Monthly Archives:

July 2010

An update on the European bank stress tests

Guest contributor – Tamara Burnell (Head of Financial Institutions, M&G Credit Analysis team)

The publication of the Committee of European Banking Supervisors (CEBS) stress tests proved exactly the damp squib that most had been expecting. There was some additional useful disclosure on sovereign risk exposures (apart from a few German banks) but a decided lack of rigour in the regulatory approac…

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Fixed interest markets performance review year to date – some interesting results

We have now passed the halfway mark of 2010 and we thought it would be interesting to put together some figures to show how various bond indices have performed year-to-date (as at July 13). BofA Merrill Lynch provide an excellent download service via Bloomberg which has allowed us to extract the data in the following table. Interestingly, in this perceived world of risk on/risk off, performance…

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EU bank stress tests increasingly farcical

Guest contributor – Tamara Burnell (Head of Financial Institutions, M&G Credit Analysis team)

Press reports following the meeting of EU finance ministers yesterday suggest that the eagerly anticipated Committee of European Banking Supervisors (CEBS) bank stress tests will be extremely “unstressful”. There’s talk of government bond holdings only being stressed for “market price volatility” if he…

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UK inflation falls, but potentially worrying signs

The good news was that UK CPI fell from 3.2% to 3.1%.  The less good news was that this was 0.1% higher than expectations and remains above the 3.0% upper bound (inflation hasn’t been below 3% since December last year).  The worrying news was that the Core CPI measure, which excludes food, alcohol, tobacco and energy prices, jumped 0.2% to 3.1%, and was 0.3% above expectations. Core inflation s…

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UK linkers becoming stinkers

In the recent emergency UK budget it was announced that public sector indexation would change from RPI to CPI from April 2011.  Now, the government is proposing moving private sector schemes and the Pension Protection Fund (PPF) indexation to CPI too.  As Pensions Minister Steve Webb argued, it makes sense switching to CPI as it’s the measure that the BoE targets and (slightly more dubiously) C…

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