Welcome to the Morning Meeting, a look at some must-read news on deals and deal makers.
Canadian banks could get more wiggle room soon
Julie Dickson, Canada's Superintendent of Financial Institutions, signalled in an interview with The Globe and Mail on Tuesday that the country's banks might get more freedom regarding capital ratios if talks in Basel, Switzerland, this weekend go well. Before the crisis hit, banks had to hold 4 per cent of Tier 1 capital, but OSFI required 7 per cent and the Big Six are now voluntarily well into double digit percentages.
While capital ratios are extremely important -- they provide a safety cushion when markets turn sour -- everyone has their eye on them now because of what they could mean for Canadian bank dividends. Most Big Six CEOs have said they can't act on dividend hikes until they get clarity from OSFI. Now it looks like that this clarity could come sooner than expected.
Should the banks have a bit more freedom to pay out earnings to shareholders, National Bank of Canada seems likely to be the first to hike its dividend.
Toronto to open global risk management institute
A new global risk management institute is set to open in Toronto, the result of a joint effort between government bodies at the federal, provincial, and municipal levels, as well as banks, insurers and pension funds who have been pushing for one to help make Toronto a top 10 financial centre. Canadians say it makes sense to build the institute here, given that the country's banks withstood the crisis without any government money. The proposed organization will study, promote and advance the best risk management practices through research and education.
Potash Corp. insists a rival bid is coming
Bill Doyle, the chief executive officer of Potash Corp. of Saskatchewan Inc. , took to the Internet Tuesday and posted a video in which he claimed BHP Billiton Ltd. "will not be the only bidder." It's a risky move because it creates expectations, and shareholders won't be happy if another bidder doesn't enter the fray. Should Mr. Doyle's words prove to be true, however, it could create a bidding war for the potash producer.
Rumours swirl about U.K. banks relocating head offices
After Tuesday's surprise announcements about executive changes at Barclay's PLC and HSBC Holdings PLC, the FT reports there's a possibility U.K. banks could move their head offices (perhaps to New York for Barclays and Hong Kong for HSBC). Not only did the management changes shock investors, but the U.K. government is also opening an inquiry into whether or not big banks should be broken up.
Ousted AIG chief takes executive role at Willis Group
Martin Sullivan was removed from his role as chief executive officer of American International Group just three months before the U.S. government stepped in to save the world's largest insurer. Now he's returning to the industry as deputy chairman of Willis Group, a leading broker, and will head a new unit created to bring in larger and complex multinational clients, the FT reported.