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The ‘mortgage prisoners’ fiasco has made it easier for MPs to demonise useful financial tools. While thousands of mortgagors cheer at the news they are about to be freed from their loans, the Financial Conduct Authority's (FCA) support has come in too late to undo the reputational damage done to useful parts of the capital markets. -
The World Bank’s pioneering pandemic bond has failed to recognise what the World Health Organisation has said is the second largest Ebola epidemic ever, which took place in the Democratic Republic of Congo. This is a gross failure, but the jury is still out on using such instruments to fund disaster response in the developing world.
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The Bank of England should extend Libor beyond its set date of 2021 — or risk financial institutions setting their own rules.
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Moody’s has downgraded Ford Motor Credit Company from investment grade to a junk rating. It is not the only auto manufacturer to run suffer a prang, however, and as more securitization issuers move into the autos sector, UK market participants need to be wary of history repeating.
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Despite the agony of Brexit, the UK has been making impressive strides in turning away from climate change. The government's new Green Finance Strategy is the latest. It goes in the right direction, but unfortunately is less a leap, more a shuffle.
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While the cult of the environmental, social and governance-linked (ESG) bond has gone from strength to strength in investment grade markets, with dedicated bond funds, attempts to build risk-free green curves and more than $100bn of issuance per year, the leveraged finance market — in loan and bond form alike — has been a laggard. But it’s where the rubber (from sustainable sources) really needs to meet the road.
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Six months into its inception, the ‘simple, transparent and standardised’ (STS) securitization framework seems to be doing its job. It has successfully established a market set to inherit the majority of ABS issuance, with issuers noting a raft of new investors operating in the sector. But have those buyers made a wrong assumption about how the ECB views STS deals?
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The suspension of the Woodford Equity Income Fund and the collapse of London Capital & Finance show how retail investors lack regulatory protection. This is strange, when a source of safer returns — bonds issued by large banks — is often deemed too complex and risky for the ordinary person to invest in.
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Greek stocks and bonds jumped this week on the news of a bad result for governing left-wing party Syriza in the European elections and the announcement of a snap national election, increasing the prospect of pro-market and centre-right party New Democracy taking power soon. But the revision of asset valuation on the back of this doesn’t add up.
