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Salaries of financial executives and their staff continued to outpace national averages in 2009, and raises were also larger than other white-collar professionals. But the pay of lower level finance professionals outpaced those of CFOs and other senior-level types.
Average annual salaries for financial professionals increased by 2.5 percent in 2009 and were 13 percent above the national average, according to the Association for Financial Professionals' 2010 compensation survey.
But like other workers, CFOs, treasurers and their staff also enjoyed smaller salary growth than what they had been used to. The average salary increase for financial professionals in 2009 was a full percentage point below the average increase reported in 2008. Salaries went up 3.4 percent in 2008 and 4.5 percent in 2007.
The recently enacted financial reform bill addresses most aspects of the financial services industry. But there are still two major areas which still need the attention of lawmakers--government-sponsored enterprises (GSEs) and covered bonds.
Of the two, the most needed reform is that of GSEs, as Hank Paulson brought up in an op-ed to the Washington Post last week.
Call it a victory for the venture capital industry.
Unlike other alternative investment firms such as private equity funds and hedge funds, under the new financial regulation bill venture capital funds are not required to register with the Securities and Exchange Commission if they have at least $150 million under management.
After fits and starts since the European sovereign debt began in April, the primary bond market finally reopened this week, and companies are taking full advantage of it.
Driven by better-than-expected earnings, a speculative-grade default rate that continues to fall and results of European banks stress tests that seem to have contented many investors, companies - both investment grade and high yield -- are jumping at the opportunity to raise fresh debt before the usual late-summer lull in investor interest sets in.
Visa and Mastercard dodged a major bullet as the financial reform signed into law last week didn't regulate debit card network fees, which they collect for each debit card swipe processed through their payment networks. However, the new law will likely reduce debit interchange fees, the fees that merchants pay to banks to process debit card payments from consumers.
As a result, although banks will be negatively impacted by a reduction in debit card fees they receive from merchants, they will also be able to pass on the extra cost to debit card companies and debit card holders.
The main three credit ratings agencies have told Wall Street in recent weeks that underwriters won't be able to use their credit ratings in documents selling asset-backed securities for fear of being sued.
While it has already placed the ABS market on hold and has securitization professionals up in arms, there are several ways for banks to continue to sell ABS going forward.
Private equity deal-making activity may be making a comeback, but the collateralized loan obligation market, which helped fueled the buyout boom prior to the financial crisis, remains sluggish. That suggests we won't see a new LBO boom anytime soon.
PE-sponsored companies last year accounted for 34 percent of distressed exchanges, or so-called "extend and pretend" refinancing, since the deals extend the maturities of high-yield debt that is in technical default without retiring much if any of it. Since these companies were funded mostly with leveraged loans held in CLOs, the exchanges exposed more than 500 CLOs to 96 companies that defaulted in 2009, according to a recent Moody's Investors Service report. That means the CLO market is in no condition to support a new wave of big debt-fueled deals.
The European banks stress tests will be released this week, and while they may slightly bolster confidence among investors, they likely won't fix troubled banks for the long term.
The release on July 23 will focus on 91 banks, with three main groups that are the focus of attention: the German Landesbanks, the Spanish Cajas and the Greek banks.
Federal Reserve Chairman Ben Bernanke asked lenders to ease credit to small businesses earlier this week, but the situation isn't likely to change anytime soon.
With stricter lending standards, small community banks have stopped lending to small companies. Part of the problem is a lack of demand from solid businesses. Most want to save their cash and preserve their credit while there's still uncertainty surrounding the economic recovery.
Venture capital fundraising in the US is at the lowest level in seven years and the likelihood that it will significantly increase in the next few years is slim.
Thirty eight US venture capital funds raised $1.9 billion in the second quarter of 2010, the worst three-month period since the third quarter of 2003, according to Thomson Reuters and the National Venture Capital Association.