{"id":13933,"date":"2016-08-09T20:51:48","date_gmt":"2016-08-10T00:51:48","guid":{"rendered":"http:\/\/goldstocksforex.com\/?p=13933"},"modified":"2016-08-09T20:51:48","modified_gmt":"2016-08-10T00:51:48","slug":"asic-review-of-investment-banks-shows-poor-practice","status":"publish","type":"post","link":"https:\/\/thepatientinvestor.com\/index.php\/2016\/08\/09\/asic-review-of-investment-banks-shows-poor-practice\/","title":{"rendered":"ASIC review of investment banks shows poor practice"},"content":{"rendered":"<p>From Sarah Danckert:<\/p>\n<blockquote><p>The ASIC review of investments banks found that not only do the heavyweights of Australia&#8217;s financial system have difficulty in managing their conflicts of interest they also financially reward staff for potentially conflicted behaviour.<\/p>\n<p><a href=\"http:\/\/www.theage.com.au\/business\/banking-and-finance\/asic-review-of-investment-banks-post-ubsbaird-government-runin-shows-poor-practice-20160809-gqogli.html?promote_channel=edmail&amp;mbnr=MTQyOTU1Nzk\"><img data-recalc-dims=\"1\" decoding=\"async\" class=\"alignnone size-full\" src=\"https:\/\/i0.wp.com\/thepatientinvestor.com\/wp-content\/uploads\/2016\/08\/1470729747047.jpg?w=525&#038;ssl=1\" alt=\"\" \/><\/a><\/p>\n<p>&#8230;..So ugly is the result the Australian Securities and Investments Commission has warned the people often known as the smartest men and women in the room it will take action against the culprits if the poor behaviour continues.<\/p>\n<p>&#8230;&#8230;Managing conflicts of interest are crucial for investment banks because often one part of the bank is advising on an asset sale or an initial public offering while the bank&#8217;s research arm is producing research for the investment banks&#8217; investor clients about the quality of the assets or the IPO.<\/p>\n<p>&#8230;.ASIC said it had also found &#8220;instances of remuneration structures where research remuneration decisions, including discretionary bonuses, took into account research analyst involvement in marketing corporate transactions&#8221;.<\/p>\n<p>The review also found &#8220;instances with mid-sized firms where research reports on a company were authored by the corporate advisory team that advised the company on a capital-raising transaction or had an ongoing corporate advisory mandate&#8221;.<\/p><\/blockquote>\n<p>Results of the review come as no surprise. When there is a conflict between profits with multi-million dollar bonuses and independence the outcome should be obvious.<\/p>\n<p>Having worked in the industry, I believe that the only way to achieve independence is to separate investment banks from research houses, with no financial linkage. A professional body for research houses would ensure independence in much the same way as the auditing profession. There is no better way of enforcing good behavior than the threat of censure from a professional body that has the power to prevent its members from practicing.<\/p>\n<p>Source: <a href=\"http:\/\/www.smh.com.au\/business\/banking-and-finance\/asic-review-of-investment-banks-post-ubsbaird-government-runin-shows-poor-practice-20160809-gqogli.html\">ASIC review of investment banks post UBS-Baird government run-in shows poor practice<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>From Sarah Danckert: The ASIC review of investments banks found that not only do the heavyweights of Australia&#8217;s financial system have difficulty in managing their conflicts of interest they also financially reward staff for potentially conflicted behaviour. &#8230;..So ugly is the result the Australian Securities and Investments Commission has warned the people often known as &hellip; <\/p>\n<p class=\"link-more\"><a href=\"https:\/\/thepatientinvestor.com\/index.php\/2016\/08\/09\/asic-review-of-investment-banks-shows-poor-practice\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;ASIC review of investment banks shows poor practice&#8221;<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[40,31,57],"tags":[],"class_list":["post-13933","post","type-post","status-publish","format-standard","hentry","category-australia-nz-countries-regions","category-the-fed-banks-interest-rates","category-stock-markets"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>ASIC review of investment banks shows poor practice - the patient investor<\/title>\n<meta name=\"robots\" content=\"noindex, follow\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"ASIC review of investment banks shows poor practice - the patient investor\" \/>\n<meta property=\"og:description\" content=\"From Sarah Danckert: The ASIC review of investments banks found that not only do the heavyweights of Australia&#8217;s financial system have difficulty in managing their conflicts of interest they also financially reward staff for potentially conflicted behaviour. &#8230;..So ugly is the result the Australian Securities and Investments