NEWSLETTER of January 10, 2020

The following content has been added at finexpert:

Oliver Wyman

DIE BANKFILIALE DER ZUKUNFT

Over the past decade, the German banking landscape has been characterised by a veritable "branch death", with numerous traditional banks significantly reducing their physical presence. Between 2008 and 2018, for example, Germany lost almost a third of its branch locations with the loss of around 12,000 branches. This corresponds to a loss of a good 1,200 branches per year. In order to maintain their competitiveness, banks are being forced to completely realign their current branch strategy. It must be intelligently integrated into the channel mix of a valuable local presence and efficient online activities. >more

Deloitte

2020 INVESTMENT MANAGEMENT OUTLOOK

The changes facing many investment management firms are significant. Internally, long-standing operating models may need transformation to keep up with the competition, and digital-enabled customization is becoming a client expectation. Seeking growth in an increasingly dynamic and complex industry landscape, investment management firms may need to leave comfort zones behind to explore new or different avenues next year. >more

Mergermarket

RISK IN REVIEW 2019: EMEA

After a half-decade of steady growth, markets in Europe, the Middle East and Africa (EMEA) are beginning to face significant headwinds. Geopolitical and macroeconomic uncertainty, rising populism and volatile stock markets have all weighed on dealmaker confidence. Yet despite the drop in mergers and acquisitions and a difficult deal backdrop, demand for deal-related M&A solutions – particularly, warranty & indemnity (referred to as representations & warranties in the Americas), tax and contingent risk insurance – has remained resilient. >more

Bank for International Settlements

BIS QUARTERLY REVIEW: DECEMBER 2019

The previous quarter saw financial markets torn between two forces: trade tensions pushed them down; monetary policy easing pushed them up. During the latest one, it was the ebb and flow of trade tensions that dominated. To be sure, further monetary easing continued to support risky assets, and so did signs later in the period that recession concerns might have been overdone. But it was the easing of trade tensions between the United States and China in mid-October that defined a regime shift in markets. >more

DO CORPORATE GOVERNANCE RATINGS CHANGE INVESTOR EXPECTATIONS? EVIDENCE FROM ANNOUNCEMENTS BY INSTITUTIONAL SHAREHOLDER SERVICES

Paul M. Guest, and Marco Nerino
2019
This paper examines empirically the announcement effect of commercial corporate governance ratings on share returns. Rating downgrades by Institutional Shareholder Services (ISS) are associated with negative returns of –1.14% over a 3-day announcement window. The returns are highly correlated with the proprietary analysis of ISS and are decreasing in agency costs, consistent with ratings providing independent information on underlying corporate governance quality. We thus show that the influence and impact of ISS extends beyond proxy recommendations and subsequent voting outcomes. Our findings contrast with the insignificant price impact of Daines, Gow, and Larcker (2010), whose analysis we replicate and successfully reconcile to ours by pooling upgrades and downgrades together. >more

INSIDE THE 'BLACK BOX' OF PRIVATE MERGER NEGOTIATIONS

Tingting Liu, and Micah S. Officer
2019
This paper enables a detailed look inside the “black box” of merger and acquisition (M&A) negotiations before the first public bid is announced. We find that bid revisions are very common in the pre-public phase of a deal, and that price revisions during the private negotiation window are associated with changes in the public-market values of the acquisition target. We further find that target firms’ earnings releases during the private negotiation process have a significant impact on bid revisions. We also investigate whether the nature of the bid process has an impact on pre-public takeover price revisions and examine the strategic difference in bidding in deals that are initiated privately by a bidder other than the winning bidder. We interpret our results as consistent with the notion that the behavior of target managers in the private negotiation window appears congruent with shareholder wealth maximization. >more