Sovereign debt
The new environment facing sovereign investors
Post-crisis, SWFs meet with less official resistance to investment, but markets are trickier and stakeholders no less demanding, writes Donghyun Park
Eurozone authorities are losing credibility – CNB’s Singer
Credibility is key in crisis resolution and European authorities are failing to achieve, warns Miroslav Singer, the governor of the Czech National bank
BIS Annual Report highlights action needed in key global economies
General theme of Annual Report is of slow global recovery; the United Kingdom, the United States and China all pinpointed for action
Switzerland votes for tougher capital rules on big banks
Swiss upper chamber backs bill to raise capital requirements of largest banks to 19%; Swiss National Bank vice-chairman Thomas Jordan says potential losses must be fully absorbed
ECB highlights funding vulnerabilities in euro area banks
European Central Bank June 2011 Financial Stability Review shows funding vulnerabilities remain "Achilles heel" for euro area banks
LCR should include equity, says ACP’s Nouy
Basel III liquidity coverage ratio should admit equities with significant haircuts, says Danièle Nouy at the Autorité de Contrôle Prudentiel
Sovereign spillovers normalised Asian spreads, says IMF study
Fund paper attributes volatility in Asian sovereign debt markets during crisis to sovereign risk spillovers
OECD and South Africa to set up first African sovereign debt management centre
New centre will train African government officials in managing sovereign debt and set up a government debt database for the region
Credit rating agencies slam sovereign warning proposal
EU Commission proposal for credit rating agencies to give sovereigns three days’ notice of a rating change causes “grave concerns”
Greece deficit revision sparks default concerns from analysts
Eurostat revises Greece’s deficit to GDP upwards by almost a percentage point; analysts reiterate need for Greece to restructure debt
Banks caught in ‘maelstrom of interlinked pressures’: IMF
IMF’s Global Financial Stability Report slams progress made by banking system reforms; calls for higher quality and quantity capital in Europe
Central bank reserve managers recoil at sovereign risk
Central Banking Publications survey finds fears over sovereign risk led reserve managers to limit or cut exposure to “peripheral” European countries; impact also felt in attitudes towards the euro
Gold to hit $1,600 this year; GFMS survey
New survey by GFMS predicts price of gold could hit $1,600 per ounce by the end of 2011; survey captures swing to net purchases by central banks
Greek debt still the most risky: CMA survey
CMA labels Greek sovereign debt as most risky in the world, second quarter in a row; countries elsewhere in Western Europe performed the best
IMF paper on debt dilution
Fund study says commitment to reduce debt levels can eliminate risk of debt dilution
FSB criticises industry for lack of progress on risk disclosure
Financial Stability Board says more action needed on liquidity, counterparty, structured credit disclosure practices
Investors watch Saudi protests with interest
Sentiment in the bond markets has not been unduly affected by MENA tensions, but Saudi unrest could change that.
Moody’s lowers Greece's credit rating
Greece's credit rating moved from B1 to Ba1 while spreads rise across eurozone periphery
Investment grade status provides premium: IMF paper
Fund study shows upgrade to investment grade status leads to sharp decline in sovereign spreads
CEPR paper identifies root cause of sovereign debt crises
Centre for Economic Policy Research study finds country indebtedness, quality of governance and ability to weather shocks are determinants of sovereign debt crises
ECB provides liquidity bridge, not bailout: Papadia
European Central Bank’s director-general for market operations Francesco Papadia stresses central bank’s liquidity assistance only short-term, says new European rescue vehicles will ease market concerns
Ivory Coast defaults on $2.3 billion eurobond payment
Ivory Coast fails to make January 31 deadline on payment to credit holders; analyst says political situation must be addressed before payment can be made
Gold could hit $1,600 in 2011, say analysts
Commentators say investor appetite for the precious metal will continue to soar as concerns over US economy, eurozone sovereign debt issues, persist
Sovereign asset and debt management
The following is an executive summary of the proceedings of Central Banking’s conference, “Sovereign Asset and Debt Management”, held in London on June 20-21.