Cyprus Peace Talks Face Growing Obstacles But Success Would Improve Credit Standing
Cyprus is steadily recovering from its recent financial difficulties. Despite being downgraded to junk during the 2012/13 financial crisis, it has managed to exit the EU-led rescue package, and re-started bond issuance in 2014. Earlier this month, the Bank of Cyprus (the largest commercial bank) announced that it had fully repaid its EUR 11.4bn emergency […]
US Corporate Credit Deteriorated Last Year
The U.S. Federal Reserve started the long process of normalizing interest rates in late 2015. But with the US economy growing by a lacklustre 1.6% in 2016, and inflation at a benign 1.3%, Yellen chose to wait a full year before the recent hike in December 2016. With President-elect Trump keen to change the composition […]
Despite A Year Of Negative Headlines, Banks Are Measured On Russia
Over the course of 2016, Vladimir Putin’s Russia has rarely been out of the headlines, and it’s seldom been positive. In late December, the Russian ambassador to Turkey was killed in an attack allegedly related to Russian involvement in Syria; and this is not the first time that Putin’s continued backing of Bashar al-Assad has […]
Sovereigns Show Higher Risk Premiums Than Corporates, But The Gap Is Closing
2017 is likely to be a year of fiscal expansion across a number of developed economies. Low interest rates are losing effectiveness in a growing number of economies and the Fed may resume its rate rises this week. But the ECB package announced last week shows that some Central Banks still see a role for […]
Banks Take Italian Referendum Risk In Their Stride
Italian Sovereign bond yields have been trending higher ahead of the referendum on Sunday which may decide the fate of Renzi, the reforming Prime Minister. They are currently showing that ‘No’ is ahead by 5-7 points, but this is a year when political polls have been proven wrong more than once. Although Renzi’s reforms are […]
FTSE100 Credit Risk Steadily Increased In Q2 And Q3
The FTSE100 has gained around 10% since the Brexit vote. This is driven in part by Sterling weakness, which has brought an immediate currency translation benefit to the numerous overseas earners in the index. Recent company results have highlighted volume winners such as Burberry, who have seen overseas buyers taking advantage of the weaker pound; […]
Global Banks Have Revised The Credit Standing Of The US Government Down By One Full Credit Notch
Although the U.S. Election is too close to call, financial markets have made their opinions clear, becoming increasingly nervous whenever Trump erodes Clinton’s lead. Global banks turned cautious in June, and have stayed that way. The consensus crowd-sourced view moved the US Government down by one full credit notch. And unlike financial markets, that single, […]
Latest White Paper On Credit Transition Matrices Now Available To Download
For CECL and IFRS9 accounting, the choice of credit transition matrix and default probabilities is crucial and may have a significant impact on the final reserving required. The latest Credit Benchmark white paper demonstrates some of the key issues in choosing credit transition matrices: Market-implied PDs contain significant risk premiums, depending on credit category: these will […]
Banks Cautious On Credit Risk – Downward Revisions Outnumber Improvements.
We have just published credit data for September, with 11 contributor banks now providing crowd-sourced credit views CBCs* on more than 6,000 separate legal entities. Sovereign coverage now includes Barbados, Jamaica, Panama and Albania. Other additions include the New York Metropolitan Museum of Art, Ralph Lauren, Kraft Heinz, and Netflix. Over the month, 173 obligors improved their […]
CECL And IFRS9 Fuel Demand For Credit Data
Banks are gearing up for major accounting changes over the next few years. Credit risk and modelling teams are now working with accounting policy divisions to draw up implementation plans for Current Expected Credit Loss (CECL: US) and International Financial Reporting Standard 9 (IFRS9: ex-US). Details can be found here on the ABA website and here on the […]
