Peter Kurer, chairman, UBS
Updated, 12:25
Basel, Switzerland (GenevaLunch) - Shares in UBS rose 7% when the market opened in Zurich this morning, folowing an announcement by UBS that it expects to have a small profit for the third quarter of 2008 and to be profitable for the whole of 2009.
The US Federal Reserve will regulate Goldman Sachs and Morgan Stanley in the future, which have applied to become holding companies, requiring capital reserves as the Fed does for US banks. Their applications go into effect after a five-day waiting period and “spells the end of the investment banking industry as a separate sector, leaving behind only small boutique securities firms. In doing so it ends the decades old division of the US financial industry into two halves, which dates back to legislation passed after the Great Depression,” writes Krishna Guha in the Financial Times, International Herald Tribune
Mega-investor Warren Buffett five years ago warned that financial derivatives were a “time bomb” waiting to go off and he ordered the insurance branch of his company, Berkshire Hathaway, to get out of the business, reports Reuters. The original story: BBC, March 2003, Buffett told Fortune magazine that such contracts were devised by “madmen.” Commentary, 16 September, Bloomberg
Barclays Bank has agreed to pay $1.75 billion for Lehman Brothers North American investment banking business. Lehman filed for bankrupty on Monday after Barclays said it would not buy the entire operation.
Lehman Bros. announced a loss of $3.9 billion for the third quarter of 2008, its worst-ever quarterly loss, and announced plans to “shrink its business to a smaller, less risky, core,” reports the Financial Times. The company’s talks with Korea Development Bank to buy a large stake in the company fell through Wednesday and the 158-year-old bank is scrambling to find buyers for some of its assets, including a large part of its “prized” asset management unit, according to the FT.
