Price indexes for leveraged loans in the US and Europe are trading at the lowest levels in two years as concerns grow among lenders about the state of the global economy and the US-Chinese trade dispute. Less than 4% of leveraged loans traded above face value in November, down from over 65% in October, according to JPMorgan Chase.
Collateralized loan obligations now top $600 billion in the US and are a growing focus of concern as the credit cycle approaches its peak. Worries are heightened by the fact that banks and insurers hold nearly a quarter of the total, which is fed largely by the ballooning $1 trillion worth of leveraged loans.
Banks may be particularly vulnerable in the event of an economic downturn due to their exposure in the corporate debt market, according to the Office of the Comptroller of the Currency. The agency's semiannual risk report highlights the high volume of commercial loans as well as banks' exposure to nonfinancial corporate debt.
The central banks that played a crucial role in rescuing the world's largest financial-services institutions during the depths of the financial crisis are now starting to nudge banks toward better practices when it comes to sustainable finance. The Bank of England and the Dutch central bank have led the way by taking steps to hold senior executives accountable for managing a bank's climate change risks.
The cross-jurisdictional activity of large European and Swiss banks accounted for 30.8% of the banks' total systemic risk using the Basel Committee on Banking Supervision's five indicator categories scoring framework, compared with 19.8% for US banks.
Growing political interference in monetary policy is threatening the independence of global central banks in emerging markets and developed economies, which could damage those countries' future prospects.
The IACPM thanks the IACPM Fall Conference Program Committee and all of the speakers who participated in IACPM's Annual Fall Conference. Conference participants have received an email containing a link to the IACPM website, where they can access conference presentations until December 17th, 2018. For question, please contact Dani Gelband at firstname.lastname@example.org.
An injury is much sooner forgotten than an insult.
Philip Stanhope, statesman and diplomat
The IACPM is an industry association established to further the practice of credit exposure management by providing an active forum for its member institutions to exchange ideas on topics of common interest. Learn more at