When it comes to going about things the right way, the United States has not been much of a flagbearer in financial markets in recent months.
Volatility has been pervasive — and often appeared self-inflicted — since President Donald Trump entered office 100 days ago.
Whether due to the administration’s aggressive trade tariff policy, or the president’s jibes and subsequent climbdowns against the US Federal Reserve chair, US stocks and long dated Treasuries have — as Americans like to say — been on a journey.
But there is one corner of capital markets where the US continues to lead the way, and Europe could learn a thing or two.
Earlier this month, US banks emerged from their earnings blackouts and went straight to the bond market to raise funds. There was no dilly-dallying as six major banks barged into the market and raised €30bn in two days.
For investors, the US banks' disciplined approach fostered certainty and confidence.
European banks tend to be more precious and bide their time while they pick the right moment to issue — though it does not always work out right.
A significant backlog of bond issuance from European banks is said to have built up in the pipeline since early February. The issuers' thinking was that ‘liberation day’ would be a non-event and they ought to wait until afterwards — but it turned out they were wrong.
Issuers would be wise to remember that they are price-takers, not traders trying to pick a sweet spot and hoping the market turns their way. And there is no shame in raising cash throughout the ebbs and flows of funding cycles.
There is something to be said for the strict timing US banks stick to, volatility or otherwise — even if it seems unimaginative. European banks might want to consider a similar playbook.