways to get a banking job in Asia post-Brexit

As banks in London and Europe grapple with the fallout from Brexit, Hong Kong and Singapore are suddenly looking like more attractive locations to work in.

But while headhunters in the two cities are fielding more calls from London finance professionals, demand for their talents remains fairly weak and limited to certain (mainly middle-office) job sectors.

If you're a candidate from London - or any Western finance centre - your job search in Asia is likely to be challenging. This is what you need to do to get an edge on the competition.

1. Move internally

Try to move with your current firm. If you're an overseas candidate and an unknown quantity, you present two sets of risk to a bank. "I moved regions because I was with the same bank. Going to Asia with a new employer, who is flooded with resumes of people with direct experience in the region, is a long shot," says fintech CEO Tanmai Sharma, who previously relocated to Singapore with Deutsche Bank.

2. Build support in your bank

"I managed to move to Hong Kong eight years ago, two months after Bear Stearns declared bankruptcy - it was chaotic, similar to this post-Brexit situation," says Laurence Fauchon, a former quant BNP Paribas who now runs a domestic helper website. "But I'd already wanted to move, so I'd already networked internally - my team head convinced senior management in Hong Kong to open a new headcount. Be aware of the needs of your department, so you can network with the relevant people and be the first to apply for an Asian position."

3. Get involved in international projects

Foreigners who get jobs in Asia usually show "a genuine interest in international business and cultures", says Russell Graham, a former Singapore-based head of solution delivery at Standard Chartered, now a partner at banking consultancy SkyTxB. "This means more than watching CNN or 'travelling extensively for vacation' - it means understanding your bank's international capabilities; engaging in any cross-cultural forums at your bank; and volunteering for short-term overseas assignments."

4. Don't attempt a career change

Foreign candidates are typically hired into Asia to immediately plug skill shortages, not so they can make career changes that require banks to train them. "Make sure you're eyeing a role where you have previous experience and relevant skills," says Aditya Haripurkar, who moved to Singapore in 2007 to join Barclays and is now an entrepreneur. "Looking at your CV, the hiring manager should have no doubt on your competency for the role."

5. Go there and meet recruiters

If a job in Asia isn't opening up at your bank, you should head out there to see recruiters. "This shows a good level of commitment to the move," says a senior HR manager at a global bank in Singapore. "Meet with three or four recruitment consultants - don't overdo it - who specialise in your area. And if possible, also meet with internal recruiters at the banks, and friends and ex-colleagues who work in Asia. You'll make a more memorable impression by networking face to face."

6. Don't spread your net too wide

Your initial trip to Asia might not be very long, so make the most of it. "Have a focused networking approach," says Haripurkar. "Don’t waste time networking at generic meetups; select the events where you'll meet people who might actually help you secure a job in your field. If you're in asset management, for example, attend a CFA event."

7. Talk up your achievements

"If you get a job interview in Asia, be slightly more confident about your achievements than you would in the West," says Henry Chamberlain, a Hong Kong industrial psychologist and former head of selection at Standard Chartered. "In Hong Kong we don't love you until we know you, so sell yourself and your talents. But don't be over confident. Tell us what you know, but also tell us how that's relevant to the local market."

8. Talk like a local

Whatever else you do in an interview, make sure your answers demonstrate some personal and professional knowledge of Asia and a long-term commitment to staying there. "Read the local press and speak to people you know who live there.  Even the smallest anecdote about Singapore or Hong Kong could add value in an interview," says Nick Wells, a partner at headhunters Alicorn Chase in Singapore.

9. Be flexible over pay and benefits

If you're on a verge of a job offer in Asia don't put it at risk by negotiating too strongly. While most banks will give you a one-off relocation deal (flights, a short-term serviced apartment and shipping of household goods), don't insist on one. An 'expat package' (ie rent and school fees) is out of the question. "Be flexible if you want a banking job in Asia," says the HR manager. "Even if you're getting about the same net income as at home, you’ll be gaining valuable work and life experience."

10. Get set to go

If a bank in Asia wants to make a costly and risky overseas hire, the role may well be one that needs filling urgently. "Be ready to move on a month's notice," says the HR manager. "If you ask for two or three months you could actually kill the deal. Even if this means you fly out here first and your partner follows later, being ready to go on short notice is key to being considered alongside local candidates."

11. Do it yourself

Struggling to find a banking job in Asia? Start up a company instead. "Asia, in particular Singapore, is a great place to do this, says Dominic Gamble, a former Deutsche Bank banker who now runs fintech firm wealthinasia.com. "The entrepreneur community here is multinational and has government backing. Singapore is particularly good for fintech, biotech and consumer tech start-ups."

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