Articles

Not only is the Russian sovereign under significant economic pressure, so are over 100 Russian municipal, government related, corporate, and financial institution issuers. They are rated CC or C, barely above default status. Read more here.

Here we are in 2022, and sadly, we are still in a situation where there is tremendous opacity in the global financial system. If it were just rich investors losing money, the vast amount of the global population would hardly lose sleep. However, when financial institutions lose money, they invariably impact unsuspecting citizens. Read more here.

Bank executives should not have it both ways. Either they are compliant with Environmental, Social and Governance (ESG) standards or they are not.  Numerous internationally active banks with credit and market exposures to Russia have not announced yet if they are closing their offices. And banking personnel continue to invest in Russian stocks, bonds, and other financial assets. Read more here.

In just one week, Russian President Vladimir Putin has caused hundreds of deaths and wreaked havoc in the lives of millions. He has also begun the destruction of the Ukrainian and Russian economies. Making Russia a global economic pariah is a dubious achievement, and it will take years for the citizens of both countries to recover. Read more here.

The Bank of Russia is desperately trying to prevent a run on Russian banks. Today, the Russian central bank announced that it would lower reserve requirements for banks. Central banks around the world require banks to have reserves at their central bank in order to protect them and their depositors from a bank run. Lowering reserves for Russian banks is a clear sign that Russian banks’ liquidity is decreasing.  The central bank announced that the liquidity gap in the Russian banking system is now $68 billion dollars, a 27% increase in the gap in just one day. Read more here.

Russian President Vladimir Putin’s brutal, unprovoked invasion of Ukraine is bringing the Russian economy to its knees. Nothing tells the world faster what investors are thinking than the world’s largest financial market, the foreign exchange market. This $7 trillion daily turnover market is incredibly sensitive to country and economic risks. The ruble was stable after Russia sent troops to the Donbas region of Ukraine on February 21 and even when it invaded Ukraine three days later. Read more here.

To balance the budget, as is required by law in 49 states, elected officials have not included the true costs of the government in their budget calculations and have pushed costs onto future taxpayers Read More

For the first time in history, the U.S. leveraged finance market is over $3 trillion. The vast majority of leveraged loans are covenant lite and the major issuance in high yield bonds is in the B- category. Read more here.

For three decades, Eric Orts has been researching, publishing, and teaching about climate change. Now, he is ready to take his passion, experience, and expertise to Washington. Read more here.

With rising climate change and cybersecurity risks, which can significantly disrupt financial institutions, legislators and financial regulators urgently need to be more focused on financial markets infrastructure companies (FMIs). Read more here.

The Fitch U.S. Leveraged Loan Default Insight released today by Fitch Ratings, shows that the energy sector’s trailing twelve-month default rate now stands at 9.1%., in comparison to 11.8% in June. This is the first time that the default rate is below double digits since April 2020, and at a far lower level than its 20.3% default probability peak in March of this year.   Read more here 

The BIS report also points out that “by now, it is clear that cryptocurrencies are speculative assets rather than money, and in many cases are used to facilitate money laundering, ransomware attacks and other financial crimes.  Bitcoin in particular has few redeeming public interest attributes when also considering its wasteful energy footprint.”   Read more here

“We haven’t had to face a significant cyber event from a financial stability standpoint, and I hope that we don’t. But that’s the thing that I worry the most about.” Read more here.

The March 2020 turmoil has underscored the need to strengthen resilience in the non-bank financial intermediation (NBFI) sector. The impact of COVID-19 has highlighted vulnerabilities in the sector stemming from liquidity mismatches, leverage and interconnectedness, which may have caused liquidity imbalances and propagated stress during the ‘dash for cash’. Read more here.

It is critical for legislators, central bankers, and financial regulators to coordinate globally the implementation of Central Banking Digital Currencies (CBDC) in order to promote cheaper, faster, inclusive, and more transparent cross-border payment services. Many central banks are comparing and contrasting the advantages and disadvantages of several CBDC designs; however, their focus has been primarily on domestic use. Read more here.

The Financial Stability Board’s analysis identified the limitations of existing data and encourages authorities to work together to develop a concrete plan to rectify the limitations, while taking into account the specific circumstances of each country. Addressing such data gaps will enhance the assessment and monitoring of climate-related risks to financial stability and enable market participants to incorporate climate-related financial risks more effectively in their decisions, including the pricing of credit and allocation of capital Read more here.