The FSB (Financial Stability Board) of the G-20 has created a list of 24 banks and 6 insurance companies that pose significant risk to world financial systems and require special oversight. The list has not been officially released, but 30 names have been mentioned at ft.com and a list has been published by the editor at Wall Street Pit.

Banks

Thirty giant financial institutions were selected by the FSB for cross-border systemic-risk oversight and will be asked to write "living wills" that outline wind-down plans in the aftermath of a crisis.

North America: Goldman Sachs (GS), JPMorgan (JPM), Bank of America (BAC), Royal Bank Of Canada (RY).

• UAE moves to quiet fears. In an apparent effort to calm global markets, the central bank of the United Arab Emirates said it will give affected banks a liquidity line of unspecified size after Dubai shocked markets on Wednesday with news of a standstill on some $60B of debt for Dubai World. Reports suggest European banks could be on the hook for some $40B. The central bank said it was standing behind local and international banks in the U.A.E. with a special additional liquidity facility linked to their current accounts at the central bank, at the rate of 50 bps above the 3-month Eibor. It said nothing about helping Dubai, but stated that the U.A.E. banking system "is more sound and solid than a year ago." The lifeline news helped sooth some nerves after big losses late last week, sending the MSCI Emerging Markets Index to its biggest gain in two weeks on Monday.
• Thirty financials on systemic risk list. Thirty giant financial institutions were selected by the FSB for cross-border systemic-risk oversight, and will be asked to write "living wills" that outline wind-down plans in the aftermath of a crisis. North America: Goldman Sachs (GS), JPMorgan (JPM), Bank of America (BAC), Royal Bank Of Canada (RY). U.K.: HSBC (HBC), Barclays (BCS), Royal Bank of Scotland (RBS), Standard Chartered. Europe: UBS (UBS), Credit Suisse (CS), Societe Generale, BNP Paribas, Santander (STD), BBVA (BFR), Unicredit, Banca Intesa, Deutsche Bank (DB), ING Group (ING). Japan: Mizuho (MFG), Sumitomo Mitsui, Nomura (NMR), Mitsubishi UFJ Financial Group (MTU). Insurers: AXA (AXA), Aegon (AEG), Allianz (AZ), Aviva, Zurich, Swiss Re.
• Black Friday: more people spent less. U.S. consumers flocked to buy cheap laptop computers and other specials the day after Thanksgiving, but heavy discounts meant that major retailers hauled in just 0.5% more in sales this period than a year earlier ($41.2B vs. $41B), even as the number of shoppers at stores and on web sites rose to 195M from 172M a year earlier. Recession-pressed shoppers spent an average $343.31, less than $372.57 a year ago. The NRF still expects spending to fall by 1% this season.
• Treasury losing patience with mortgage servicers. On Monday, the Treasury plans to meet with mortgage servicers and press them to act more swiftly in helping borrowers avert foreclosure under a $75B campaign meant to address this problem, sources say. One of its tactics will be to humiliate banks that aren't pulling their weight by naming them publicly. "Some of the firms ought to be embarrassed, and they will be," Treasury's Michael Barr said in a recent interview. The Treasury is also expected to unveil new measures to enhance mortgage servicer transparency and accountability as part of a broader focus on maximizing conversion rates to permanent modifications. BofA (BAC) is thought to be among the worst performers in the program, while Morgan Stanley (MS), Citigroup (C) and JPMorgan (JPM) have been among the better ones.
• Bernanke warns on clipping Fed's wings. In a blunt editorial in Sunday's Washington Post, Fed chairman Ben Bernanke spoke against government meddling to shrink the Fed's role in supervising the U.S. banking system, warning this would "impair the prospects for economic and financial stability in the United States." Some in the Senate have criticized the Fed for lax supervision and introduced legislation this month that would strip bank oversight from the Fed and create a single bank regulator. Senator Bernie Sanders Sunday said he will not vote to reconfirm Ben Bernanke as Fed chairman, saying "he is part of the problem." Bernanke's op-ed comes ahead of his re-nomination hearing this week.
