Economy
Bank of America Corp cuts out the broker middle man |
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| Economy | |
| Written by Roberta Murray | |
| Tuesday, 27 July 2010 | |
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Morning Business News, Tuesday 27 July: Bank of America Corp, Euribor rates creep up, UKFI pay cuts and IBM to be investigated.
Bank of America Corp (NYSE:BAC) has taken steps to cut out the human broker in its electronic ETF offering. Bank of America Corp says it is offering clients an electronic trading strategy that can automatically create shares of exchange-traded funds by buying and selling stocks and hedging with futures. “This is part of the changeover from institutions sending orders to brokers to doing more self-execution,” said Paul Zubulake, a senior analyst at research firm Aite Group in Boston. “More customers are taking execution into their own hands and brokers want to provide tools directly to them.” Commission costs also shrink “when you take a human being out of the equation,” he said. Euribor rates head higher despite stress testsEurope's stress tests for banks have greatly reduced pressure on Spanish lenders but have so far done little to ease broader strains in the interbank credit markets. Three-month Euribor rates have crept up to a one-year high of 0.889pc. The "Libor-OIS spread", watched as a key gauge of stress in the system, also nudged up to 26 basis points, the Telegraph reports. UKFI employees takes pay cutsThe directors of the agency set up to manage the Government's stakes in Britain's part-nationalised banks have agreed to take a 5% pay cut as public-sector spending is slashed. Sir David Cooksey, the chairman of UK Financial Investments (UKFI), said it was focusing hard on cutting its costs, which would be "substantially below" the targets in its business plan, the Independent reports. IBM to be investigatedEU regulators have begun two investigations into IBM, the world's largest computer services firm, following accusations the American company has been abusing its dominant position in the market for mainframe computers. The European market for mainframe computers and softwarewas worth €3bn (£2.5bn) last year, the Guardian reports.
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