Financial Business Review: Blackrock Loses PROFIT Center, J.P. Morgan Ready For EURO EXITS

Here are Wednesday’s top stories:

Citigroup, Inc. (NYSE:C) and Morgan Stanley (NYSE:MS) recruit Perella Weinberg to evaluate the Morgan Stanley Smith Barney brokerage, in which the former holds a 49 percent investment, and intends to sell more. Citi values the brokerage at approximately $22 billion, but Morgan Stanley sees it as only about $9 billion.

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Alison Carnwath steps down from her position as the head of Barclays PLC (NYSE:BCS) remuneration committee. A large number of shareholders had voted against her renomination to the board earlier in 2012, due to their objections concerning executive pay.

BlackRock, Inc. (NYSE:BLK) is bereft of a profit center as the European Securities and Markets Authority rules that European fund managers must give back any money made from securities lending transactions to investors. The firm’s iShares division is a major player in that area, and BlackRock contends that the new rule will put it at a disadvantage to synthetic exchange-traded fund providers. The new regulation will become effective in February of next year.

J.P. Morgan Chase Co. (NYSE:JPM) is set to act, should an exit from the Euro monetary union occur. The firm has established a plan to trade the bonds of any country that leaves. Carl Norrey comments that, “The probability of a country exiting the euro is no longer zero. It’s a massive task, (but) we would be ready to trade with clients in as short a period of time as possible.”

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