• Sands China IPO starts with whimper. The IPO of Sands China, the world's seventh-largest IPO so far this year, dropped 10% on its first day, as many expected. Shares of the Macau unit of U.S. casino operator Las Vegas Sands (LVS) opened at HK$9.35, vs. their Hong Kong IPO price of HK$10.38. The IPO, which raised $2.5B, came in the middle of the Dubai debt debacle and more generally, a stock market that's been showing signs of fatigue.
• China spurns Europe on yuan. European officials flew back home empty handed over the weekend, having failed to convince the Chinese government to revise controls that shelter the yuan from the dollar's fall and expose the euro region. The euro has surged some 20% versus the U.S. dollar since Feb. 18, making exports less competitive and threatening the region's recovery. ECB President Jean-Claude Trichet admitted at a briefing that no immediate change to China's currency polices is likely. He said Chinese officials confirmed that they will continue to implement currency reforms begun in 2005, when a fixed exchange rate ended.
• IBM to buy safety start-up. IBM (IBM) is expected to announce that it closed on the purchase of database security start-up Guardium for $225M, according to Israeli financial newspaper TheMarker. Guardium, which has some 60 employees and was started as an Israeli firm in 2002, moved to Boston in 2003. The company had raised $21M from venture capital funds such as Ascent Venture Partners, Israel's StageOne Ventures and Veritas, and Cisco Systems (CSCO). Guardium's software lets companies give customers and partners access to their corporate applications, while ensuring that the databases used by those applications remain shielded.
• Iran provokes over nuclear plan. Tensions between Iran and the international community could worsen after the country unveiled plans for a massive expansion of its nuclear program and said it might pull out of the Nuclear Non-Proliferation Treaty. President Mahmoud Ahmadinejad told a cabinet meeting Sunday of plans to build 10 more nuclear facilities for enriching uranium to provide nuclear fuel for energy, but Western officials suspect Iran wants to build an atomic bomb.
• India growth powers ahead. India's GDP grew 7.9% in Q3 vs. last year's same period, shattering analyst expectations of 6.3% as higher domestic demand and strong mining and manufacturing growth helped. India is also likely to upwardly revise its official growth forecast for the fiscal year ending March 31, 2010, according to a news report. The government has forecast growth of 6.5% for the fiscal year.
• Saab has new suitors. Just days after Swedish car maker Koenigsegg reneged on plans to take Saab off General Motor's hands, two new suitors - U.S. investment firms Wyoming-based Merbanco and Renco Group in New York - have indicated an interest. Saab is racing to convince GM to save the company, which has yet to turn a profit after more than 20 years. It may get a needed boost after the Swedish government on Friday said it remains ready to act as the company's guarantor on €400M in loans from the European Investment Bank. Sweden is sending a delegation to Detroit to meet with GM officials early next week. GM's board begins its regular monthly meeting late Monday and could announce a decision on Saab's future as soon as Tuesday.
• Democrats expect green light for healthcare plan. Congress is expected to bless the healthcare reform proposal aimed at expanding medical coverage to millions of uninsured, but not without concessions, leading Democrats have said. The U.S. House of Representatives passed its version of the plan on November 7, and the Senate will be up to bat Monday to begin debate. Democrats have been struggling for consensus over issues such as abortion, a new government-run insurance plan and efforts to rein in costs.

Today's Markets

Asia stocks bounced back Monday with sharp gains across the board. Europe opened higher but has mostly moved into the red, as have stock futures.

According to the WSJ, European Banks’ UAE Exposure Totals $83.7 Billion.

The breakdown is as follows:

My post title is an ode to Yves Smith, who likes to feign surprise when the blindingly obvious finally comes into plain view for all to see. The latest sign that underneath the surface weakness remains at large financial institutions comes courtesy of Standard & Poor's. According to the Telegraph’s Ambrose Evans-Pritchard, S&P believes many are horribly short of capital.

