Two key terms reigned in 2007 for the securities services industry: consolidation and sub-prime woes. The merger of The Bank of New York and The Mellon Financial Corporation to form The Bank of New York Mellon was perhaps the largest announcement of the year, being finalized on the 1st July. No less important were other mergers and acquisitions, which remained in the news for months during 2007. State Street’s acquisition of Investors Financial Services in February, along with the RBS-Fortis-Santander takeover of ABN AMRO which was accepted in October, also dominated the headlines.
The effects of the sub-prime woes from last year are still seen today at the start of 2008, and the aftershock certainly will be felt for some time to come. The housing market bubble burst at the tail-end of 2006, resulting in unexpectedly high numbers of defaults on sub-prime mortgages, which are lent to high-risk borrowers. Financial institutions and investors in mortgage-backed securities then experienced the repercussions of the market fallout throughout 2007. Total industry losses as a result of the sub-prime crisis are speculated to reach up to $400 billion, as estimated by Deutsche Bank analysts. Officials at several major banks, including most recently William Hunt of State Street, stepped down following massive losses in 2007.
Last year was one of change for Global Custodian as well, both our magazine and especially our Web site. We released five issues of our regular magazine, along with several special publications including most recently the Hedge Fund Black Book. Global Custodian Multimedia was launched in the spring, which now features weekly podcasts highlighting the top securities services news stories and vodcast (video) coverage of industry events and issues. The new GlobalCustodian.com was launched at the start of 2008, which we hope will signal more exciting new features to come for our readers.
Happy New Year from your friends and colleagues at Global Custodian magazine.
Global Custodian magazine