BOV takes Bank of the Year award for Malta from FTs The Banker

Bank of Valletta wins prestigious Bank of the Year award for 2015

BOV takes Bank of the Year award for Malta from FTs The Banker


MALTA a stable country with a strong Financial system

Bank of Valletta won the ‘Bank of the Year Award 2015’ for Malta, the prestigious award from The Banker, the monthly banking title of the Financial Times.

The award was presented to Charles Borg, CEO at Bank of Valletta by Brian Caplen, Editor of The Banker during an awards ceremony held at Hilton London Bankside Hotel in London.

The Banker has been a trusted source of global financial intelligence since 1926 and the Bank of the Year Awards listing has become an international key indicator of financial performance. The accolade of ‘Best Bank’ for a given country is awarded by the global editorial team of The Banker after it scrutinises the banks’ data re their earnings, assets, Tier 1 capital growth and return on equity.

They also look out for banks that are setting new standards for their local industries by being innovative in harnessing new technology as well as finding cost-efficient ways of expanding their business, whilst investing in their community. The award for a single bank in every country is for the best overall performance and qualitative achievements.

Tech start-ups waiting ‘way too long’ for IPO

Tech start-ups waiting ‘way too long’ for IPO

Ultra-high private valuations means no room for growth on the stock market

Tech start-ups are waiting “way too long to go public”, the head of Google’s venture capital arm has warned, highlighting a widening rift in Silicon Valley over the fate of the latest generation of fast-growing start-ups.

Many of the companies leading the current technology boom, including Uber and Airbnb, have sought to stay private as long as possible and have raised ever-larger amounts of money from successive rounds of private investment. But the mood is changing and investors are growing skittish.


Some start-ups may rue their decision to exploit the booming private markets to push for high headline valuations, rather than selling shares to the public, said Bill Maris, head of Google Ventures, one of California’s most active VC firms.

“They’re setting the bar so inordinately high they’re making life difficult for themselves,” he said in an interview with the Financial Times. “There’s going to be some fallout: some of them will lose a lot of money.”

Next year, many will be unable to raise more cash in the private markets or be forced to accept lower valuations, he predicted. Google Ventures, which is changing its name to GV, has backed more than 300 companies since its creation six years ago.

Investors who had stampeded into the private markets for a chance to back companies like Uber, Airbnb and Snapchat have become far more risk-averse in recent weeks, especially after questions were raised about the validity of claims made by blood-testing start-up Theranos.

“There’s less money, more fear, more caution,” Mr Maris said.

The prospect of interest rate increases in the US will make the private markets even more hostile for start-ups, he said, adding: “Suddenly, being a public company is going to look a whole lot more exciting.”

The warnings signal a reversal of what became received wisdom during the latest tech boom, as venture capitalists courted entrepreneurs with promises of leaving them free to stay private rather than pushing them to cash out by taking an “exit” like an initial public offering.

Venture capitalist Marc Andreessen, one of the loudest supporters of the private markets, said last month he’d be happy for the companies his firm backed to stay private for 15 years.

Mr Maris said such a course would deprive investors and employees who had been paid partly in stock of the chance to sell at a market price set by Wall Street, rather than the highly opaque private markets.

“I don’t see many examples of fast-growing companies that have stayed private for 15 years,” he said. “Let’s not ignore shareholders and employees. It’s hard to see how you give them what they need and deserve without having a market price.”

He also echoed a warning by Michael Moritz, a partner at Sequoia Capital, who wrote in the FT recently that IPOs were needed to bring more discipline to the way start-ups operated. “They’ll do better with the scrutiny of the public market,” he said.

Asked if Uber, the most prominent company he has backed, was planning an IPO, Mr Maris said: “I’m sure they’re thinking about it because I know people ask them all the time. They’re obviously a prime candidate, they have a great business.”


What does reserve currency status mean for China, and the world?

What does reserve currency status mean for China, and the world?

The Executive Board of the International Monetary Fund (IMF) has decided to include the renminbi (RMB) in its basket of reserve currencies. The RMB, or yuan, has joined the US dollar, euro, British pound and Japanese yen to become the fifth member of the basket used to value the Fund’s own de facto currency, the Special Drawing Rights (SDRs).

151201-IMF special drawing rights basket renminbi china

More than a membership

On the surface, the impact of the decision looks relatively modest. The value of the SDR will be based on a weighted average of the values of the basket of currencies. Only about 2.5% of the US$11.5 trillion of foreign reserve assets are held in the form of SDRs, of which the RMB is expected to account for 11% of the basket (higher than the yen and the pound).

Looking more broadly, however, the inclusion of the RMB (aka the “redback”) in the SDR’s currency basket is bound to have profound implications.

Apart from the RMB’s new acceptance in international trade, settlement and investment, the ultimate aim is to be accepted as a reserve currency, used by central banks to hold foreign exchange reserves. It is estimated that the SDR inclusion should lead to about US$42 billion of reserve assets being rebalanced into the RMB by central banks and reserve managers, in the medium term.

According to the IMF, the move is “an important milestone in the integration of the Chinese economy into the global financial system”.

It is also an important milestone in Beijing’s campaign to internationalise the yuan. As Robert Mundell, “father of the Euro”, declared, “great powers have great currencies”.

For China, this is an essential step in fulfilling its ambition to crown the yuan a global reserve currency. In fact, the RMB is the first currency not issued by a major advanced economy to make it to the IMF basket. More importantly, the IMF’s decision comes at a crucial time for the Chinese leadership as it seeks to demonstrate to constituents international recognition of China’s rise as a global power.

Whatever it takes

The IMF’s RMB decision also sets a precedent for the SDR basket that a basket currency is not yet fully convertible and under capital control from its issuing country. This has led to criticism that the IMF is “bending the rules” in favour of China.

The IMF, on the other hand, sees the move as a reward of “the progress that the Chinese authorities have made in the past years in reforming China’s monetary and financial systems”. Indeed, the SDR inclusion has arguably been the most attractive lure for Beijing to undertake a series of reforms of China’s financial regime.

In order to meet the IMF’s criteria of “freely usable”, China took a “whatever it takes” approach. It liberalised domestic interest rates, aligned the RMB’s exchange rate more along its market value and opened up the interbank market to foreign central banks and sovereign funds. Its treasury even issued short-term (three-month) bonds in order to complete the yield curve for RMB assets, which was seen as a prerequisite for the RMB’s SDR inclusion. Efforts have also been made via some closed-door financial diplomacy to lobby IMF member countries for the RMB’s case.

The last mile

Member countries and the market will now make preparations ahead of the October 1, 2016 date for inclusion of the RMB. It may be the last mile for the RMB’s SDR journey, but there is still a long way to go to launch the redback in the global arena.

Beijing may have convinced the IMF, but a more daunting challenge will be to convince the market. To do so, Beijing needs to demonstrate its commitment to continuing financial opening and liberalisation, to credible monetary management, and to independent decision making on the part of its financial regulators. In other words, the reforms must go on.

With the long awaiting inclusion of the RMB by the IMF, the external world has lost a vital leverage in empowering reformers and inducing domestic reform in China. Without external pressures, only the internal momentum of the reform will allow the RMB to walk the last leg towards true internationalisation.