Credit

Europe’s “whatever it takes” becomes “what next?”

2 Feb 2017

Bond yields are rising as the end of money-printing looms. The return of a crisis like the one that prompted ECB President Mario Draghi's pledge to save the euro zone is unlikely. Yet as investors focus on political risk and debt, governments will face tougher choices.

French elections beat Brexit for market disquiet

30 Jan 2017

The Gallic vote is worrying investors more than Britain leaving the EU. It now costs over a third more to insure against a French default than a UK one, though rating firms see little chance of either going bust. It's the scope to weaken its currency that gives Britain an edge.

Moody’s offers both crisis coda and timely warning

17 Jan 2017

The firm's $864 million deal with prosecutors closes the door on rating agencies' role in the financial meltdown. Moody's has also pledged to insulate analysts from commercial pressures, a reminder as the credit cycle matures that Wall Street's potential for conflicts endures.

EU banks handed new way to lose business

9 Jan 2017

The European Central Bank will set tougher rules than American peers to limit risky lending. The limits could make it harder for Europe’s banks to compete with U.S. or UK ones in lucrative private equity deals. The upshot may be safer lenders – but ones that make even less money.

Regional pain makes UK consumer credit risks real

6 Jan 2017

The BoE's chief economist says a merely moderate rise in housing finance means consumer borrowing risks are contained. But unemployment is up in Scotland and northern England, where faster-growing personal loans matter more. Banks' pricing competition could worsen the reckoning.

Fed rate hike foretells end of credit-market boom

15 Dec 2016

U.S. corporations have gone on a borrowing binge in recent years to fund stock buybacks and juice reported earnings. The central bank's long-awaited move, and the prospect of more to come, alters the calculus. Real growth rather than financial engineering will be the new game.

S&P’s sleight of hand is South Africa’s gain

2 Dec 2016

The credit ratings firm has downgraded the sub-Saharan state's local currency bonds but spared its foreign debt. This allows South Africa to escape junk status for the time being. Almost as important, there's no excuse now for firing respected finance minister Pravin Gordhan.

Credit markets ill-prepared for Trump presidency

21 Nov 2016

The U.S. president-elect may boost spending and growth. But higher interest rates would also push up funding costs for companies and emerging economies. Though credit investors have largely shrugged off Trump’s victory, the end of loose monetary policy could prove a shock.

Fintech lenders leave big funding stone unturned

9 Aug 2016

Struggling Prosper and Lending Club, whose CFO just left, are trying to secure long-term financing from investors. Far sturdier SoFi and Earnest have set up successful securitization programs. None is chasing the cheapest option: deposits. That may only be a matter of time.

ECB picks bad time to give Monte Paschi good slap

4 Jul 2016

The EU bank regulator wants the Tuscan bank to sell bad loans quicker. It's right, but MPS could need capital. That may require a politically contentious bail-in of Italian creditors, or Brussels to cave in to Prime Minister Matteo Renzi by watering down state aid rules.

ECB corporate bond buying is risky experiment

1 Jun 2016

The central bank's pledge to buy company bonds has caused a surge in issuance. As a result, market spreads - the premium investors demand over sovereign debt - are not falling. The unwanted side effects of the programme show why corporate credit markets are best left alone.