It's no secret that traditional private equity firms have been hell-bent on diversifying over the last few years -- with good reason. At this point, even referring to the likes of Blackstone and KKR as private equity companies seems a little off. Alternative asset manager may be more accurate, though it lacks pizazz.
The market structure debate has been vexing for many, none more so than the traditional exchanges, notably the NYSE and Nasdaq. They of course have seen their market share wither in the face of broker-owned dark pools, the very brokers that are regulated by the exchange SROs. A frustrating status quo indeed.
Reference data is not the most exciting topic of conversation, but for many firms, it is one of their biggest back office headaches. Firms across the industry struggle with data inconsistency and the inability of system to share data seamlessly.
A lack of financial IT talent has long been an issue in the financial services industry, which has high standards. The latest concern: data scientists. At this year's SIBOS, this emerged as a big theme. Speakers "repeatedly mentioned that finding workers with big data skills was difficult and that finding data scientists — quants who can manipulate vast amounts of data — was even harder," noted Wall Street & Technology.
When asked about recent industry glitches while speaking at a Barclays Global conference in New York earlier this month, NASDAQ CFO Lee Shavel basically called them an unwanted side effect of today's frenetic market. "These situations, I don't think we will ever eliminate them, but we can make sure systems are resilient enough to recover from them," he said.
The New York Times recounts a recent JPMorgan board meeting to approve more than $1 billion in settlements. "High above Park Avenue, in a 50th-floor conference room overlooking Central Park, JPMorgan's board members had a pressing question about regulatory problems that have dogged the bank for more than a year: are we done yet?" The answer unfortunately was no, and that presents some tricky issues for the 10-person board, which can ill afford to remain on the sidelines as all this plays out.
The SEC generated lots of favorable news when it asked that exchanges provide rule amendments to implement kill switches, which would shut down trading in the face of technological problems. That was a can't-miss sort of recommendation, one that goes down well with the public and politicians as well as the industry. The kill switch concept is hardly new, and exchanges likely have a good idea how to do this.
There has been a lot of analysis of the post-Lehman world this week as we passed the five year anniversary of that firm's demise. I completely understand the party-poopers who complain that Lehman wasn't the lynchpin of the financial crisis and shouldn't be celebrated as such. Fannie Mae and Freddie Mac were in receivership. Subprime mortgage lenders were imploding. There was a lot going on.
The financial crisis and its regulatory aftermath proved to be a solid business opportunity for a group of consulting firms that have risen to help banks with their compliance needs. The like of Promontory Financial Group, Rust Consulting, PricewaterhouseCoopers, Deloitte & Touche and others flew under the radar for many years. But just recently, they have found themselves in a harsh spotlight, as more people awoke to some big issues involving these "shadow regulators."