2010 was the year concerns about the health of European sovereigns eclipsed the banking crisis. For the first time since the credit crunch of 2007, financial institutions were no longer the sole target of public opprobrium, and concern about defaults centred on entire countries. Bailouts were no longer an enforced favour from taxpayers to their national banking systems but had become instead an international rescue mission mounted to prevent the EU bloc from foundering on its own economic contradictions. Yet while the financial crisis may have...Read more
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For the larger and more reputable banks, the senior unsecured market has been welcoming this year, and, at the top table at least, the financial sector looks to have put the worst of its troubles behind it. But cost remains prohibitive for smaller banks and those perceived to be higher risk, as the market becomes increasingly stratified. Hardeep Dhillon reports.
As summer drew to a close, European banks enjoyed a considerably smoother path to investors than seemed likely only a few weeks before. But whether the improvement in funding conditions will endure is debatable. Simon Boughey reports.
On 12 September The Basel Committee’s latest recommendations confirmed the amount of Tier 1 capital required from banks by the new regulatory regime. But a number of loose ends remain. Some in the market worry the lack of clarity over grandfathering will lead to the same kind of primary market stagnation seen after the December 2009 recommendations. Matthew Attwood reports.
New proposals set out by the Basel Committee will see the Lower Tier 2 asset class assume a burden-sharing role in the case of a bank’s non-viability. While many conversations will be had concerning the details contained in the recommendations, LT2 is sure to look and feel different. Philip Wright reports.
’Going concern’ contingent capital was heralded as a crucial new instrument for the new regulatory regime, but so far there have only been two deals. Some market participants believe the format is the future of hybrid issuance but others expect it to coexist with Tier 1. The Basel Committee released new guidance in July, but the future of this market will not be apparent until there has been more regulatory clarity, as Matthew Attwood reports.
Europe’s covered bond market passed an important test at the end of August when a glut of issuance proved there was life after the European Central Bank’s purchase programme. However, activity could slump again as fears over sovereign risk re-surface. David Rothnie reports.
Rabobank has enjoyed another successful year as an issuer. It priced large conventional benchmarks throughout the year, added to its reputation as an innovator with an unprecedented contingent capital structure and explored the ultra long end where other borrowers fear to tread. Matthew Attwood reports.