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The spread between the weakest and strongest covered bonds is tighter than at any point in the last five years, thanks to the European Central Bank’s backstop bid. But just because the ECB is willing to buy anything and everything that qualifies as a covered bond, that doesn’t mean investors should.
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FX and macro volatility is back in a big way, so the succession of miserable quarters in fixed income, currencies and commodities should be over. But investment banks have not fixed long running problems with the business.
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The Bank of England's new template for stress testing UK banks might be an improbable collection of fat tail events. But there's an important, and probable, risk missing from it.
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Deutsche Bank’s head of Swiss DCM, Maroan Maizar, recommended this week that the Swiss authorities ban retail investors from buying Swiss contingent convertible bonds, ensuring that only the “best” investors have access to such instruments.
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Social responsibility means accountability, and accountability requires transparency. Even where socially responsible issuers show what they have funded, investors need comparisons to prove they have done some good.
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Greece’s euro-denominated future hangs in the balance. Greater integration and less sovereignty is needed to save the European project, but the ideological gap between Greece and Germany shows it will be nearly impossible to achieve.
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Investors in bank senior unsecured bonds have sailed through most of the crisis believing they are safe from haircuts if the bank fails. They’ve been wrong before, and as time goes on, it should be ever more clear that they face real credit risk.
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When former Rabobank analyst Olly Burrows’ wife and one of their four children came home early to find a burglar trashing their upstairs bedroom, it was not funny.
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Covered bonds and RMBS share important similarities which both the European Central Bank and Bank of England acknowledged last year in a discussion paper. As the two asset classes evolve, their vastly different regulatory treatment should become more difficult to justify.
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Burning plants sends CO2 into the atmosphere – any 10 year old knows that. Yet thousands of bigwigs have convinced themselves otherwise. Don’t let the bond market make the same mistake.