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Interest rates going negative

The Swiss National Bank (SNB) today imposed the negative deposit rate as the Russian financial crisis and the threat of further euro-zone stimulus heaped pressure on the franc. A charge of 25 basis points or one-fourth of a percentage point on sight deposits, the cash-like holdings of commercial banks at the central bank, will apply […]

IFC issues first Masala Bonds in London

International Finance Corporation (IFC), a member of the World Bank, issued a 10-year, 10 billion Indian rupee bond (equivalent to $163 million) to increase foreign investment in India, mobilizing international capital markets to support infrastructure development in the country. J.P. Morgan was the sole arranger for the bond. IFC issued the bonds in London to […]

Bank risk in emerging markets

The past decade saw an unprecedented rise in the fortunes of emerging-market banks. Less affected by the global financial crisis than their developed-world peers, their collective revenue surged to $1,400 trillion in 2012 from $268 trillion in 2002. The future, however, may be a different story. Historically strong capital and liquidity positions have eroded, and […]

Cyber-terror attack on banks — a devastating possibility

Bankers and U.S. officials have warned that cyber-terrorists will try to wreck the financial system’s computer networks. What they aren’t saying publicly is that taxpayers will probably have to cover much of the damage. Even if customers don’t lose money from a hacking assault on JPMorgan Chase & Co., the episode is a reminder that […]

Iraqi bonds gain on Maliki resignation optimism

Iraqi government bonds advanced, sending yields down the most in 11 months, on speculation Iraqi Prime Minister Nouri al-Maliki’s resignation will improve the country’s security situation. Maliki’s move ends a political impasse and may enable Prime Minister-designate Haidar al-Abadi to pull together a more inclusive government better able to counter Islamist militants advancing in the […]

Who buys bonds with a negative yield?

Bloomberg today reports that German bond gains sent the two-year rate below zero for the first time since May 2013 before the European Central Bank announces its latest decision on monetary policy today. The two-year note rate was at minus 0.002 percent, and touched minus 0.004 percent, the least since May 24, 2013. A negative […]

Why did Argentina default now?

Argentina is famous for defaults on sovereign bonds. In the early 20th century, the South American country was one of the world’s richest, thanks to its production of beef, wheat and other farm goods, plus an educated workforce made up mostly of European immigrants and their descendants. But the constant crises, often attributable to government […]

Geopolitical risk rising for global investors

Brian Bremner and Simon Kennedy quotes Raj Hindocha in Bloomberg: “Geopolitical risk is being underestimated and volatility suppressed, thanks in large part to the open monetary spigots at the U.S. Federal Reserve, European Central Bank and Bank of Japan.” Hindocha is a managing director with Deutsche Bank Research in London. Since the start of the […]

Yields on Iraqi bonds starts retreat after jump

Iraqi bonds plunged the most in two years after fighters from ISIS, a breakaway al-Qaeda group took control of Mosul. The yield on Iraq’s $2.7 billion of bonds due in January 2028 climbed 60 basis points to 7.03% on June 11 after ISIS militants seized the country’s second-largest city, Mosul. It’s the biggest jump in […]

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