Europe: Is the worst over? Part I.
“The US had one financial crisis in 2008, but Europe has had two crises—2008 and 2011,” said Philippe Ithurbide, Global Head of Research, Analysis, and Strategy at Amundi Asset Management. He was addressing members of the CFA Society Toronto that had gathered in the TMX Group Centre in downtown Toronto on the evening of November 19, 2013 to hear an overview of European market trends. The first half of his talk was a comprehensive quantified description of the financial woes of the euro zone, followed by several proposed solutions and investments strategies in the second half. In the quarters since […]
Modeling Sovereign Risk. Part 2: Quantification
“The Bloomberg sovereign risk model starts by dividing countries into two types,” said Rajan Singenellore, “reserve-currency countries and non-reserve currency countries. Everything else depends on that distinction.” Singenellore is Product Manager, Risk & Valuations at Bloomberg and was the second of two speakers to address a GARP webinar audience on September 12, 2013. A reserve-currency country is one whose currency is held in significant quantities by other governments as part of their foreign exchange reserves, such as the US and the Japan. There is a pressing need for quantification in the area of sovereign credit risk, he said, citing as […]
Modeling Sovereign Risk. Part 1: Emerging Markets
“Country-specific factors such as government debt and the sovereign credit rating change slowly but global aggregates such as the risk appetite change quickly, thus leading to confusion the part of observers,” said Michael Rosenberg, Foreign Exchange Consultant, Bloomberg and author of Currency Forecasting: A Guide to Fundamental and Technical Models of Exchange Rate Determination. He was the first of two speakers to address a GARP webinar audience on September 12, 2013. Much of Rosenberg’s talk focused on the sovereign credit risk of emerging markets (EM), because the accelerating flow of net private capital into EM from 1980-2014 has been unprecedented. […]
The State of the Credit Markets: Part 2. Global Trends
“Political uncertainty creates a bimodal distribution of risk, which is very difficult for the markets to price,” said Seth Rooder, Global Credit Derivatives Product Manager for Bloomberg, and the second of two speakers at the Global Association of Risk Professionals (GARP) webinar on November 15, 2012. (Click here to view Part 1.) Rooder was referring to the first of five main themes in global risk trends, as he sees them. They are: (1) Economic and political uncertainty (2) Slowing global growth (3) Central Bank (CB) intervention (4) Continuing low yields (5) Increased regulation Ever since the financial crisis of 2008, […]
The State of the Credit Markets: Part 1. The Curious Case of the Euro Zone
“The euro zone is caught in the middle of two opposing forces,” said Alberto Gallo, head of European Macro Credit Research for Royal Bank of Scotland (RBS) and a featured speaker at the Global Association of Risk Professionals (GARP) webinar “The State of the Credit Markets” on November 15, 2012. He was referring to the forces both “positive” (European Central Bank liquidity and low interest rates) and “negative” (heavy debt and increasing fragmentation) in the euro-zone financial markets. Gallo pointed out that, in the last 20 years, banking in Europe has grown tremendously. At €35 trillion, bank assets are now […]
Implications of the Euro Zone Crisis
When it comes to financial debt in the Euro Zone, “deleveraging has barely begun,” said Daniel Wagner, author and risk consultant. “It’s a long and winding road.” On August 7, 2012, Daniel Wagner, CEO of Country Risk Solutions, a US-based cross-border risk management consulting firm, addressed a Global Association of Risk Professionals (GARP) audience about the Eurozone crisis. Wagner, author of Political Risk Insurance Guide, and Managing Country Risk, published in 2012, spoke on a range of related topics. Wagner’s talk was far-ranging and comprehensive (78 slides in 45 minutes). He spoke about the impact of debt: in particular, the effect […]