Party time: Appearances can certainly be deceptive. While it felt for all the world that 2013 was frantically busy in the debt capital markets, Thomson Reuters data actually show that overall volumes for the first nine months fell 3% to US$4.2trn.
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Central banks stepped in to rally markets with extraordinary monetary measures over the past few years but now have to deal with the consequences of their largesse. One of the biggest concerns is whether or not private market leverage can replace the public sector leverage. If central banks do unwind, new sources of demand need to emerge, including from the “shadow” or alternative banking system.
The sovereign debt crisis may be cooling, but the eurozone could yet burn its fingers on the red-hot risks faced by banks in the peripherals.
A new eurozone SME loan securitisation strategy is taking shape in the effort to boost the real economy.
The third set of stress tests in three years is set to be published in early 2014. How do they need to be conducted to resolve outstanding concerns? What is the likelihood of this being achieved? If the tests are worth their salt, there will be banks across Europe will sizeable holes to fill – how will they do it?
As banks struggle to adapt to the post-crisis reality and maximise profitability, clients have found financing harder to come by via the traditional channels. This has put the relationship between bank and client under considerable pressure, but those that have survived are stronger for it.
Is hybrid capital still considered expensive debt or cheap non-dilutive capital for corporates? Will the change in rates environment off the back of US QE mean the recent deluge of corporate hybrid issuance is a flash in the pan?
Volumes in the European high-yield bond market have doubled in the past five years and this year will be a record too thanks to a declining loan market.