Sovereign Debt
The jury is still out as to the overall effect of this regulation, but a recent report demonstrates that the clamor for more regulation, as well as the industry push-back, is all too often overdone.
As the economic crisis play out in Europe, an important question for investors is how sovereign debt exposure may have affected the recently reported performance of systemically important banks.
Cyprus is ponderously pondering how to fill a gaping financial hole, including whether and how much to appropriate from its depositors, domestic or otherwise. Ohio, having solved its budget crisis, is considering a regular tax on savers and investors to broaden its tax base and prevent a recurrence of the $8.8 billion budget deficit it had eliminated over the past two years.
With the Dow flirting with 14,000, some say the big gains for 2013 may already be in unless Main Street investors are set to join the party. Which brings us to the all-consuming question: What can investors expect in 2013?
According to survey results, EMEA CFA Institute members are more optimistic about the global economy than the rest of the world and, not surprisingly, more pessimistic about the prospects for Europe still lurching towards some remedies for the sovereign debt and banking crises.
The worsening of the sovereign debt makes it necessary for EU leaders to take bolder steps to tame it. Agnes Le Thiec, CFA, examines possible options from an investor’s perspective.
Vincent Papa, PhD, CFA, examines the link between sovereign debt and bank risk; capital requirements for the banking industry; the need to improve transparency for derivatives; and other systemic risk issues relating to banks.
As the debt crisis worsens in Spain and Italy, increasing the likelihood of a partial breakup of the eurozone with disastrous consequences, a draft report discussed in European Parliament urges Member States to seriously consider two tools: the issuance of common short-term debt in the form of eurobills and the set-up of a European Redemption Fund (ERF). Agnes Le Thiec, CFA, examines the proposal.
CFA Institute member feedback cited in European Commission report on eurobonds.
While EU policy makers have taken steps on a number of fronts to strengthen financial and institutional frameworks, it has failed to reverse the current trend of “financial disintegration” of EU markets.
Jim Allen, CFA, examines capital flows between member states and the headaches and fissures they are creating within the Eurozone.
Does the shift away by corporates from seeking bank financing have an unforeseen impact on systemic risk? Vincent Papa, CFA, examines the issue.
Agnès Le Thiec, CFA, reflects on the results of the CFA Institute member poll on Eurobonds, including the optimal structure and necessary pre-conditions that would appeal to investors.
The debate over eurobonds — sovereign bonds commonly issued by member states of the eurozone — has intensified over the last couple of months. Agnès Le Thiec, CFA, outlines the work CFA Institute is doing to ensure that investor voices are heard.
In a recent interview with Canada’s BNN, Matt Orsagh, CFA, CIPM, director of capital markets policy at CFA Institute, recaps the 2012 Global Market Sentiment Survey. He covers the outlook for equities, the sovereign debt crisis, and… READ MORE ›