Financial firms support efforts to prevent asset bubbles | Government-bond sell-off doesn't hurt euro corporate debt | Is the bond-market rout really over?
 
 
May 19, 2015
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Credit Markets
Financial firms support efforts to prevent asset bubbles
Large financial companies are backing central bank policies to prevent overinflated asset prices. BlackRock, HSBC Holdings, Assicurazioni Generali and others say in a paper from the World Economic Forum that they support macroprudential policy. Reuters (5/18), The Independent (London) (tiered subscription model) (5/18), Financial Times (tiered subscription model) (5/18)
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Government-bond sell-off doesn't hurt euro corporate debt
A sell-off of government debt, which has hit Europe particularly hard, has had minimal impact on corporate bonds denominated in the euro. Markit iBoxx indices show that the yield spread above government bonds is at 1.05 percentage points, down from 1.12 points about a month ago. The Wall Street Journal (tiered subscription model) (5/14)
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Is the bond-market rout really over?
Some analysts are saying the recent bond-market rout has just about run its course. Bank of America says Treasurys are reasonably valued in light of expectations for inflation and rising interest rates. Bloomberg (5/17)
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Commentary: Revival of single-name CDS could be beneficial
An attempt to revive the single-name credit default swap comes as low liquidity hampers the corporate bond market. Bloomberg's Tracy Alloway delves into the history of single-name CDS and analyzes ways they might benefit the current market landscape. Ultimately, Alloway settles on how one should feel about the return of single-name CDS: "Cautiously optimistic?" Bloomberg (5/11)
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Vanishing collateral threatens solvency of Greek banks
Collateral at the Bank of Greece used by lenders for emergency liquidity is being tapped out. That could make banks insolvent, economists say. "Pressures on central government cash flow, pressures on the banking system, and the political timetable are all converging on late May-early June," according to a client note by JPMorgan Chase analysts Malcolm Barr and David Mackie. Bloomberg (5/17)
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Chinese bank loan data reflect growing worries
Banks in China made new loans worth 707.9 billion yuan in April and money supply rose 10.1% from a year earlier, both well below expectations. Lenders appear to be taking heed of their growing burden of bad loans, broad indications of a cooling economy and lower corporate earnings despite repeated rate cuts and other measures by the central bank. The Business Times (Singapore)/Reuters (5/13)
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Regulatory and Accounting Issues
Basel leverage ratio needs raising, Swiss official says
The Basel Committee on Banking Supervision's minimum leverage ratio for big banks should be higher than 3%, Swiss Financial Market Supervisory Authority CEO Mark Branson says. "The world has moved on" since the level was set, he says. Risk.net (subscription required) (5/12)
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EU reportedly reviews inquiry on bank action in CDS market
The EU is considering renewing an investigation into whether 13 large banks conspired to block exchanges from the credit default swaps market, sources say. One issue reportedly is regulators' failure to question CME Group, despite considering it a victim. Bloomberg (5/13)
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Analysis: Costs, benefits of regulatory changes remain unclear
More-thorough economic analysis of rules adopted after the financial crisis could reveal better ways to guard consumers' interests and avoid further crises, Greg Ip writes. The Wall Street Journal (tiered subscription model) (5/13)
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IACPM News
IACPM Annual Spring Conference -- Walk-in Registrations Are Welcome!
The Conference takes place on Thursday and Friday, May 21-22 in London at the InterContinental London Park Lane Hotel located at One Hamilton Place, London W1J 7QY. Walk-in registrations are welcomed provided you arrive with a credit card. Registration opens at 8:00 a.m. Conference fees are US$2,460 for member firms and regulators; $2,960 for non-member firms (who are eligible for membership in the IACPM).

The IACPM will offer its Educational Seminar on Wednesday, May 20th, at the InterContinental with registration opening at 8:00 a.m. in Leaden Hall on the Second Floor. Fees for all attendees: US$985.

The agenda for the Spring Conference and Educational Seminar can be viewed at www.iacpm.org. Questions are also being answered by Alison Christensen, alison@iacpm.org.
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SmartQuote
To desire and expect nothing for oneself and to have profound sympathy for others is genuine holiness."
-- Ivan Turgenev,
writer
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