Anyone monitoring the risks in the global financial system knows that those of us who lend to banks are increasingly asking for some kind of security in order to do so. Issuance volumes for covered bonds have increased and more countries have recently passed covered bond laws or are in the process of debating legislation. Andrew Haldane, Executive Director for Financial Stability at the Bank of…Read the article
So some panic buying of petrol in March saw UK retail sales grow 1.8% from February and almost certainly means that the first quarter of 2012 will see positive GDP growth. As the final quarter of 2011 was negative for growth, this means that we’ll probably avoid the two consecutive quarters of falling growth that would have meant we were back in recession.
But a couple of things make me nervou…Read the article
The next three weeks will mark uncertain political times in the eurozone. We could see the election of Francois Hollande as the next French president, the first multi-party coalition in Greece as well as some serious debates about early general elections in Germany. An Irish referendum on the eurozone fiscal treaty – and consequently Ireland’s role in the eurozone – will follow shortly after, b…Read the article
Jim recently discussed the merits of officially cancelling the gilts bought back through QE, so I thought I would discuss another option that maintains the status quo through the Bank of England (BoE) simply rolling over the QE gilts into new gilts at maturity.
In order to understand the results of this process it is useful to re-examine how QE works.
Simply, QE is the willing exchange of gilts…Read the article
This week saw Deutsche Bank publish their 2012 Default Study, aptly subtitled ‘5yrs of crisis – The default bark far worse than the bite..’ The annual piece is particularly interesting, especially because the market now has five years of data since the onset of the great recession.
At the risk of failing to do an in-depth report justice it drew out several significant points for credit investor…Read the article
The UK sits unhappily at the very boundary of what debt burden is acceptable for a AAA rated economy. If growth continues to disappoint, or if more austerity becomes socially impossible, the UK will be downgraded – and neither of these possibilities look very remote.
At the moment the UK public sector net debt to GDP ratio is about 63%, equivalent to about £1 trillion (these numbers exclude th…Read the article