Search results for

There was a huge rally in global equities in the middle of October after markets reached six-year lows. The catalyst was the third-quarter earnings reports of US corporations. Most seemed to beat consensus forecasts.

At the start of the year Lucine Kirchhoff took a bold position. The price of high-grade loans, she said, was destined to increase: "Look for investors to focus more on drawn pricing to compensate for the appropriate risk they are taking," said Kirchhoff, the head of loan syndicate at Banc of America Securities. It would be a similar story for undrawn costs. Higher pricing ought to have been inevitable given the recession, a rise in defaults, rating-agency downgrades and fallen angels, and the uncovering of corporate frauds. Banks would surely be looking for a much better return for the risks they were taking, which would imply a wholesale change in prices rather than just a slight increase.

Ambitious efforts are under way to bring order to sovereign debt work-outs. But private-sector lenders just don’t see what problem the IMF’s sovereign bankruptcy court is supposed to solve. Felix Salmon reports

The International Accounting Standards Board is planning to change its approach to the treatment of assets in securitizations. But many feel the new proposals don’t improve on the confusion they replace

Nordic mortgage bonds have been tipped as a major growth area for some time. Denmark and Sweden in particular have long-established, stable markets that have been steadily attracting interest from outside over the past few years. Swedish mortgage bonds are not strictly covered, since the collateral loans remain on the issuer's balance sheet. Many covered bond participants see them as still primarily a domestic play with sporadic foreign interest at best. But bankers in the Nordic markets say the paper is attracting more and more demand from non-traditional buyers. The Danish market's long end is made up of callable bonds similar to the most liquid part of the US MBS market. It has long attracted considerable interest from US accounts, which find the callable structure comfortably familiar. In 1997 and 1998, these accounts started taking big tickets in long-dated Danish paper. Many of them were hurt badly by the Danish mortgage crisis. US accounts retain a large share of the market and trade actively, but are no longer net buyers. The high option-adjusted premia that originally attracted them have now fallen slightly.

Investment bank research is bad for your health, says one of Asia's top bankers.

As volumes and margins fall in conventional sales, trading and new issues, leading equity firms are desperate for new sources of revenue.

Large investment-grade corporate borrowers have increasingly turned to securitization as rating downgrades and investor risk aversion have pushed spreads on normal bonds to junk levels. Can asset-backed markets meet these giant issuers’ funding needs?

Foreign exchange

Lehman Brothers found itself at the centre of embarrassing public revelations last month when a chef formerly employed by the bank challenged the terms of his dismissal and implied that loose morals were inherent to the firm's culture.

The Turkish banking sector is undergoing a revolutionary transformation. For decades the playground of crooked bankers and the politicians and bureaucrats they funded, the sector is now being cleaned up.

While many bankers are tightening their belts in the expectation of tiny Christmas bonuses, some are still merrily living it up. One trader flew the flag recently by hiring out the Café de Paris for his birthday bash (house champagne: £350 a bottle).