Neil's Feed
Jan 6, 2011
via Breakingviews

European property needs more bank wannabes

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

LONDON — Europe’s property market needs more bank wannabes. Axa has set up funds to invest 2.5 billion euros in real estate debt. The move suggests insurers could help ease the refinancing burden left by Europe’s shrinking banks. Many of these loans will still be deemed too risky. But the French group may point the way for others.

Dec 20, 2010
via Breakingviews

ECB’s Irish doubts highlights broader uncertainty

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

LONDON — Bank bondholders aren’t the only ones fretting about what the Irish bailout means for them. Even the European Central Bank is unsure of its status and has posted its concerns on its website. If the ECB doesn’t know the score, what hope is there for private creditors?

Sep 16, 2010
via Breakingviews

Europe risks corporate derivatives loophole

Europe’s corporate treasurers can pop open the champagne. After much lobbying, they have won an exemption from new European Commission rules forcing over-the-counter derivative trades to be centrally cleared. But the decision could create a loophole that allows companies to take on big positions and pose a systemic threat.

The G20 group of leading nations last year agreed that all derivative trades should, where possible, be moved onto clearing houses. The thinking was that central clearing spreads risk, reducing the chance that the failure of a single large counterparty can drag down the financial system.

Jul 29, 2010
via Breakingviews

Big is beautiful in hedge fund land, for now

More than ever, sovereign wealth funds and institutions are entrusting their money disproportionately to the largest hedge funds. They may find out bigger isn’t always better.

The size fetish has meant that the share of industry assets held by firms with more than $1 billion under management has risen gradually from about 75 percent in 2006 to about 82 percent at the start of this year, according to Hedge Fund Intelligence. And the trend seems to be accelerating. In the second quarter, 92 percent of net inflows went to managers with more than $5 billion under management, Hedge Fund Research reckons.

May 24, 2010
via Breakingviews

Libor jitters come at bad time

Fears that European banks will be crippled by their sovereign exposure are increasing their borrowing costs. The situation isn’t critical; central banks will act to prevent a report of the post-Lehman crisis. But higher rates won’t help the still fragile recovery gain strength.

It sounds eerily like 2008, when the fear factors were toxic mortgages and the collapse of Lehman Brothers. A collapse in liquidity made the funding market for banks almost dysfunctional. Debts were rolled over at ever higher costs and shorter maturities.

Mar 8, 2010
via Breakingviews

Rabobank takes lead in bank capital revolution

(Refiles on October 19, 2010 to add disclaimer for author’s personal investment. Neil Unmack owned Lloyds CoCos when he wrote this article.)

Ever since the financial crisis struck, regulators have argued for an overhaul of bank capital. Contingent capital, which can absorb losses while the bank remains in business, sounds like the solution. But until last week it had only been used by a few distressed lenders.

Dec 28, 2009
via Breakingviews

Financial innovation is hard to kill

(Refiles on October 19, 2010 to add disclaimer for author’s personal investment. Neil Unmack bought Lloyds CoCos shortly before he wrote this article.)

The bad news of 2009 gave markets a chance to turn over a new leaf on the vexed topic of financial innovation. The credit boom was marked – and marred – by a surfeit of clever products that proved toxic when the good times stopped. In the aftermath, investors said they wanted a return to simplicity and conservatism.

Nov 30, 2009
via The Great Debate

Dubai can’t rely on friendly creditors

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– Neil Unmack is a Reuters columnist. The opinions expressed are his own –

Whether a “careful plan” or strategic blunder, Dubai’s request for a debt standstill for its Dubai World holding company has rattled lenders who were counting on government support.

Oct 27, 2009

ABS recovery still a way off: Neil Unmack

LONDON, Oct 27 (Reuters) – Is mortgage securitisation
making a comeback? Nationwide Building Society <POB_p.L> has
just sold 3.5 billion pounds of mortgage-backed bonds, just the
second deal this year after a similar transaction by Lloyds
<LLOY.L> last month.

The fact that two large transactions have happened is a
good sign, but the market is still some way from recovery.