-
Egypt’s announcement last week that it plans to issue a $2bn sovereign sukuk was a welcome advertisement that put the country back on the map for investors and underscored the change in its attitude towards Islamic finance. But it should not be hasty. A lot more work needs to be done before Egypt attempts to access this line of funding.
-
With the market rally extending into its second month, it’s logical for the market to be questioning whether the EBA’s 9% core capital requirement is still necessary. Recapitalising is a pain for the banks, and raises concerns over the supply to the real economy. But scrapping the target now would create much bigger problems down the line — for the EBA itself and for the banks.
-
It’s no secret that optimism is hard-wired into syndicate officials. In fact, it’s practically in the job description. Markets never widen. Rather, investors take profit. And when things are tightening by a basis point or two, the market is On Fire.
-
CRD III has given HSH Nordbank’s capital ratios a tough time. Nothing new there, but the effects of resecuritisation rules are perverse, even by EBA standards. The hapless lender has painted itself into a corner but the least the wider market can do is question the EBA’s numbers.
-
The European Central Bank’s long term refinancing operation has been put to good use by the European banking sector. But its lack of discrimination raises dependency and, longer term, increases systemic risks.
-
Moody's reckons the ECB's long term refinancing operation is credit negative for Europe's banks. It's hard to square this with the relief it is providing the sector, but the agency is right to warn of the dangers of relying on central bank funding.
-
French courts threw out contractual rights when they ruled to protect the owners of the Coeur Défense tower from their creditors. But the answer to this isn’t self-righteous indignation. It’s to beware of any market that’s never seen a default.
-
As banks look ahead to the second long term refinancing operation from the ECB next month, recycling that cash into high yielding sovereign paper seems like an obvious strategy. But that does not mean they should.
-
ABS issuers could aim for lower ratings, dropping their fixation on hitting triple-A, Standard & Poor’s suggested last week. Now, thanks to other rating actions, the agency may have a point.
-
Commonwealth Bank of Australia’s ground-breaking Aussie dollar covered bond deal is the story that everyone was waiting for. Its success disproves the conventional wisdom that euros and dollars are the only really liquid markets.