Every single bank in Japan, the US, Germany, Spain, and Italy included in S&P’s list of 45 global lenders fails the 8pc safety level under the agency’s risk-adjusted capital (RAC) ratio. Most fall woefully short.

• Most banks fail ratings test. Most major banks still don't have enough capital to comfortably maintain their credit ratings, S&P said Monday, releasing the first global comparison of risk-adjusted capital adequacy for the world's top banks. Mizuho (MFG), Citigroup (C), UBS (UBS) and BBVA all came in well below the global average RAC of 6.7%; Mizuho's was just 2%, Citigroup's was 2.1%, UBS's 2.2%, and BBVA's 5.4%. Banks with stronger than average balance sheets included HSBC (HBC) (9.2%) and Goldman Sachs (GS) (8.3%). In a swipe at widely-used tier-one and leverage ratios, S&P said they aren't consistently calculated or don't adjust for risks. "We do not believe that these two capital ratios, which are the most commonly used by market constituents, are sufficient to assess banks' risk-adjusted capital adequacy."
• U.S. economists upbeat. Reiterating its statement that "the Great Recession is over," the National Association for Business Economists (NABE) boosted its economic growth forecast for 2010 to 2.9%, up from the 2.6% the group predicted last month. However, NABE said it expects the jobless rate to remain stubbornly high, averaging 9.6% in Q4 2010, which should keep a lid on inflation as substantial labor slack and higher productivity gains cut labor costs. "Real GDP growth should also be enough to recover losses from the recession and return output to an all-time high by the end of 2010," it predicted.
• Dimon for Treasury Secretary? With support for Treasury Secretary Tim Geithner waning, JPMorgan (JPM) CEO Jamie Dimon is emerging as a potential successor, sources say. People who know Dimon say he "would love to serve his country," and note he has recently begun making frequent visits to Capitol Hill, and earlier this month published an op-ed that urged the government to allow large institutions that take big risks collapse rather than receive government aid. Dimon has the support of outspoken bank analysts Dick Bove, who says the Treasury Secretary must be a person "who has earned respect on their own as a result of hard-won battles in finance to represent this nation... That is not Timothy Geithner. It is Jamie Dimon."
• Bullard wants more QE. St. Louis Fed chief James Bullard says the Fed should extend its program to buy mortgage-backed securities and agency bonds beyond the current March deadline in order to remain agile and respond to any weakening in the economy. "I would just like to keep them active at a very low level instead of saying we're shutting down," Bullard told reporters in New York. "Initially it would do nothing for the economy, but it would give the Fed the option to react to future news as it comes in." The Fed has said it will complete its planned $1.25T scheme by March, and recently reduced the agency-debt purchase ceiling to $175B from $200B.
• Microsoft, News Corp. plot Google block. News Corp's (NWS) Rupert Murdoch may yet have his way to make online viewers pay for content if talks he's having with Microsoft (MSFT) pan out. The two have reportedly discussed a tie-up wherein News Corp. would get paid to remove its news websites from Google's (GOOG) search engine. Microsoft, which relaunched its search engine as Bing this year, has talked with other online publishers about a similar move, as it looks for ways to grab market share from Google.
• Ciena trying to connect with Nortel. U.S. network equipment maker Ciena (CIEN) upped its offer by more than $200M to $769M and edged out a joint bid by Nokia Siemens (NOK, SI) and private-equity firm One Equity Partners to buy Nortel's optical networking and carrier ethernet assets. The deal will more than double Ciena's turnover.
• Cadbury hopes for sweeter deal. Not to be left out, Nestle (NSRGY.PK) is thought to be considering a bid for Cadbury (CBY) to challenge Kraft's (KFT) $16.7B hostile offer and a potential counterbid by Hershey (HSY). According to one analyst, Nestle could "blow Kraft out of the water" if it executes an option to sell its majority stake in Alcon (ACL) to Novartis (NVS) for more than $20B come January. Cadbury Chairman Roger Carr told the Sunday Telegraph he would prefer a merger with Hershey rather than Kraft, but added both bids could fail if not sweet enough. Sources say Kraft is considering increasing its bid or offering more cash.