Commission has warned the people often known as &hellip; 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It is faced with a decapitated banking industry, which has been far too willing to lend to all kinds of investment projects \u2013 good and bad. At the same time, the Chinese growth model has been\u2026","rel":"","context":"In &quot;Banks &amp; Interest Rates&quot;","block_context":{"text":"Banks &amp; Interest Rates","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/the-fed-banks-interest-rates\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":6691,"url":"https:\/\/thepatientinvestor.com\/index.php\/2013\/02\/12\/a-credit-vigilante-arrives-at-the-fed-gavyn-davies\/","url_meta":{"origin":13933,"position":2},"title":"A credit vigilante arrives at the Fed &#124; Gavyn Davies","author":"Colin Twiggs","date":"February 12, 2013","format":false,"excerpt":"Gavyn Davies at FT writes: [Fed Governor, Professor Jeremy Stein] argues that the credit markets have recently been \u201creaching for yield\u201d, much as they did prior to the financial crash. Although not yet as dangerous as in the period from 2004-2007, this behaviour is shown by the rapid expansion of\u2026","rel":"","context":"In &quot;Banks &amp; Interest Rates&quot;","block_context":{"text":"Banks &amp; Interest Rates","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/the-fed-banks-interest-rates\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":16125,"url":"https:\/\/thepatientinvestor.com\/index.php\/2018\/02\/26\/richard-koo-surviving-in-the-intellectually-bankrupt-monetary-policy-environment\/","url_meta":{"origin":13933,"position":3},"title":"Richard Koo: Surviving in the Intellectually Bankrupt Monetary Policy Environment","author":"Colin Twiggs","date":"February 26, 2018","format":false,"excerpt":"https:\/\/youtu.be\/8YTyJzmiHGk Richard C. Koo, Chief Economist, Nomura Research Institute, at the ACATIS Value Konferenz 2016 in Frankfurt Why QE doesn't work. I have the greatest respect for Richard Koo and his unconventional, balance-sheet-recession approach to economics. It strikes me is that if central banks lower interest rates to stimulate borrowing\u2026","rel":"","context":"In &quot;Banks &amp; Interest Rates&quot;","block_context":{"text":"Banks &amp; Interest Rates","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/the-fed-banks-interest-rates\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/img.youtube.com\/vi\/8YTyJzmiHGk\/0.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":53380,"url":"https:\/\/thepatientinvestor.com\/index.php\/2024\/05\/25\/in-gold-we-trust\/","url_meta":{"origin":13933,"position":4},"title":"In Gold we Trust","author":"Colin Twiggs","date":"May 25, 2024","format":false,"excerpt":"Rising demand for gold and silver reflect the failure of central banks to maintain price stability and efficient functioning of credit markets. Private investor mistrust of fiat currencies was historically an emerging market problem, with countries like India and China holding large private savings in the form of precious metals\u2026","rel":"","context":"In &quot;China &amp; HK&quot;","block_context":{"text":"China &amp; HK","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/countries-regions\/china-hk\/"},"img":{"alt_text":"S&P 500","src":"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2024\/2024-05-24-spx.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2024\/2024-05-24-spx.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2024\/2024-05-24-spx.png?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":22587,"url":"https:\/\/thepatientinvestor.com\/index.php\/2020\/11\/11\/low-interest-rates-no-free-lunch\/","url_meta":{"origin":13933,"position":5},"title":"Low interest rates: No free lunch","author":"Colin Twiggs","date":"November 11, 2020","format":false,"excerpt":"Total assets of commercial banks in the US spiked up by $2.5 trillion (T) in the three months ending April 2020. Since then, total assets have contracted slightly (-$117bn) but, while total assets have hardly changed, this hides some far sharper changes in the composition. Consumers Consumer loans fell sharply\u2026","rel":"","context":"In &quot;Banks &amp; Interest Rates&quot;","block_context":{"text":"Banks &amp; Interest Rates","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/economy\/the-fed-banks-interest-rates\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts\/13933","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/comments?post=13933"}],"version-history":[{"count":0,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts\/13933\/revisions"}],"wp:attachment":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/media?parent=13933"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/categories?post=13933"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/tags?post=13933"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}