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Opinions and views from expert CFOZone members.

Tag >> Risk
Aug 27
2010

Retailers would be hit hard by lease accounting proposals

Posted by Stephen Taub in Riskretailleasinglease accountingFASBCashAccounting

Stephen Taub

The recent joint proposals from FASB and IASB to eventually overhaul lease accounting rules would most impact retailers, according to an in-depth report from Credit Suisse Securities.

The Swiss investment bank estimates off-balance-sheet lease liability for the S&P 500 companies is at least $549 billion. It figures two industry groups--Food & Staples Retailing and Specialty Retail--account for 25 percent of the total.

Aug 25
2010

Ramping up for the next CMBS boom

Posted by mcole in RiskDealscommercial real estateBanks

mcole

The US commercial real estate market continues to struggle but Wall Street is already betting on a resurgence of the commercial mortgage-backed securities market.

US commercial real estate prices declined by 4 percent in June after two months of price increases and are still 41.4 percent below the peak recorded in October 2007, according to data from Moody's Investors Service. Delinquencies on loans in CMBS also continued to rise in July, though at a slower pace, according to Fitch Ratings.

Aug 24
2010

Trups will no longer count as banks' Tier 1 capital

Posted by mcole in Riskhybridsfinancial reformDealsBanksBanking

mcole

The Dodd-Frank financial reform is allowing banks to redeem trust preferred securities at face value for 90 days. So far, large banks haven't used the redemption provision and they may not take the opportunity at all.

The new law is offering this option as trust preferred securities, also called Trups, will no longer qualify as Tier 1 capital. The exclusion will begin in 2013.

Aug 24
2010

The real reason home sales are still slumping

Posted by Stephen Taub in Riskmortgage rateshome buyer tax creditexisting home salesDealsCash

Stephen Taub

Reports that July existing home sales fell to a 15-year low have led pundits to blame the end of the home buyer tax credit.

As a result, spend-aholics want the government to reinstate this so-called stimulus measure. However, this would do little to help the housing industry.

Aug 23
2010

Banks reduce Level 3 assets

Posted by mcole in securitizationRiskfair valueBanksBanking

mcole

Large US banks have reduced hard-to-value Level 3 assets since the beginning of the year, according to quarterly filings, but it doesn't mean their balance sheets are in better shape.

The decline was modest for some banks, especially compared with the sharp improvement in 2009 when banks raised equity and reduced leverage. In addition, the recent requirements to consolidate off-balance sheet vehicles helped remove some assets from the Level 3 bucket--but only to reclassify them under different categories on balance sheets.

Aug 20
2010

More trouble for banks

Posted by Ron F in Supreme CourtsecuritizationRiskmortgagesmortgage foreclosuresloan lossescomplianceCitigroupCitiCaliforniaBanksBanking

Ron F

This trend has now reached California, so it's about to become a whole lot more meaningful.

Again, this may be a matter of paperwork, but at minimum, it seems like banks will have to spend time and money straightening out their claims to homes on loans they've securitized.

Aug 19
2010

A better way to boost demand

Posted by Ron F in Riskrecoveryrecessionfinancial market reformfinancial crisisFederal ReserveFedeconomycareer advancementbubblesBanksbank lending

Ron F

Bear with me here. This is going to be one of those "out there" posts. But Steve Randy Waldman takes an interesting stab at a problem I've been wrestling with, at least in the furthest reaches of the financial corner of my brain, since the financial crisis began.

And that is how to stimulate the economy without creating another asset bubble. It sounds easy enough to the Keynesians, but as Waldman has pointed out before, rebooting aggregate demand through traditional government action may simply create another bubble. And ultimately, the distinction between monetary and fiscal policy may be moot.

Aug 18
2010

Why regulators shouldn't listen to economists

Posted by Ron F in RiskRegulationNew York Fedfinancial crisisFederal ReserveFedcomplianceBanksbanking reformBankingbank failures

Ron F

This brouhaha over the Boston Fed's rationalization for missing the housing bubble reminds me of a conversation I overheard a few weeks ago between a former Federal Reserve bank supervisor and his counterpart at the New York Fed.

I can't give you their names since they were conversing privately a few feet away from me before the start of a conference on financial regulation (nor can I give you the name of the confab since that would give their identities away), and I just managed to overhear the exchange.

Aug 18
2010

Wal-Mart waffles on apparel-buying

Posted by mcole in Wal-MartRiskretaillayoffsjobsDealsCareers/Management

mcole

Wal-Mart Stores may be moving its apparel-buying operations back to the company's headquarters in Bentonville, Arkansas, only a year and a half after consolidating them to New York, according to a source who wished to remain anonymous.

The decision to move to New York, announced in February 2009, was a painful one for employees. Some 700 to 800 workers at Wal-Mart's corporate headquarters were terminated as a result and the decision to move back may produce more casualties in New York this time.

Aug 16
2010

Apple supply manager faces fraud, money-laundering charges

Posted by dbedell in Riskfraudforeign corrupt practices actCareers/ManagementAppleanti money laundering

dbedell

Apple is the latest company to feel the sting of corruption. A supply manager in Asia, Paul Devine, was arrested on Friday for giving Apple suppliers in the region confidential company information to help them win favorable contracts. Devine received more than $1 million in kickbacks from the companies involved.

The mid-level manager is in the custody of the US marshals and will appear in the US District Court in San Jose, California, Monday to face 23 counts of wire fraud and money laundering. According to the indictment, Devine allegedly used a chain of US and foreign bank accounts and a front company for receiving payments.

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