Morgan Stanley

Liability management for financial institutions has had a quiet time of it in 2015. Banks spent the post-crisis years buying back debt to generate capital, and will spend the years ahead fitting their capital stack to the new regulatory reality. But for now, the market is becalmed. Owen Sanderson reports.

As regulators have looked to make banks bankruptcy-proof in the years since the financial crisis, bank capital investors have been forced to adapt quickly to new layers of protection. For seasoned buyers, the disruptive force of the Financial Stability Board’s rules on total loss-absorbing capacity (TLAC) is simply the next challenge.

Banks have cleaned up and found an investor base for billions in new age loss-absorbing capital, but with regulators putting the finishing touches to the post-crisis framework, there is no shortage of challenges ahead, writes Tom Porter.

Banks across Europe are coming to terms with the severity of new capital regulations. The problem now is: what, exactly, are those terms? Graham Bippart reports.

The banking sector has already gone through much of the confusion of its own regulatory overhaul, with once exotic instruments like additional tier one becoming practically mainstream. With Solvency II on the horizon, it’s now the insurance sector’s turn, writes Nathan Collins.

European banks have rolled up their sleeves and got on with the job of issuing loss-absorbing instruments to meet the new capital demands of Basel III, with another €80bn of capital printed across additional tier one (AT1) and tier two in 2014. AT1 accounted for 48% of capital volume in 2014 as banks made strides towards filling their 1.5% of risk weighted assets bucket. Still more banks have made debuts in the AT1 market in 2015 and many early issuers are expected to return to take advantage of cheaper pricing later this year.

Europe’s idiosyncratic post-crisis bank capital structures may be tough to navigate, but investors have wised up and with volatility declining, real money is running out of excuses to stay away from additional tier one, writes Tom Porter.

Just as Europe’s banks were really getting stuck in to their post-crisis regulatory capital requirements, rulemakers have thrown them another curveball that will define issuance patterns for the rest of the decade, writes Tom Porter.

Friday was a great day for Flow Traders to make its stockmarket debut. You might almost think they were traders. The Euro Stoxx 50 index opened 1.6% up as hopes rose of a debt deal for Greece, and doubled that gain by the afternoon. With that wind in its sails, Flow Traders zoomed up 14%.

Guarantor: Federal Republic of Germany

Peruvian development bank Corporación Financiera de Desarrollo (Cofide) attracted more than $2bn of orders for an $800m dual tranche bond offering on Tuesday, jumping into a short lived window of market calm.

Germany’s KfW is to become the first borrower to sell a fixed rate dollar benchmark since negotiations between Greece and its creditors broke down at the end of June.