Do not rely on Regulation!

Regulators are beholden to to politicians who in turn are beholden to the industries they are supposed to regulate. Banking regulations were loosened substantially in the United States towards the end of the last decade. The current crisis of confidence is to a large extent due to wrong policies pursued by regulators and the Federal Reserve Bank. The situation in the Eurozone and the UK is not much better. 

Lesson for all Investors: diversify your banking relationship and if possible invest in assets that are not dependent on a healthy bank.

Private Banking Advisory is happy to analyse risks contained in your investment holdings.

How Silicon Valley Bank skirted Washington's toughest banking rules

Beware of Financial Engineering!

When Times are good it is easy to forget Warren Buffett's famous dictum: "Derivatives are weapons of mass destruction". Recent turmoil in the UK Gilts market demonstrated that Financial Engineering (better called alchemy) has its limitations. And how much did the Pension trustees really understand when LDI was proposed as the magic solution? It just shows that the Quality of your Advisers is crucial for Investment success.

Bitcoin: The drumbeat goes on

The drumbeat goes on, any number of self-appointed 'experts'  push bitcoin etal, still not clear what 'value' it has or provides, just question of time that regulators impose restrictions, to market, buy/sell it through traditional banking channels unless full 'know your customer' disclosure is made. and who REALLY needs bitcoins, internet banking is so efficient already! Price easily manipulated due to complete lack of transparency, and who are the idiots that pay $10,000 for a bit with REAL money?
Here's why not to put your money into bitcoin (Evening Standard)

Bitcoin: What is the Value of Hot Air?

Let self-interested promoters and their acolytes in the Media invest their hard-earned savings in a bit of (hot) air, or better: some digits in a far-away computer that nobody controls. Shares (hopefully) pay dividends, bonds pay interest, land can be rented out, but bitcoins and the like? Nothing but the hope of finding a Greater Fool down the road.
And Bitstamp, a 'digital currency exchange', should it not be banned from calling itself as an exchange by the SEC and fellow regulators? No surprise that its chairman sings the praises of 'crypto' 'currencies' (their are neither crypto nor currencies, you might as well start paying your groceries with some rare shells)
CNBC

Bitcoin etc - easy to manipulate price, regulators asleep

No mystery, no one can really say how the prices of bitcoin etal are established. Who buys, sells? Can it be manipulated? Is it manipulated? Especially all over Asia the 'new capitalists' are playing with numbers that defy the imagination of people who grew up in established market economies, warts and all. How much does it take to push the prices around? 10 million, 100, 500? No problem for the new Oligarchs! And they know there is a sucker born every minute (second more likely).

Bitcoin Hype - Regulators asleep or afraid?

Given the thousands of pages of detailed regulation that has been produced in all major industrial countries one has to wonder why the Regulators are keeping stumm about the Bitcoin craze. Claims that Digital 'Currencies' are clearly misleading. Neither are they a safe haven, they are digital assets and given the way they are offered and promoted they are investments and as such should be brought under regulatory umbrellas.
The price of Bitcoin and Ethereum is slipping but Bitcoin Cash is rising

HSBC wants more information from you

Big Banks are turning quickly into Big Brother! Arbitrary punishments are meted out from politicized regulators and greedy jurisdictions (led by the USA where judicial positions are used by ambitious individuals to promote their personal - often political - career, then to switch into highly-paid jobs with the firms they regulated). The cause of misdeeds are in the meantime not addressed - fraud, illegal activities (often again activities that are MADE illegal by legislative fiat, e.g. prostitution, poor or oppressive tax laws, anti-tobacco campaigns, poorly-thought out subsidies or tariffs, anti-drug fanaticism).
The end-effect will be that more and more people will bypass traditional banks, payment systems, possibly reduced their economic activity, esp in the better-earning strata of the population, thus making economies less efficient and more stagnant. All this by administrative fiat without any democratic legitimacy!
Big Banks are turning into Big Brother!

More Air than Value? Airbnb Raises $1B At $31B Valuation

Remember, the rulebooks that the Regulators publish get longer and longer but none of the rules cover the real important challenges investors face, like buying and selling at the right price
Airbnb Raises $1B At $31B Valuation, Likely Delaying IPO Plans Further

More important than ever that YOU monitor Advisers

Relying on good faith or protection by regulators is not going to do the job in the future!

Trump firing of Bharara leaves void in fight against corruption and Wall Street crime

Chinese Shares - ready for Mum and Dad?

News that a commercially-driven entity may decide how billions of investor's savings are deployed in the fast-growing Chinese Equity markets should set alarm bells ringing. After all, China is still in the grip of a communist dictatorship. Recent economic growth may well be impressive - unless you are belonging to the millions who have been pushed out of employment by cheap Chinese labor - but that should not mean that question of morality and fair play are forgotten in order to lure investors into a market that is anything but transparent - at least not as far as 'Western' Investors and Savers are concerned. Allowing index designers free reign over the fate of our Savings is totally irresponsible.
China's A-Shares Prepare to Flood Your ETFs (Barron's)

Private Equity fees a 'Trade Secret'?

