30 July 2018 FT — Articles to Read

30 July 2018


Question: What are the seven types of financial misconduct?


Asset Management – Pg. 7

–          Asset managers play a critical role in the global economy, such as investing the retirement savings of hundreds of millions of workers.  But while their influence has grown, the industry is undergoing profound changes that threaten the way they do business

–          Fees are under pressure as customers move to cheaper products and costs are rising because of new regulatory burdens.

–          ..unlike the largest US managers, which invested heavily in developing passive funds over the past two decades, Europe’s managers have tended to focus on more traditional pricier products such as actively managed funds

–          European asset managers are being forced to pull out of markets and lay off staff

–          M&A strategies have become less about market domination and more about survival

–          One of the main drags has been the continual downward pressure on fees that began in the US and has spared to Europe

–          Over the past two years, the amount of new investor money flowing into passive funds increased their total assets by 19%, while active funds grew by just 1%…

–          Since the financial crisis, the fund industry has been hit by an avanlanche of regulation resulting in increased operational spending

–          Lower fees and higher costs result in squeezed profits


Seven sins of financial world stuck on repeat, study finds – Pg. 16

–          The seven broad types of financial misconduct it identified were: price manipulation, inside information, circular trading, reference price influence, collusion and information sharing, improper order handling and misleading customers

–          In the field of price manipulation, the research found that the media by which false information was published had changed, but the techniques remained the same


US lenders face M&A skepticism – Pg. 16

–          Us regional bankers face rising shareholder disapproval over dealmaking in the sector, clouding the prospects for further consolidation between the country’s 5,600 lenders

–          US bank deals worth $21bn have been announced so far this year….compared with $26bn for the whole of 2017


Answer: (1) Price manipulation, (2) Inside information, (3) Circular Trading, (4) Reference price influence, (5) Collusion and information sharing, (6) Improper ordering handling, and (7) Misleading customers