Robert Kennedy College celebrating 50 years of the University of Salford


Robert Kennedy College recently celebrated 50 years of the University of Salford and was pleased to welcome to Zürich Prof. Helen Marshall, Vice Chancellor of the University, Prof. David Spicer, Dean of the Business School and Eileen Roddy, Associate Dean International.

The university has had a venerable history, from getting the Royal Charter from Her Majesty the Queen constituting the University of Salford ‘for the advancement of knowledge’ 50 years ago to having Chancellors the likes of the Duke of Edinburgh (1967-1991), the Duchess of York (1991-1995) and Sir Walter Bodmer (1995-2005) and playing host to Margaret Thatcher, The Smiths, New Order and Happy Mondays that played at Maxwell Hall.

And while the university continues to grow, opening new campuses, laboratories and student accommodation quarters, it also won Business School of the Year and been named in the QS World Rankings of Top 50 global universities.

In an exclusive partnership with Robert Kennedy College #RKC, the university is taking high quality British education global with Swiss ingenuity. With an ever-growing portfolio of online Master’s Degree programmes (click to download the course catalogue), the University of Salford is leveraging the nearly two-decade expertise of #RKC in online education.

To mark the occasion for our residential students, Robert Kennedy College hosted an exclusive live masterclass conducted by Prof. Spicer and Richard Dron, Technical Innovation Officer at Salford Business School. The celebrations continued through to the evening and concluded with a gala dinner that also included our residential students.

The Dean on Bloomberg Television: Credit Suisse’s Strategy Is Paying Off

Dr. David Costa, dean at Robert Kennedy College, discusses second-quarter results from Credit Suisse, European bank stress tests, and what he’s looking for from Credit Suisse going forward. He speaks with Bloomberg’s Francine Lacqua on “Bloomberg Surveillance.” (Source: Bloomberg)


Dean on CNBC: Europe to return to growth in 2014 – Whatever it takes


Europe to return to growth in 2014 – Whatever it takes
The ECB renewed commitment to maintain an accommodative monetary policy will be among the factors that will help Europe to continue the path to recovery that should result in positive GDP growth this year. While Mario Draghi was cautious in calling the end of the crisis his firmer language echoes the famous 2012 speech that drove the return of investors confidence in Europe.  Valuations in Europe remain attractive and there are several investment opportunities both in the broad indices and specific sectors like financials and consumer discretionary. 
This does not mean that the challenges are over:
– Unemployment remains at very high levels of 12.1% (particularly in the periphery)
What is particularly concerning is the level of youth unemployment that reached  very high levels (36.8% in Portugal, 41.6% in Italy, 57.7% in Spain).
– The monetary transmission system of passing the high liquidity provided to banks is not functioning properly.
Small and mid size companies are still seeing limited financing opportunities and the same is true for consumers. 
With the industrial production improvement in Germany (Nov data) and the economic sentiment at a 29 month high the environment is still positive for investors. In the specific I will continue to favour companies with global exposure including consumer discretionary.
European banks 
With the renewed support of the ECB there are still opportunities in the European banking sector particularly in the periphery (with the exclusion of few banks that still have not adapted to the new environment and raised sufficient capital). Overall the creation the banking union later this year will further strengthen the whole sector and reduce the sense of insecurity that has prevented some investors to enter the market. 
The banking union will increase uniformity across Europe and ensure an even higher degree of regulatory oversight and transparency.
In Short
– ECB renewed commitment to maintain an accommodative monetary policy will be positive for European Markets in 2014.
– The European steady path to recovery should translate in positive GDP growth in 2014. 
– Europe still faces several challenges like high unemployment that will take time to normalise. 
– European Banks in the periphery present interesting valuations and a good opportunity for investors. 

Dean on CNBC: Banks face legal charges from the past


Banks face legal charges from the past


Rabobank is just the last bank to have reached a record settlement of $1.07 billion for
alleged misconduct in the libor and other interest rates manipulation scandal.

Barclays is also facing a $700m charge after losing the appeal with hedge fund diamond capital.

Legal charges have also impacted Q3 results of UBS, which now faces
higher provision requirements from the FINMA, and Deutsche Bank that had to increase
litigation reserves of 1.2 billion to 4.1 billion Euro. The situation of
Deutsche Bank is different as it did not yet reach a settlement with the regulators.

This uncertainty over possible further legal charges makes it difficult for
investors to assess the real litigation risk faced by some of these banks.

Banks are therefore going to face higher legal charges and might be required by
regulators, like in the case of UBS, to hold more capital.

