Credit Risk Improving In High Quality Asian Banks
At the recent RiskMinds Americas conference in Chicago, a number of presentations suggested that the banking industry is in better shape, overall, than it was in 2006-08. Withdrawal from non-core markets, a strong focus on cost control, and a rebuilding of capital reserves have eased concerns about the systemic impact of a future crisis. Asian […]
Colombia – Peace Deal Could Enhance Credit Position
Colombia’s many economic and political advantages have been overshadowed for decades by the long running war with various rebel groups. The recently agreed peace deal could be the beginning of a new era. Colombia’s recent peace deal with the FARC rebels should bring an end to decades of political violence in the country, and the […]
Poland, Belgium Credit Split Shows Power Of Politics
Poland’s credit standing is going down while Belgium’s rises. The divergence is mostly political. Poland’s economy is healthy and debts are low but the ruling populist party makes analysts nervous. Belgium’s many divisions mask a uniform commitment to fiscal restraint. In the world of sovereign credit risk, politics can matter more than anything else. The […]
Fiscal Aggression Could Threaten Sovereign Ratings
Sovereign credit ratings have been buoyed up for years by the belief that no matter how much governments actually borrowed, they were committed to coming close to balanced budgets as soon as was prudently possible. That commitment may now be wavering. The anti-deficit rhetoric never meant that governments abandoned their responsibility for cooling and warming […]
Referendum Harms UK More Than The Pound
The UK’s currency remains very volatile post-Brexit, but may be recovering. The country’s credit rating may suffer more permanent damage. As yet, the credit world has been cautiously negative about the June 23 referendum on quitting the European Union. Both S&P and Fitch downgraded the UK’s sovereign rating to AA (a notch below Moody’s) just […]
Oil And Gas Credit Consensus
Oil and Gas credit consensus isn’t following the price up The oil price has been trending sharply upwards for most of 2016. Even with a 10 percent dip since the June high, Brent crude is up about 50 percent since the beginning of the year. U.S natural gas prices have also recovered, although somewhat more […]
Pension Deficits Are A Growing Source Of Credit Risk
This blog discusses the scale of the global pension funding crisis and highlights the risk to Sovereign credit ratings. This week the main holders of Gilts refused to co-operate with the Bank of England. The post-Brexit QE stimulus relies on pension funds and insurance companies selling Gilts at attractively high prices and low yields; but […]
Credit Volatility And The VIX
This blog reports on the volatility of credit estimates measured by Credit Benchmark, compared with equity market volatility measured by the CBOE Volatility Index (the ‘VIX’). The two measures have recently shown a sharp divergence. This week, S&P Global Ratings reported that U.S. companies are as vulnerable to defaults and downgrades as they were leading […]
EU Stress Tests And Spanish Banks
The 2016 EU-wide stress test results covering 51 banks were published last week. Credit Benchmark data shows a clear relationship between risk and CET 1 ratios, especially under the Adverse scenario. The stress test results can be interpreted in a number of ways, but the key messages are clear. The actual capital position of these […]
Hurricanes And Credit Risk
The Southeast U.S.A. is in the middle of its annual hurricane season. In this blog, we look at the impact that a severe hurricane could have on a range of companies, depending on their credit risk and their geographic location. For the past few years, hurricanes in this area have been mild and infrequent; and […]
