Articles

During last week’s House Financial Services Committee hearing, Holding Megabanks Accountable: A Review of Global Systemically Important Banks 10 years after the Financial Crisis, Representative Jim Himes (D-CT) asked the seven chief executive officers of America’s largest banks “What product, financing mechanism, or market is do you think is generating systemic risk which we should pay attention to?” Almost all of them mentioned that leveraged lending was a top product that we should focus on.

Another week. Another Deutsche Bank scandal. Regulators and legislators globally need to recognize that Deutsche Bank’s recidivism is an illness. Significantly higher fines, sending executives to jail, additional capital and risk management requirements, or closing it down are the only cure.

Deutsche Bank’s risk management capabilities should matter in any country where Deutsche Bank has legal entities. Possible Trump bank fraud raises many questions for legislators, regulators, and taxpayers on both sides of the Atlantic.

Strategic Treasurer and TD Bank’s Treasury Perspectives Survey found that financial and non-financial corporations’ optimism about business and economic conditions has waned in 2019. Additionally, companies have not benefited from Trump’s tax reform as much as they had hoped.

It is critical that legislators and regulators explain to the public what metrics are being used to determine whether indeed Wells Fargo has implemented the laundry list of promises to improve risk management. Mea culpas are insufficient without evidence of contrition that will help those harmed.

In a disappointing decision, the Federal Reserve Board will limit its use of the “qualitative objection” in Dodd-Frank’s Comprehensive Capital Analysis and Review. This reduces transparency to the market about potential risk management and capital planning problems at systemically important banks.

Credit to non-financial corporations and governments in emerging markets has soared over the last decade and is at record highs.  In a low interest rate environment in most advanced economies, lending by both foreign and domestic banks and non-banks to emerging market borrowers is likely to continue rising for the foreseeable future.

Advantages and challenges abound for investment professionals focusing on big data, large data sets analyzed computationally,  and alternative data, data sets obtained from less traditional sources, such as social media, for investment analysis.

A decade since the financial crisis, most financial stability committees (FSCs) and central banks around the world lack key tools to implement important macroprudential policies to insure financial stability.

Metro Bank stock investors reacted fiercely when the U.K.-based bank announced on Tuesday that U.K. regulators, the Financial Conduct Authority and the Prudential Regulatory Authority are investigating the circumstances and events that led the bank to assign much lower risk weights to its mortgage lending portfolio than the bank should have.

A lot more should be done to recruit, retain, and promote women and minorities, not only because demographics in the US have changed significantly, but also because it helps financial institutions’ bottom line. 

With the daily chaos in Washington and policy and political uncertainty in major money centers around the world, it is no wonder that divining the direction of currencies, has become a full-time profession for many. This year’s annual  TradeTech FX conference assembled numerous foreign exchange professionals to debate the direction of the U.S. dollar against G-10 and emerging market currencies. 

Competition from large, established technology companies (BigTech) and financial technology (FinTech) could put pressure on the profitability of financial institutions and lead them to take on more risks to protect their margins.

In ground breaking research that has significant implications for U.S. policymakers and financial institutions, Peterson Institution for International Economics (PIIE) researchers found that “The Hispanic community in the United States has contributed significantly to US economic growth in recent decades and will continue to do so over the next 10 to 20 years.”

The number of futures and options traded on exchanges around the world rose 20.2% to 30.28 billion contracts in 2018. This record high was primarily driven by exchange-traded derivatives transactions in Asia-Pacific and South America. Since the financial crisis, exchange-traded derivatives volumes have risen 71%.

About $1.4 trillion in institutional leveraged loans, or loans purchased by institutional investors other than syndicate banks, was estimated to be outstanding globally as of October 2018. A big challenge, however, is that certain data and statistics (particularly those regarding the end-investors’ holding of leveraged loans) are not readily available; hence the FSB estimates based on a range of public and regulatory data.