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The European Central Bank owns 15% of eligible benchmark covered bonds since its third purchase programme (CBPP3) began. It could end up owning 40%, which could permanently disrupt the market.
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Euro benchmarks from the Gulf are rare but this is the right time for that to change.
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Financial innovation deserves scepticism, especially unregulated investments offering retail investors supposed juicy returns. But while P2P lending merits scrutiny, it is both less useful, and less dangerous, than banking.
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A greenshoe clause in two tranches of UBS’s recent additional tier one (AT1) deal was a welcome development for a market that needs lower volatility and more confidence.
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Don’t be distracted by the razzmatazz. Peer-to-peer lenders walk like banks and quack like them. As a retail bond offering from Wellesley & Co in the UK makes clear, bankishness is one of the best things about P2P. But don’t go thinking the risks are the same.
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Don’t be distracted by the razzmatazz. Peer-to-peer lenders walk like banks and quack like them. As a retail bond offering from Wellesley & Co in the UK makes clear, bankishness is one of the best things about P2P. But don’t go thinking the risks are the same. -
The Monetary of Singapore (MAS) has put out a new consultation paper on covered bonds that aims to clear up several outstanding snags that have held back banks from issuing. But while the MAS has correctly pinpointed most of the problems, what it really needs to tackle is the sticky issue of who has first claim on the asset pool.
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“Competition is the DNA that flows through the veins of every loans banker,” said Roland Boehm in a rousing speech at GlobalCapital’s Syndicated Loans and Leveraged Finance Dinner last week.
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Covered bond yields continued to tumble this week with coupons from German and French euro issuers skimming just above zero, at 0.025% and 0.125% respectively. Meanwhile, in Switzerland the first Swiss franc covered bond was issued with a negative yield of 0.37%. The deals may be good news for the issuers concerned, but investors are hurting. And by forcing them down the credit curve the seeds of the next crisis are potentially being sown.
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The plight of Raiffeisen Bank International has been horrifying and fascinating for the central and eastern European loan market over recent months and its disclosure of a big earnings hit will have been watched closely by other Western banks with heavy exposure to Russia and Ukraine. But RBI’s problems are its own and do not — yet — suggest a crisis in the Russia business for other lenders.