Investors can benefit from this volatility in the sector by paying attention to
some unique situations in the industry like:

– Swiss banks maintain a competitive advantage as the regulator moved very quickly
after the crisis to increase capital requirements and do not face the same issue
of other European banks where bad loans have reached $1.7 Trillion ;

– Some Europe banks have no pending legal charges and limited exposure to bad loans
and are a good opportunity for investors;

Given that non performing loans in Europe have double in the last 4 years the environment
will remain challenging. Swiss banks will improve and maintain their strong position in
some banking areas e.g. wealth management.

European banks & bad loans

The increase of European banks bad loans to $1.7 billion raises the question on how
banks will prepare for the next year stress test but, and perhaps more importantly,
how this might impact access to credit in many european economies that need financing to
fuel growth.

In Short

– Litigation risks represent a big challenge for banks and investors that need to
assess how this will impact their future results;
– Swiss banks maintain their competitive advantage due to the strong capital base and the already
reformed Swiss regulatory environment;
– European banks operate in a more challenging environment with higher bad loans and the need to reinforce their capital positions well ahead of the 2014 stress tests.

Dr. David Costa – Dean’s Interview on CNBC: Overlook of banking and Italy


Italy to submit budget to the European Commission
Last Wednesday the Italian Government has approved a number of measures that will allow Italy to keep
the budget deficit inside the 3%. These measure worth 1.6 billion are comprised of 1.1 billion 
in spending cuts by government and local authorities and 500 million in the sales of public buildings.
The target of the Government is a 2.9% budget deficit vs. a 3% of 2012.
The Government objective remains to cut spending and taxes at the same time with emphasis on cutting
payroll taxes to increase competitiveness and improve salaries. 
In my view Italy benefits from several competitive advantages (notably the made in Italy) but has to find
a way to maintain and enhance competitiveness particularly for small and medium size companies where 
access to credit can improve. 

The Dean on CNBC: German Elections: the impact for Europe and European Investors

German Elections: the impact for Europe and European Investors
The upcoming German elections should not present any drastic change for other European
countries or European investors.
We do not know what the Government coalition will be and if some minor parties, like the anti-euro party will
meet the 5% necessary to hold a seat in the parliament, but some points are already well defined:
– In Germany there is a strong consensus against any form of debt mutualisation so we are unlikely to see
any form of Eurobond. That might only happen when and if Europe will have a centralised supervision that will
ensure no overspending. Germany is unlikely to accept and support a fiscal union.
– The banking union process will progress at a slow pace and Germany sees the union more as a long term
institutional structural change and not as a tool to fight the crisis in the short term. 
– Both the German public and the majority of politicians believe on the principle of fiscal austerity and low inflation
which doesn’t stimulate consumers spending.  This is unlikely to change despite the wishes of both the U.S. and other
European countries to stimulate growth. 
German Elections for European Markets
Investment flows in Europe are back at pre-crisis level. What markets really want now is continuity.For this 
reason the re-election of Angela Merkel will be positive for the markets.
In a post-election scenario the new German governments could have more flexibility if needed as there will be
less anxiety about the immediate public reaction.
What I do think it that it is highly unlikely to see a new crisis as the one experience in 2010-2012 which was,
primarily, a crisis of confidence. 
Wide Divide
As highlighted in a recent EY study the divide between northern and southern European economies is widening. For instance
in 2014 unemployment is likely to remain lower than 5.4% in Germany but to peak to 27% and 29% in Spain and Greece.
While as a whole Europe will maintain a steady path to recovery this divide creates opportunities for investors that 
select these European countries, industries and sectors that are more likely to recover in the short term. 
In Short
– German elections is likely to result in policy continuity with the same position on Eurobonds, Banking Union and a recovery
based on fiscal austerity and low inflation;
– European markets are likely to benefit from this continuity and another crisis is unlikely;
– Wide divide to remain with substantial gaps in unemployment and growth between northern and southern european economies. 

The End of Swiss Banking Secrecy ?

The End of Swiss Banking Secrecy ?


The Swiss government proposed bill to allow banks to share clients data with the U.S. received a setback with the parliamentary committee rejection of the draft.
Today’s vote by the upper house will probably decide the future of Swiss banking secrecy. Both bankers and Cantonal financial directors are supporting the agreement as a rejection could lead to criminal indictments for some Swiss banks with obviously a very bad impact to business.

With very limited information available it is however clear that one of the historical competitive advantages of Swiss banks is going to be impacted. The main issue is if the acceptance of some unilateral conditions will set an important precedence that might lead to the end of Swiss banking secrecy.

In my view several Swiss major banks have already adapted their business model by leveraging their competitiveness on security and stability and by refocusing on high growth area like Asia but with a very fierce competition the loss of secrecy might have a negative impact to business.

A recent drop on several Swiss banks might still be a buying opportunity, especially for these banks that have already successfully changed their business model.