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Barbican Consulting Blog
Bank multipliers
January 19th, 2017
US bank stocks are indicating that the new administration may scale back the regulatory onslaught that followed 2008. Could this make Bank capital requirements less restrictive? It could. Other countries would need to follow suit or be at a competitive disadvantage. Whether you think this is good news depends on your views. On balance some […]
Let’s be clear
December 15th, 2016
What do the following two examples have in common? Example 1: If a 25-year-old saves £1,000 for retirement in 40 years’ time how much will they have? That depends on the rate of return. Using a 5% rate (realistic in current conditions) the amount is £7,040. A fund manager who charges 1% reduces this to […]
Man meets machine
November 19th, 2016
If you have tried any of the following you could be in for a nasty surprise. Things are not as smooth as advertised. Opening an account Moving money Altering an asset manager Changing details The list goes on…… With the aid of technology they should all be simple and seamless but you end up doing […]
A political measure
October 24th, 2016
Just before the big vote few people expected the UK to opt out of the EU. If you believe that markets are, by and large efficient, the small risk of Brexit was priced in albeit with a low probability. However because of a yes/no decision the unexpected vote makes larger waves. Something traders call gamma […]
Carry on
September 20th, 2016
Traders know that being long means when the market goes up or sideways they win. This forms the basis for carry trades. That’s winning two times out of three. The edge comes from the asset’s income exceeding the cost of financing. Short sellers have a harder time. The cost of borrowing can be hugely expensive. […]
Review time
August 31st, 2016
Back in 1997 Gordon Brown announced that the Bank of England would have freedom to control monetary policy. It was heralded as a move away from short term political interference towards a long term framework of prosperity. Does this need rethinking? In this country the elected government has two economic levers, fiscal and monetary policy. […]
FX – more than a rate
July 31st, 2016
Many banks completely avoid foreign exchange risk. They borrow and lend in the same currency. Any customer trades are immediately offset. Bigger players use spot, forward and options markets. But an underlying theme of monitoring and managing exposures overrides. For small businesses things can be different. FX mismatches don’t always get priority. With the recent […]
Cash vs shares
June 26th, 2016
Paul Lewis in an article in the FT on 18/6/16 (Cash v stocks: the winner may surprise you) has uncovered something that people need to be aware of. The fund management industry attracts savings in the form of ISAs and pensions on the basis that it can outperform. But does it offer the saver any […]
Operational risk & common sense
May 19th, 2016
People, systems and external events all generate operational risk. In the words of one Rogue trader “It’s sure to go up, trust me.” Whilst we’ve been focused on solvency and liquidity this just quietly ticks away – a sort of Cinderella of risk that from time-to-time bites. It makes you ask the question “just why […]
Fact or fiction?
April 21st, 2016
Forward looking projections ask us to look into the future. Their uses are varied and range from planning and risk to investment and speculation. We try to eliminate guesswork by using a model. It contains the inputs and algorithms to provide answers. Subjectivity often abounds. The inputs are frequently estimates they include correlations and behaviour. […]