Given the fact that all investment funds that are offered to the Public are regulated in one way or another is should be noted that one important aspect escapes the attention of the (usually overzealous) regulators. When it comes to the transparent disclosure of management and performance fees the end investor is usually left in the dark. His fiduciaries in the pension funds, private banks or other intermediaries may be able to dig deep into the agreements with the private equity operators but when the end investor - who ultimately bears all the risk - wants to have the full picture he is usually fobbed off with lame excuses (protection of 'trade secrets' one of the more popular ones).

Private Equity getting less 'Private'

I always argued that Private Equity was anything but private. The funds were managed on behalf of the Public who was invested in the funds via fiduciaries in the large pension funds, insurance companies and private banks. That the industry is only now paid more attention (Enter the Secret Garden of Private Equity, NY Times) by the regulators is indicative of the fact that no investor should ever rely on bureaucrats to protect his interests. So the blame should really be laid at the door of the supposed 'fiduciaries' who were - and to a large extent - still are asleep on the watch. Should they not have long ago raised all the points about expenses, fees, performance calculations, conflicts of interest etc.?

Is my Adviser 'Independent' or 'Restricted'?

That is the question investors in the UK must ask themselves since advisers were banned from receiving commission for selling products at the beginning of 2013. While this reform (known as Retail Distribution Review) may help investors understand how much they pay for financial advice the changes can be confusing for customers that do not spend their whole time studying the intricacies of new regulations that even market professionals and their lawyers find difficult to interpret. One could also ask why reforms that are supposed to be beneficial for British investors are not also introduced in other jurisdictions.

CoCo's are NoNo's

One would have thought that the main lesson of the Credit Crunch and Financial/Economic Crisis is the danger that can be created by newfangled and little-understood financial 'innovations'. The need for banks to raise additional capital has led to the design of 'Contingent Convertible Bonds' (CoCo's for short). These bonds lure investors with relatively high nominal interest rates that make them appear attractive to those who are desperate to get some positive return on their investments. Even so-called sophisticated investors in large financial institutions get tempted. Partially because they do not play with their own money or they will long have moved on to other jobs or positions when the proverbial s*** hits the fan. They may also not be as sophisticated as their clients (pensioners, mutual fund savers and private clients) assume. It will be interesting to see how regulators treat these securities if they become more of a mainstream investment option. They will have to decide whether their role is to protect the banking establishment or the investors. We know on which side they should be and we are definitely siding with the investors on this issue. Dangerous bets such as CoCo bonds should not be in any investor's toolkit but should be strictly reserved for regular visitors to casinos and betting shops. Not for nothing the link above talks of a ticking time-bomb with respect to these securities.

10 things you should ask your financial adviser about
(MarketWatch)

Do not be taken in by fancy offices, glossy brochures or even by the centuries-old pedigree of an investment management company. If you are not sure how to protect your interests in the face of a slick and professional marketing machine you should consider taking impartial advice. And do not even think to rely on regulators - just never forget Cyprus and the fact that EU regulators were powerless (unwilling?) to help depositors in some of the country's banks.

A significant cause of damage for investors

Says article (Financial Times, 18 March 2013) that deals with another mysterious and opaque way that providers of investment services can use to fatten their profit at the expense of their 'clients'. How many investors will know the difference between 'creation' and 'cancellation' prices for their investment funds? But technicalities such as these can make quite a difference and sharp practices should be banned. In the absence of legislation investors are well advised to consult experts that can help them safeguard their hard-earned cash.

Honest Rating Agency punished by regulators

It is possible that rating agency Egan-Jones has not followed regulatory guidelines (themselves of questionable value) but to be banned from a large sector of the market for what is the equivalent of a parking offence seems to go to far - even if one never can underestimate the deviousness of regulators and the financial establishment that seems to dictate its actions. So readers are warned if they think that bond ratings  are anything they should pay attention to.

EU Banking 'Union' threatens your Savings

The proposed EU Banking 'Union' which would centralise the regulation and supervision of banks in the EU (or at the very least in the member states of the Euro zone) would be a threat to the savers in the countries with more stable financial systems. The guarantee of banking deposits would also be administered on a centralised basis. This could lead to the situation were the savings of citizens in, say, Germany or Austria, are used to bail out savers in banks in Spain or Italy.

Another Warning about the safety of your assets

Most investors are unaware of the arcane details of bankruptcy law and related aspects of investor protection. But this warning illustrates that politicians and regulators seem to be less concerned with the well-being of investors and have decided to focus on the interests of the finance lobby.

Even arbitration no protection for investors

This case demonstrates that investors should not rely on securities arbitration for his protection as providers of financial services use every legal option to delay or void such an award. The reader can form his own judgement about the morality of such conduct.