Merrill Consolidates Credit Risk Book

  • 18 Jun 2001
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Merrill Lynch has moved emerging market credit derivatives risk to a global, all-encompassing emerging markets book from the structured credit trading book. George Handjinicolau, global head of emerging markets in New York, said the reason behind the move is hard currency emerging market debt, credit derivatives referenced to emerging markets and local currency debt are all country-risk dependent, therefore it makes sense to put these together. "We are adapting our structure to the real world." Both proprietary trading and customer business will be included, as will plain-vanilla and exotic credit derivatives.

This change is the culmination of a three-year investigation into managing emerging market risk. During the 1998 emerging market crises Merrill discovered it had elements of emerging market risk in different sections of the bank. It has decided these would be easier to manage if they were centralized.

Several rival banks put credit derivatives risk in a separate risk book, but traders were split to whether that is the right decision. One trader said there is no point hedging credit derivatives exposure with local currency debt because a sovereign may default on its local currency debt but not its hard currency debt. It therefore makes sense to manage credit risk in a separate book.

Another trader was not familiar with Merrill's plans but said in his own bank emerging market credit derivatives were exceptionally profitable in 1999 and 2000 and managers argued strongly not to have them taken out of their profit and loss accounts. Bankers are less likely to fight to keep emerging market credit risk in their P&L accounts since the bloom has come off emerging markets in the last year, he added.

  • 18 Jun 2001

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 24 Oct 2016
1 JPMorgan 317,793.98 1355 8.72%
2 Citi 301,114.13 1092 8.26%
3 Barclays 259,580.63 846 7.12%
4 Bank of America Merrill Lynch 258,842.43 934 7.10%
5 HSBC 224,273.23 905 6.15%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 18 Oct 2016
1 JPMorgan 29,669.98 55 6.95%
2 UniCredit 28,692.62 136 6.73%
3 BNP Paribas 28,431.90 139 6.66%
4 HSBC 22,935.49 112 5.38%
5 ING 18,645.88 118 4.37%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 18 Oct 2016
1 JPMorgan 14,593.71 79 10.38%
2 Goldman Sachs 11,713.19 63 8.33%
3 Morgan Stanley 9,435.23 48 6.71%
4 Bank of America Merrill Lynch 9,019.27 40 6.41%
5 UBS 8,763.73 42 6.23%