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We entrust our precious working capital to banks; they finance our dreams and provide revolving credit to get us through our nightmares.
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The principle of pari-passu among bondholders lays dead and buried. The Bank of Portugal’s decision to select only five of Novo Banco’s 52 senior bonds for bail-in last week has established a new precedent for bank resolutions, and what a fine mess it has created. -
The green bond wave is set to rise higher in 2016, but as before, most of the deals will not help the environment much. One bond that did was sold in the closing days of 2015 — but such deals are still bought only by a small fraction of investors.
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KfW will use sustainability criteria when choosing leads for its green bonds. It is a logical and welcome step.
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The covered bond market experienced a surge in supply this week, confounding expectations, and illustrating how important it is for issuers to seize unusual funding opportunities.
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The Basel Committee has had a charming festive tradition in recent years, dropping a major update to bank capital regulation in the week before Christmas. Big banks should expect a festive regulatory treat this year too.
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A group of companies has committed to the Science Based Targets Initiative drive to reduce their carbon emissions at the kind of fast pace required to make a real difference to global warming. Initiatives like these are valuable, and begging to be supported by capital markets investors.
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With central bankers, it is all in the nuance. “Do what we must” sounds an awful lot like “whatever it takes”, but as of Thursday it means a very different thing.
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Policy makers and regulators don’t like risks, which is why they keep attempting the impossible — regulating them out of existence. The most recent example comes in the form of the European Commission’s Prospectus Directive III.
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Transparency has been among the top priorities of regulators and policy makers in the post-crisis era, but they don’t seem to understand what kind of information is important or when it becomes so.
