Monthly Archives: January 2016

Proposal for banker-conduct registry gains traction

Proposal for banker-conduct registry gains traction

Federal Reserve Bank of New York President William Dudley supports the creation of a searchable database that would inform hiring managers of bankers’ misconduct. The proposal has received industry support amid issues related to the foreign exchange market and interest-rate benchmarks. Bloomberg (12/22)

When Currencies Collapse

In late December, the Azerbaijani currency, the manat, lost a third of its value in a single day. This was after the central bank decided to float the manat, which had previously been fixed to the dollar. The move has angered the population and made ripple waves across the Caucasus region. Soon after, the prime minister in neighboring Georgia resigned, currency fluctuations being cited as one of the reasons for his abrupt departure. This may be just the beginning of a painful restructuring period in the region’s public finances.

 

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RPT-Fed-up creditors seek to put US energy’s zombies into bankruptcy

Rising financial stress in the U.S. energy sector has prompted some suppliers and vendors to take unusual legal action to collect unpaid debts: forcing struggling companies with billions of dollars in debt into bankruptcy.

Since August, creditors have filed petitions for involuntary bankruptcy against three energy producers with nearly $2 billion in combined debt: Miller Energy Resources Inc, Black Elk Energy Offshore Operations and Energy & Exploration Partners Inc.

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Video : The Overnight Money Market

The Overnight Money Market by Ben Chabot and Stefania D’Amico

This video presentation provides a simple overview of the recent evolution of the U.S. overnight money market and how the Federal Reserve’s tools to implement monetary policy have evolved with the market. The visualization and narration of the money market’s main financial instruments, participants and respective interactions are meant to simplify complex concepts and relation networks that constitute the foundation of short-term borrowing and lending in U.S. financial markets. For more details, please see the video transcript and references therein. Read more

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PRICING GEOPOLITICAL RISK

In an entertaining and informative session at the Fiduciary Investors Symposium at Chicago Booth School of Business, the John P. Birkelund ’52 Professor in History and International Affairs at Princeton University, Stephen Kotkin, said geopolitical risk is largely priced in to markets.

“Geopolitical risk is about incompetence of decision makers, which is mostly an unknown and unpriceable. This remans the key variable,” he says.

 

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Raising of Funds Through Compulsorily Convertible Debentures

Raising of funds by issuance of Compulsorily Convertible Debentures (“CCD”), also known as convertible notes in common parlance, is one of the ways that start-ups can raise money during the early stages of investments and bridge round investments. Primarily because of the flexibility that such an instrument offers with respect to conversion into shares, at a later point of time, without having to fix a valuation of the investee company straight away.

 

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Role of credit rating agencies

Credit rating agencies have been criticized for their role in the 2007 sub-prime crisis, which led to the global financial crisis, but it wasn’t until a recent lawsuit exposed their internal emails that it became clear to what extent they were responsible.

While the global financial crisis can’t be blamed on any one in particular, there was widespread criticism for the role that credit rating agencies played in the credit bubble preceding it. After all, these agencies had assigned AAA ratings to collaterised debt obligations (CDOs) that collapsed a month later. Yet they were able to get away for years after the crisis, with the argument that credit ratings were just opinions…and opinions can turn out to be wrong. Read more

 

S&P : 2016 Credit Outlook For Indian Companies – Join Our Webcast, 20 Jan 12pm IST

2016 Credit Outlook For Indian Companies

Live Webcast And Q&A

 

Date & Time:

Wednesday
January 20, 2016

Singapore / Hong Kong/
2.30 p.m.

Thailand / Indonesia
1.30 p.m.

India
12.00 p.m.

Australia
5.30 p.m.

Please join us for a webcast and Q&A on Wednesday, 20 January on the 2016 credit outlook for Indian companies.

Register now

Key discussion points on rated Indian companies:

  • Impact of the domestic economic environment
  • Risk from China slowdown and the rise in U.S. interest rates
  • Expected credit trends and rating headroom for companies
  • Leverage trends and liquidity positions

Register now. This webcast is provided on a complimentary basis. You will receive a link to the replay as long as you register, even if you end up missing it.

Speakers from the Corporate Ratings team:

  • Mehul Sukkawala, Senior Director
  • Abhishek Dangra, Director
  • Vishal Kulkarni, Associate Director
  • Ashutosh Sharma, Associate Director

You will need computer speakers or headphones to listen to the webcast. You may submit your questions for the speakers in real time via the web interface. Please test your system here at least 15min before the scheduled start time.

If you are not able to view a short flash video play with audio on both Internet Explorer and Firefox, you can still join the webcast via dial-in numbers provided in the confirmation email you will receive once you have registered online. Participants who listen by phone only will NOT be able to submit a question. Please email us your questions instead.

 

BIS : Guidance on credit risk and accounting for expected credit losses

This document sets out supervisory guidance on sound credit risk practices associated with the implementation and ongoing application of expected credit loss (ECL) accounting frameworks. The move to ECL accounting frameworks by accounting standard setters is an important step forward in resolving the weakness identified during the recent financial crisis that credit loss recognition was too little, too late. It is also consistent with the April 2009 call by G20 Leaders for accounting standard setters to “strengthen accounting recognition of loan loss provisions by incorporating a broader range of credit information”.

This guidance, which should be viewed as complementary to the accounting standards, presents the Committee’s view of the appropriate application of ECL accounting standards. It provides banks with supervisory guidance on how the ECL accounting model should interact with a bank’s overall credit risk practices and regulatory framework, but does not set out regulatory capital requirements on expected loss provisioning under the Basel capital framework.

The failure to identify and recognise increases in credit risk in a timely manner can aggravate underlying weaknesses in credit quality, adversely affect bank capital adequacy, and hinder appropriate risk assessment and control of a bank’s credit risk exposure. The bank risk management function’s involvement in the assessment and measurement of accounting ECL is essential to ensuring adequate allowances in accordance with the applicable accounting framework.

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Volatility and Reforms: The Overlooked Virtues of Economic Uncertainty

Does economic uncertainty promote or impede the adoption of structural reforms? This question arises when jointly considering two issues that became particularly relevant during the Great Recession.  On the one hand, the rise in macroeconomic volatility in recent years has stimulated a new literature on how uncertainty impacts economic activities and private investment decisions (see Bloom 2009, 2011, 2011a, 2014). On the other hand, the Crisis has also revealed the need for structural reforms. Surprisingly, little effort has been devoted to studying the effect of uncertainty on public policy decisions such as reforms.  In a recent paper, we aim to fill this gap by empirically investigating whether and how economic uncertainty affects the implementation of structural reforms (Bonfiglioli and Gancia 2015).

 

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Redefining indexes to reflect reality

The investment industry should be constantly looking at the impact of technology on the status quo. Just because indexes have been defined as cap-weighted portfolios, doesn’t mean that can’t change. In fact, the evolution in portfolio management necessitates a change in thinking with regard to the definition of indexes, in particular so risk management can be decoupled from alpha generation. In a new paper that argues for a new definition of what constitutes an index, Andrew Lo, professor of finance at MIT Sloan School of Management pushes the boundaries by not only suggesting change, but by demonstrating a new functional definition for indexes and the benefits, and pitfalls, of doing so.

 

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China And The Global Economy: S&P’s Outlook For US, Europe And Emerging Markets – Live Webcast And Q&A Jan 15, 830am ET

China And The Global Economy: S&P’s Latest Views On The Outlook For US, Europe And Emerging Markets

Live Webcast and Q&A

Date & Time:

Friday
January 15, 2016
8:30 a.m. EST
1:30 p.m.London Time
2:30 p.m. CET

Related Research:

Insights From Our Economists

 

In the last few days, financial markets globally have been roiled by renewed worries about the Chinese economy and its impact on the rest of the world. Investor concerns have grown about the implications for inflation, commodities, growth and job creation worldwide.

To hear S&P’s latest views on risks for the global economy and the contrasting outlooks for China, the US, Europe, Latin America and the rest of Asia, please join our Global Economics Team on Friday, January 15, 2016 at 8:30 a.m. Eastern Standard Time, 1:30 p.m. London Time and 2:30 p.m. CET for an interactive, live audio Webcast.

Register for the Webcast

Speakers are:

Paul Sheard
Chief Economist
McGraw Hill Financial
Paul Gruenwald
Chief Economist, Asia Pacific
Standard & Poor’s Ratings Services

Jean-Michel Six
Chief Economist, Europe, Middle East & Africa
Standard & Poor’s Ratings Services

Joaquín Cottani
Chief Economist, Latin America
Standard & Poor’s Ratings Services
Moderated by:

John Piecuch
Senior Director
Standard & Poor’s Ratings Services

Replay will be sent to all registrants.
Standard & Poor’s Ratings Services’ Webcasts deliver audio and slides in a streamlined presentation. You will need computer speakers or headphones to listen to the audio stream. Throughout this live webcast, you may submit your questions for the presenters in real time via the Webcast interface.

IndRA Event : “Gradual Economic Recovery – Can India Break Free?” Jan 22, 7:30 PM. MUMBAI

India Ratings and Research invites you for an event on 22 January, 2016 to discuss the FY17 Macroeconomic Outlook at The St. Regis, 462, Senapati Bapat Marg, Lower Parel, Mumbai 400013. The event will begin at 7:30 PM.

This year’s theme is, “Gradual Economic Recovery – Can India Break Free?”

As we enter into 2016, there is both relief and concern on the economic front. Relief because India is not only best placed among emerging/BRICS economies but is also at the doorstep of a new growth run. Concern because investment revival is nowhere in sight. Therefore, sustaining the growth momentum is going to be a challenge.

The Forum would focus on:

  • Macroeconomic Outlook for FY17
  • How has the consumption/investment story evolved so far?
  • Can India go past the current rate of GDP growth?

Dr. Devendra Kumar Pant, Chief Economist & Head Public Finance.

The forum will be followed by a cocktail dinner.

Register now

Venue
The St. Regis Mumbai,
462, Senapati Bapat Marg, Lower Parel,
Mumbai 400013.
Time: 7:30 PM

We have limited seats. Register today.

Click on Register Now 

India Ratings’ Forum on the Macroeconomic Outlook for FY17 on 19 Jan 2016 in New Delhi

India Ratings and Research invites you for an event on 19 January, 2016 to discuss the FY17 Macroeconomic Outlook at The Imperial, in Janpath, New Delhi. The event will begin at 7 PM.

This year’s theme is, “Gradual Economic Recovery – Can India Break Free?”

As we enter into 2016, there is both relief and concern on the economic front. Relief becauseIndia is not only best placed among emerging/BRICS economies but is also at the doorstep of a new growth run. Concern because investment revival is nowhere in sight. Therefore, sustaining the growth momentum is going to be a challenge.

The Forum would focus on:

  • Macroeconomic Outlook for FY17
  • How has the consumption/investment story evolved so far?
  • Can India go past the current rate of GDP growth?

Dr. Devendra Kumar Pant, Chief Economist & Head Public Finance and Dr. Sunil Sinha, Principal Economist will present the outlook at the forum.

The forum will be followed by a cocktail dinner.

Venue
Le Meridien New Delhi,
Windsor Place, Raisina Road,
New Delhi 110001.
Time: 7:00 PM

We have limited seats. Register today.

Click on Register Now 

16 Predictions for ’16 – ’21 from Vikram Mansharamani

2015 was a roller coaster of a year for analysts of global economics and politics. Terrorist tragedies from the US and France to Nigeria and Iraq shocked us, Nepal suffered a devastating earthquake, and Volkswagen’s massive fraud surfaced.  A million migrants flowed into Europe, and a nuclear deal was reached with Iran.  The US and Cuba made progress in restoring relations, and Donald Trump grabbed global headlines.  Nations reached a new set of climate accords in Paris, and the Islamic State persisted.  China’s slowdown continued, it ended its one-child policy, and energy and industrial commodity prices stayed lower than expected.  And of course, the Fed began its effort to normalize interest rates.

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Live web presentations on the new Leases Standard, Jan 13, 9am GMT

The staff of the International Accounting Standards Board® will hold two live web presentations on the new Leases Standard on 13 January 2016, the day the Standard will be issued.

For the convenience of stakeholders around the world, there will be one presentation held in the morning and one in the afternoon. Both presentations will provide an overview of the new requirements, followed by an opportunity for participants to ask questions. Each presentation, including Q&A, will last approximately 45 minutes.

Register to watch ‘Introducing the new Leases Standard’

There is no charge to listen to the web presentation but a registration is required. To register for the webcast, click on the ‘Register’ link below.

Date/Time (GMT) Register
9am Wednesday 13 January 2016 Click here
3pm Wednesday 13 January 2016 Click here

 

 

The Rieger Report: Apple Inc.: Stock & Bonds Move on Different Tracks

We all know stocks and bonds are rarely correlated.  The recent steep decline in the price of Apple Inc. stock illustrates this vividly.  Since the end of November the price of Apple Inc. stock has fallen by over 10%.  Apple has also become one of the larger U.S. corporate bond issuers.  Those bonds have barely moved during this time period.

– See more at: http://www.indexologyblog.com/2015/12/20/the-rieger-report-apple-inc-stock-bonds-move-on-different-tracks/

Outlook 2016: Will liquidity dry up in 2016?

A widespread anxiety about liquidity co-exists with trillions of euros pumped into the markets by central banks. Daniel Ben-Ami explores the paradox

Will liquidity dry up in 2016? It may not be a high profile public debate but it is a question preoccupying many asset managers and international financial institutions at present. For the time being, it seems to have replaced volatility as a primary concern for many investors. It is also a topic that pension funds would do well to consider. Read more

S&P Webcast : Structured Finance 2016 Global Outlook, Friday, January 8, 2016 Time: 11:00 a.m. EST

Given turbulent market conditions, Standard & Poor’s Ratings Services will hold a webcast on Friday, January 8, 2016 at 11:00 a.m. EST to discuss recent volatility and the expected impact to our Global 2016 Outlook for Structured Finance.  Senior credit analysts will provide perspectives on each of their respective sectors and current expectations for 2016 collateral and issuance performance. Given the number of speakers, below is a list of with the approximate time they are scheduled to speak. Questions may be submitted at any time during the webcast, however in order to get through the material as scheduled, we will answer questions at the end of our prepared remarks.

Title: Structured Finance 2016 Global Outlook

Date: Friday, January 8, 2016

Time: 11:00 a.m. Eastern Standard Time

Duration: 1 hour and 30 minutes

Register for the complimentary Webcast