• Price tussle over NBCU. Talks between GE Corp. (GE) and Vivendi have reportedly ground to a halt as the two clash over how to assess the worth of NBC Universal, with a price difference of several hundred million dollars separating them. GE and Comcast (CMCSA) had hoped to announce a deal as early as Monday, but sources say this could now be at least a week away, or perhaps not at all if the French media company decides to pursue an IPO of its 20% stake in NBCU rather than sell it back to GE.
• Goldman lashes back at NYT. Lucas van Praag, spokesman for Goldman Sachs (GS), fired back at the New York Times over the weekend for suggesting in an article and editorial that Goldman had more AIG exposure than it let on pre-bailout, dismissing most of the statements as "speculative." He also took issue with the findings of a government report (.pdf) that said the Fed caved in to AIG's counterparties during the bailout. Goldman still insists its exposure was "close to zero." The Times editorial slammed Goldman for fleecing the American public and called on the firm to make a multi-billion-dollar gift to the federal Bureau of the Public Debt.
• BofA's Lewis may rule another day. Bank of America (BAC) out-going CEO Ken Lewis may stick around a few months later than his scheduled departure of Dec. 31 while the bank continues to hunt for a replacement, sources say. At least four external candidates, including Citigroup (C) director Michael O'Neill, apparently rebuffed approaches. BofA's board has suggested it may extend its search for a permanent replacement into 2010 if the directors can't settle on a candidate in the next four days. The list of prospects has reportedly been narrowed to two BofA executives and at least two outsiders.
• e-Bay in auction freeze-out. eBay (EBAY) is calculating the cost of a disruption to its auction process on Saturday after a surge in live listings prevented users from finding products on the U.S. and some international eBay sites. eBay said it will compensate sellers for affected listings. Saturdays typically account for about 11% of eBay's weekly sales, although this Saturday may be more painful given the upcoming holiday shopping period.
• Oil slick for Reliance. Reliance Industries, which owns the world's largest oil-refining complex, may pay $10-12B to buy bankrupt chemicals and fuel maker LyondellBasell Industries, which is based in Rotterdam. The acquisition by Reliance, listed in Mumbai, could be the biggest acquisition by an Indian company in two years. Analysts said the deal would instantly expand the company's presence in the U.S. and Europe.
• U.S. Healthcare bill faces possible split. The highly contentious U.S. healthcare bill cleared an important Senate hurdle over the weekend, garnering the 60 votes needed to open floor debate on the plan. But lawmakers warned that the bill still faces serious hurdles.
• Coca-Cola targets China. In a move aimed at tripling its sales to middle-class consumers in China, Coca-Cola (KO) is planning to more than double its number of bottling plants in the country over the next ten years. A company official, speaking to investors in Atlanta last week, said the company also planned to distribute more than six times as many Coke-branded coolers to retailers, bars and restaurants in China over the coming decade, employing an expanded sales force to reach an additional 4.7M outlets.

Earnings: Mon. Before Open

• LDK Solar (LDK): Q3 EPS of $0.27 beats by $0.37. Revenue of $282M (+23.5%) vs. $277M. Sees Q4 revenue of $280-310M vs. $259M consensus. (PR)
• Tech Data (TECD): Q3 EPS of $0.84 beats by $0.13. Revenue of $5.64B (-9.5%) vs. $5.33B. Sees Q4 sales up low-to-mid single digits Y/Y vs. consensus of -1.2%. (PR)

Today's Markets

Overseas markets were broadly higher Monday, sending futures up overnight.

The complete list of Japanese ADRs traded in the U.S. is listed below: