Policy and Technical insight – February 2016

Bank resolution is being tested before ‘bail in’ implemented A week where old fashioned means of resolving €200bn of Italian bad loans came to the fore: they are to be sold with a market price government credit guarantee. The government felt pressed to stop a loss of faith in banks when it never had the UK option of borrowing to recapitalise them. Market making – thin end of the regulatory wedge Reuters bring attention to withdrawal of market makers from government bonds. Are we witnessing waning interest as MiFID II transparency rules loom over the horizon, and CRDIV requirements make

Apple Inc. sheds light on Libor

Bloomberg broke it thus:

Apple’s $1 billion of floating debt due 2016 pays 5 basis points, or 0.05 percentage point, more than the three-month London interbank offered rate, and its $2 billion, five-year floater yield 25 basis points more than the benchmark, Bloomberg data showApple Raises $17 Billion in Record Corporate Bond Sale, Charles Mead & Sarika Gangar, April 30, 2013 10:42 pm GMT+0100, http://www.bloomberg.com/news/2013-04-30/apple-plans-six-part-bond-sale-in-first-offering-since-1996-1-.html..

Libor: Banks are the risk

We suspect that the current LIBOR process is “doing what it says on the tin”

Under current circumstances, contributors of rates to Libor, Euribor and other index rates are probably taking more care in their submissions than they have ever taken.

Libor: What should it look like?

“LIBOR scandal forces Barclays from UAE rate panel”, the Telegraph headline says as I write this. And the press is printing well meaning but impractical “solutions” to the Libor problem written by academics and pundits.

Going back to basics, we need reference rates like Eibor (“E” for Emirates), Libor and Euribor.