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LATEST ARTICLES
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Compressed yields and high valuations in many asset classes are leading more fund managers to employ greater leverage to juice their returns to investor clients.
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Despite falling yields on Greek government bonds and renewed interest from international investors, the dire economic outlook and inability to reduce its debt burden means Greece is years away from being able to issue sovereign debt, according to analysts.
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Regulation of the global repo market is inching closer – particularly in the US – but is hindered by a lack of consensus on how to proceed internationally, as well as the oft-touted concerns about the impact on credit flows to the real economy.
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All issuers should be looking beyond the US dollar when seeking new financing. Alternative currencies can bring several advantages, including lower funding costs and greater flexibility.
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Middle East businesses are borrowing more as the long-term nature of the burgeoning bond markets brings a greater sense of comfort. They must reveal all in the public documents needed to access those markets, initially an uncomfortable experience for many. But the better financing mix is worth it.
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Basel III, Dodd-Frank and market pressures are forcing banks to bolster their tier 1 and loss-absorbing capital levels on their balance sheets, a process that is under way but far from complete. There are few palatable options on the capital-raising menu.
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European pension funds and insurance companies face years of diminished returns because of artificially low yields on long-dated debt. Investors should consider strategies now so that they can mitigate losses when yields start to rise again.
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Mergers and acquisitions have undergone a paradigm shift as far as some are concerned, with bond issuance fast becoming the default funding source, but others say bank lending can still give debt a run for the money.
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Companies across the globe are increasing their use of so-called “cloud solutions” for handling payments. Europe leads the way, driven by the need to meet upcoming changes to regulation, but many are now embracing the benefits to secure a broader competitive advantage. Etienne Bernard, Head of Transaction Services, EMEA at RBS, says the opportunities are limited only by companies’ aspirations.
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Three years on from the infamous flash crash of 2010, there is relief for some that speed limits do not feature in new European rules on high-frequency trading, but others now see a gap in the market for a slow lane.
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Companies are turning to bonds to fund their acquisitions as part of unprecedented change in financing across Europe.
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Record low yields in emerging market local currency debt is fuelling concern among some investors over a bubble, but analysts and asset managers insist the growth picture and slow inflation in many core EM economies justify increased allocations.
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European and Basel forbearance on trade finance regulations will reduce, at the margin, borrowing costs for the larger corporates but for SMEs the challenge of accessing capital will remain undiminished until the banking sector is re-capitalized. Meanwhile, creative financing solutions are afoot.
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Republicans and Democrats seem to be inching towards to a deal that would raise the United States’ debt ceiling and avoid a damaging government shutdown – or even a sovereign default – a senior Republican strategist has told RBS.
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Emerging market sovereign bonds are overvalued by an average 5 per cent and are due a correction as US monetary easing nears its end. Emerging European debt looks most at risk of a sell-off, RBS analysis shows.
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Technology that joins up every stage of a trade and brings together a wealth of data will one day help businesses make fast financing decisions and borrow cash the moment they need it.
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China has been inching towards full currency convertibility – and perhaps reserve currency status for the renminbi – with a number of developments that amount to an acceleration in its trade liberalisation programme. FX swap lines are largely symbolic but yield practical benefits in liquidity crises.
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For some, citing weak growth and fiscal cuts, there is seemingly no end in sight to quantitative easing in the United States, while others argue rates can no longer decouple from improving economic fundamentals. The Fed has sent mixed messages about its monetary policy course, heaping on allocation risks.
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Harmonised payments across Europe will not meet the goal of launching by February 2014, because some countries are taking advantage of a two-year extension to the deadline for adopting agreed standards. Businesses still need to adapt to a single system for processing payments across Europe, and they will initially handle data in different ways from country to country.
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Emerging Asian economies concerned over the impact of capital inflows from Japan, thanks to the latest bout of quantitative easing, are breathing a collective sigh of relief: the expected tsunami has failed to materialize to-date, an apparent boost to Asian price, FX and financial stability.
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Just months into Japanese prime minister Shinzo Abe’s master plan to end deflation and kick-start the economy, the jury is out on whether he can succeed.
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UK companies will likely be able to trade with China more freely under a proposed currency swap agreement between the countries’ central banks. John McCormick, Chairman of RBS Group Asia Pacific, says the first renminbi bilateral swap line between China and a G7 country could be the largest yet at about CNY450 billion.
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Declines in the value of the currencies of commodities-producing countries might signal the beginning of the end of the commodities super cycle, analysts say, but equally they could represent a shift in patterns of investment flows.
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The bail-in imposed on depositors of banks in Cyprus in March was a new paradigm in resolution mechanisms, and has raised concern among European corporates that money in the bank is no longer a sure bet.
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Punting on the sustainable growth rate of emerging Asian economies in the coming decades - a development that will profoundly reshape the global economic order - is a trillion-dollar wager.
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China is keen to control the expansion of its foreign exchange reserves, but faces headwinds arising from the twin problems of its export-led economic model and policy in respect of the yuan.
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The plethora of complex and sometimes overlapping bank ring-fencing schemes being pursued around the world is creating uncertainty in the industry and apprehension among its detractors.
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New liquidity rules could increase the cost of cash management and dent returns on corporate deposits. As a result, companies will require more sophisticated working relationships with their core banks, says Steve Everett, Global Head of Cash Management at RBS.
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The blame for Cyprus’ economic crisis lies squarely with the island’s previous administration for acting too slowly, exaggerating the problems and shifting blame to the banking sector, a former Cyprus Central Bank governor has told RBS.
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Policymakers around the world risk catastrophe unless they turn off the electronic printing presses and accept the pain of rebalancing their budgets, investor and author Jim Rogers has warned.