Free content

For many years, corporate debt investors have scratched their heads and wondered: will anything, ever, cause the returns on bonds to go back to normal again?

Luckin Coffee seemed too good to be true. It was.

The government’s response to the coronavirus has forced me to spend more time at home. Unfortunately, my wife is doing the same thing.

The way Asian states including China have dealt with the coronavirus has put Europe and the US in the shade — now they should lead the international financial fightback.

Outrage has erupted among US progressives at efforts from the private equity industry to ensure their portfolio companies get a piece of government support for corporates. The buyout barons don’t do much to endear themselves to the public, but sponsor funds are just another legal vehicle for owning equity — and there’s no point punishing a company for its owners.

In this round-up, China announces a reserve requirement ratio cut for small banks and a reduction on the interest rate for excess reserves, Bank of Jinzhou will sell some of its assets at a steep discount and the Chinese securities regulator condemns Nasdaq-listed Luckin Coffee for faking its sales record.

In this round-up, the Caixin manufacturing Purchasing Managers’ Index (PMI) rebounded to above 50 following a V-shaped recovery in official PMIs, and US-listed Luckin Coffee saw its share price plunge by 75% after admitting to fabricated sales.

Armies of wonks have spent the last 10 years dreaming up a panoply of bank capital tools, from additional tier one capital to MREL, to make sure “too big to fail” can never happen again. Next time, they claimed, private investors’ capital would be burnt in an orderly process, saving taxpayers from bailing out banks.

Investment bankers are now working from home en masse. That can lead to occasional moments of embarrassment.

Rising dollar funding costs for Taiwanese banks have made them push an existing borrower back to the negotiating table so that they can demand better returns on a loan. More worrying than the triggering of the market disruption clause, however, is the volatility that forced the move.

China’s State Council has unveiled details on yet another stimulus package to support its economy, including more local government bonds, lower interest for loans and a potential cut in the reserve requirement ratio for smaller banks.

If regulators won’t turn off banks' additional tier one capital coupons during the coronavirus crisis, they will never find reason to.