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Blain’s Morning Porridge

Macro Daily

“He’s a supersonic scientist, a guaranteed eternal sanctuary man.”

In the headlines this morning:

Its officially: “Take a Pop at Banco Santander Day”!

Yesterday Banco Santander didn’t make an anticipated call an old Euro 1.5 bln Tier 1 Contingent Capital issue. They’ve cited an “obligation to assess the economics and balance the interests of all investors” – which translates as shareholders first. As I’ve said before this week: at Santander you’re either a Botin or a Botone. (As Spanish banking proverb meaning you’re either part of the Botin family or nothing more than a mere servitor like a butler..)

Santander’s call was optional, but not calling it creates potential reputational damage for the bank – according to a slew of press stories this morning. Some say it puts them into a particular Circle of Hell (not the same one as Boris Johnson, Dodgy Davis and Farrage) of bad banks, previously reserved for Deutsche Bank.

I remember that day well.. Back in 2008 Deutsche Bank – then a leading European investment bank, was batting in the big leagues against the Americans, was the place everyone wanted to work for, to be banked by, and to own – decided the deteriorating financial situation meant they would not make the expected call on a Lower Tier 2 capital deal. The market was gob-smacked. They did it again in 2013 – missing a call on a Tier 1 deal, and further peeving investors. Deutsche Bank’s reputation took a massive spanking – I’d argue its current travails and loss of premier status stems from these events. 

Macro Daily

About Bill Blain

Bill Blain

Bill Blain is Strategist for Shard Capital, a leading investment firm. Bill is a well known broadcaster and commentator, with over 30-years experience working for leading investment banks and brokerages at senior levels. He's been closely involved in the growth and development of the global fixed income markets, and pioneered complex financial products including capital, asset-backed securities and private placements. Increasingly, he's involved in the Real and Alternative Assets sector seeking to explain their complexity, how to generate decorrelated returns, and create liquidity in non-listed assets. Bill is a passionate sailor, talentless painter, plays guitar badly, is learning the bagpipes, and built a train-set in his attic.

Articles by Bill Blain

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