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Will the Bank of England’s latest banking sector policies promote lending to the real economy?

Guest contributor – Mark Robinson (Financial Institutions Analyst, M&G Fixed Income Team)

The Bank of England recently announced two new measures focussed on the banking sector, which are primarily designed to improve monetary policy transmission from banks to households and corporates and, indirectly, are probably intended to stimulate loan growth. In this blog post, I’ll examine these actions…

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could-trumps-brand-affect-bond-prices

Case study: Could Trump’s brand affect bond prices?

Earlier this year I gave a top-down macro assessment of Trump’s potential impact on Latin American remittances, should he become President. As the race continues, I now take a bottom-up micro view and assess Trump’s potential impact on an individual bond issue associated with the Trump Organization.

In 2007 the Panamanian real estate market was growing robustly, with prices experiencing double-…

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brazil-bond-market

The perpetual bond market in Brazil is misrated

In developed markets, the vast majority of perpetual bonds are contractually subordinated, i.e. it is stated in the bond documentation that they are junior to any senior secured or unsecured debt, and as a result they tend to have lower bond ratings than senior bonds in the same capital structure because they have a lower expected recovery value. In emerging markets, however, it is not uncommon…

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Regional unemployment rates across the UK

A vision of the future? Optimal currency areas within the United Kingdom

The year is 2020 and King Henry IX, the recently installed head of state of the United Kingdom of Northern England, Wales and Northern Ireland stands in a room overlooking the Trent River. Most of his subjects still refer to him simply as “Harry”. His popularity with the electorate is seen as a key factor behind the surprise victory for the monarchists in the recent constitutional referendum fo…

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Robert Gordon’s “The Rise and Fall of American Growth”. An interview, and win a copy of his book.

Professor Robert Gordon of North-Western University was in town this week to give speeches at Prospect Magazine (which is ace by the way) and the LSE.  His latest book, “The Rise and Fall of American Growth” was released earlier this year, and is a tremendously powerful antidote to the wave of techno-optimism we might feel when we see shiny electric cars and gadgets coming out of Silicon Valley…

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15.12.18 MR blog

Tough as Granite – an RMBS case study

This weekend the team were doing more than just our Christmas shopping, we were also saying a fond farewell to one of our favourite investments of recent times – our Granite Residential Mortgage Backed Securities (RMBS).

Granite was the name that Northern Rock gave to the vehicle it used to securitise the mortgages that it originated before blowing up in 2007 – when it was no longer able to fun…

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2015-10 blog CC (Argentina) - ENG2

The ABC of Latin American debt: Argentina trip report

I just spent two weeks traveling Latin America around the IMF meetings in Lima. The region is navigating through various shocks: lower commodity prices, deteriorating balance sheets, growth and fiscal deterioration, an urgent need for structural reforms and significant political challenges. There is plenty to write about, so in the next couple of days I will post a series of blogs focused on th…

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2015-10 blog MRu - eng1

IMF/World Bank Autumn meeting notes

Recently Claudia and I were in Lima for the annual meetings of the IMF and World Bank. Unsurprisingly (given the host nation and history of the meetings) the majority of sessions were on the developing world, in particular Latin America. Claudia will shortly be posting a series of more detailed blogs on the LATAM countries she visited, so I’ll focus more globally.

In aggregate, the IMF is predi…

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Brazil is not Russia so don’t expect Brazilian bonds to deliver Russian returns

Brazil is not Russia so don’t expect Brazilian bonds to deliver Russian returns

Brazil has been facing the perfect storm since the re-election of Dilma Rousseff in October 2014 and asset prices in Latin America’s largest country have collapsed. Credit default swaps on Brazil 5-year sovereign debt in US dollar and hard-currency corporate bond spreads widened to as much as 545 bps and 938 bps respectively, as at the end of September 2015, which is higher than during the 2008…

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El Niño is coming. What are the effects on GDP, commodity prices and inflation?

Whilst economic forecasters are currently concerned about falling oil prices and the implications for global growth, weather forecasters worry about the impact an El Niño weather event could have on global weather patterns. In August, America’s National Oceanic and Atmospheric Administration (NOAA) said there is a 90% chance that the current Niño event will continue through the remainder of the…

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