Financials

Ąžuolas Ališauskas   For those naïve enough to believe that European banks have resolved their problems, the Bank of England’s most recent stress tests serve as a perfect reminder not to rush to conclusions. Although only RBS failed the test and vulnerabilities were highlighted at Barclays and Standard Chartered, the aggregate Return on Equity (RoE)…

Alexander Baldwin   In the Bank of England’s latest round of UK annual stress tests, RBS, Barclays, and Standard Chartered Bank all failed to meet the minimum standards in the stress scenarios, with the former emerging as the worst performer.   BoE modelled their tests in the toughest scenarios ever set by the central bank.…

Tamas Laszlo Babos Donald Trump’s election instantly impacted global markets. Although the vote’s exact effect on Europe’s trade, security, and political landscape remains unclear, it seems to be positive from the European Central Bank’s perspective. The European economy could enjoy a boost due to the reaction of markets, which would indeed widen the action space…

Alex Baldwin Eight years on from the global financial crisis, central banks have been paramount to trying to generate economic recovery. Despite monetary policy efforts to stimulate the economy, rising interest rates and economic growth have been illusory. Interest rates have remained so low for so long that historic lows are becoming seemingly normal. Negative…

Ąžuolas Ališauskas It is hard to tell whether Britain’s vote to leave the European Union was more surprising than Donald J. Trump’s victory in the US presidential election. However, it is clear that they were both highly unexpected, and triggered massive activity in the financial markets. Both Brexit and Trump’s victory are seen as the…

By Chin Fung Ho With the 8-1 voting result to maintain UK interest rate unchanged, the Bank of England has announced that the rate is to remain at 0.5% in this quarterly period. Some investors are disappointed that the BoE is not being aggressive enough to take a positive step and still worry too much.…

By Thomas Daborn The idea of paying to hold onto something in the hope that it will keep your capital safe or offer a greater return at the end of the period is perfectly well established practice in history. However, in current conditions, the phenomenon of negative bond yields seems to puzzle many investors: a…

By Tamas Babos After the Paris terror attacks, numerous reactions took place all over the world, and the financial sector was not omitted from this. Predictably enough, police raided neighbourhoods under suspicion, world leaders condemned the assaults and offered condolences, civilians commemorated, and weapons manufacturers’ share prices burst. As soon as stock exchanges opened around…

By Thomas Daborn Europe has been thwarted with issues following the systemic financial crisis which spread as a cotangent across the pond. Notwithstanding European issues of mass migration from an unprecedented refugee crisis, xenophobic rhetoric coming out of extremist political figures or the very recent terror scares, Europe has another headwind in its stride. European…

By Tamas Babos Two government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, may soon require a second bailout after their first one in late 2008, financed during the presidency of Barack Obama. These two bodies are responsible for much of the inner workings of the US housing market. By securitizing American mortgages in the form…