Comment EM and The Cover

In the leveraged loan market, where pricing has plummeted, it was inevitable that issuers would push their luck with the terms of their deals. Investors must push back.

A growing number of European high yield bonds are being listed on the Channel Islands Securities Exchange to avoid onerous EU regulations. But borrowers should avoid too many visits to the offshore haven for the good of their market.

Everyone in debt capital markets has heard of green bonds, and most in the financial world accept that sustainability and greenness are Good Things. But for all the grand commitments and PR initiatives, understanding of the issues is still as hazy as a Beijing smog.

We wish all our readers a merry Christmas and a peaceful and prosperous new year. We also hope you get some well-deserved rest over the holidays. You will need all the energy you can muster. We face another year of extreme volatility, risks and shocks in 2017, perhaps even more than in 2016.

Europe’s bank recovery and resolution directive (BRRD) could face an important first test this month if Banca Monte dei Paschi di Siena fails to complete its rescue plan. But market participants should not completely write off the new framework, even if the bail-in process does not pan out how they had hoped.

All central counterparties, by their nature, are systemically important. But some are more systemic than others. Regulators should adopt a more tiered, and more technological approach to CCP recovery and resolution.

The Euro PP market needs to act fast to stop bank lending luring smaller companies away. But a few tweaks is all it needs.

Banca Monte dei Paschi di Siena’s debt-for-equity swap is the bank resolution and recovery directive (BRRD) working in practice. Bondholders have no escape.

This week, those in the capital markets showed it’s not just electorates that can deliver surprises. Investors got one back — by making markets rise on a shock Donald Trump election victory.

One thing needs to be made clear about a Trump presidency in the US: the president-elect is not a Wall Street Republican and he did not rely on the support of bankers to win the White House.

Investor support for Turkey has proved remarkably resilient this year. A coup attempt and ensuing state of emergency, and two downgrades to junk, did little to shake support, but Turkey’s luck is running out as the attention turns to deteriorating economic indicators from the region.

Do not be reassured by the checks and balances narrative. The US presidential election matters desperately. Either the US will be in a position to keep leading the world, or it won’t.