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Premiums may not be at risk of increasing yet but caution should remain the watchword
It will be better for all in the long run if Venezuela can prioritise domestic spending over debt repayments
The rollover risks sovereigns are accepting in exchange for cheaper funding
It's not the juniors in capital markets who need protecting from obsolescence. They stand to benefit most from the deployment of AI
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The battle is heating up over what penalty the US brokers should pay for needing access to the Federal Reserve’s discount window. Remarkably, some voices still argue the dealers can escape being regulated as tightly as banks. That is wishful thinking — their activities affect the whole financial system. If a business is too important to fail, it is also too important to leave alone. And when regulators get tough, the likes of Goldman Sachs will have to accept it just like their weaker brethren.
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Iberdrola, the Spanish utility, has set up a new MTN programme to issue structured notes — something very rare for a corporate issuer. Remarkably, it is outsourcing the treasury function for the programme to Banesto, one of its relationship banks. The initiative’s success is by no means certain, but if it works it could help reinvigorate the structured note market and take banking relationships in a new direction.
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Regulators have called for the rating agencies to form a trade body to represent them. This would make negotiations on reforming the agencies easier. But the agencies are inherently diverse, even conflicting — some, for example, are only paid by investors. Getting them to speak with one voice may be impossible.
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The European leveraged finance market at last seems to have found a way to begin clearing its backlog of unsold loans in a way that pleases everyone. Arrangers of the Boots and Endemol have managed to coordinate between them and discount deals in an orderly way, without forcing all the bookrunners to participate.
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With oil prices driving inflation across Asia, Hong Kong’s move to facilitate Islamic finance in the territory could provide useful insulation from the global economic chills.
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Hands were thrown up in horror around the City at Bradford & Bingley’s decision to cheapen its rights issue, even though Citigroup and UBS had fully underwritten it. But the real scandal is that B&B could have embarked on such an important transaction as a rights issue without scrutinising its core mortgage business more carefully and communicating the results to investors.