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As the credit cycle ages, following years of record-setting bond issuance, there are growing concerns about signs of stress in corporate balance sheets—notably in the high-yield sector and in many emerging markets. In the high-yield sector, rising default rates pose a particular challenge in a slow-growth environment. For emerging markets borrowers, the growing debt burden will weigh on corporate creditworthiness and EM growth going forward.
We estimate that emerging markets received $26 billion of non-resident portfolio inflows in April, following a 21-month high of $37 billion in March. Inflows were dominated by foreign purchases of bonds ($21 billion), helped by favorable issuance conditions.
This latest staff paper details the history of the Basel capital framework and the important role internal risk models have played in strengthening those standards.
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Helped by dovish central banks, rising commodity prices and a softer USD, EM funds attracted net inflows of over $5 billion in April, accounting for more than 70% of total fund flows into mature and emerging markets.
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The main takeaway from our visit to Santiago last week is that the Chilean economy continues to struggle as business concerns with government policies exacerbate the drag from a weak copper price.
The May 2016 IIF Global Regulatory Update provides updates on current work streams in regulatory capital, liquidity, resolution, accounting, disclosure, insurance, and upcoming events.
Driven by US, large int'l firms & lower-rated firms have increased leverage in recent years t.co/jIG54SRl4a t.co/BMAVRqYD9r
Euro Area investors at work---Around 60% of foreign debt purchases were directed towards EMs t.co/hXP3AocSyK t.co/GsD6wsvBAj
#Chile gov't forced to cut spending to protect reputation for fiscal prudence. Our update: t.co/nJm6a3AoUO t.co/nxvVxHUnIY
Robust institutional demand for EM bonds—not surprising in a low interest rate environment t.co/hXP3AocSyK t.co/PB9Sl2pG9A
#EmergingMarkets received $26 bn of non-resident portfolio inflows in Apr, after 21-month high of $37 bn in Mar t.co/FBM0qoR23s
Uncertainty in #Chile stems from controversial labor reform & steps to rewrite Constitution t.co/nJm6a3AoUO t.co/Fv6ADbYfDi
See our latest on #CapitalMarkets for details on rising debt: t.co/CN4VKQycjR t.co/YioidhmotE
PAPER: Internal models may have helped avert or reduce crisis if they'd been approved earlier t.co/aQl4n8dyFv
#Chile continues to struggle as business concerns w/ gov't policies exacerbate drag from weak copper price. Details: t.co/nJm6a3AoUO
Updated Chart: Non-financial corporations worldwide have issued a record volume of bonds. t.co/ZROhHwvEAh t.co/bY8pBdWu2k
Homegrown uncertainty in #Chile. We looked further into deteriorating investment climate on our recent trip. More: t.co/nJm6a3AoUO
Unemployment is surging in #Chile and we suspect it will only get worse. But could that be a blessing in disguise? t.co/nJm6a3AoUO
.@bancosantander notes #SmartContracts could reduce bank infrastructure costs by $15 – 20 bn/yr. Stay tuned for our take on developments.
#CapitalMarkets: Corporate Debt - Flashing Yellow for High-Yield and #EmergingMarkets. More slow growth ahead? t.co/jIG54SRl4a
Updated Chart: Non-financial corporations worldwide have issued a record volume of bonds. t.co/ZROhHwvEAh t.co/zgSDCOOg8H
Corp. debt problem is concentrated in high-yield & EM sectors, and will continue to act as strong headwind to growth t.co/UnDcdeXFLK
#China has the most corporate debt in the entire world. Worrisome that it is in many sectors t.co/UnDcdeXFLK t.co/rxtwMcxGtq
Rise in EM corp. debt in '15 was due to a more than $2 tr increase in local currency debt t.co/UnDcdeXFLK t.co/D3YNmEfTQl
EM non-financial corp. debt has increased rapidly. Less than $5 tr in '05 to ~ $25 tr in '15 t.co/jIG54SRl4a t.co/B23VxRJ8uq