Tag: finance
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Rating the Backbone: The Crucial Role of Credit Ratings in Assessing Systemically Important Tech Giants
In a world increasingly driven by a small number of powerful technology firms, the importance of timely and accurate credit ratings has never been higher. Companies such as TSMC, ASML, Microsoft, Apple, Google, Nvidia, Amazon, Meta, SAP, Oracle, Huawei, Ericsson, and ARM form the digital backbone of modern economies. Any disruption in their operations —…
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Boom, Bust, and Polleit: The Economist Investors Can’t Ignore
In a time of growing economic distortion, monetary manipulation, and geopolitical uncertainty, discerning investors are increasingly seeking voices that go beyond the mainstream. One such voice—sharp, consistent, and grounded in decades of rigorous thought—is that of Dr. Thorsten Polleit. His Boom & Bust Report, launched in April 2024, has rapidly become essential reading for those who…
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What All-Time Highs Really Mean for Credit Ratings
In the world of investing, the fear of market peaks is deeply rooted. Investors often hesitate to deploy capital when equity indices are at all-time highs, fearing an imminent correction. But this fear is not only frequently misplaced—it may also distort long-term financial strategies and, by extension, the interpretation of creditworthiness and risk metrics. Duncan…
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Moody’s Delivers in Q2 — But Familiar Questions Linger
Moody’s Corporation posted a strong financial performance in the second quarter of 2025, continuing its momentum amid a complex and often volatile macroeconomic landscape. The company reported a 4% increase in revenue compared to the same quarter last year, with adjusted operating margin rising by 130 basis points to 50.9%. Adjusted diluted EPS also grew…
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After FINMA’s Greensill Ruling: Should Big Banks Rely Less on Rating Agencies and More on Internal Credit Research?
The collapse of Greensill Capital and the subsequent enforcement proceedings against Credit Suisse by the Swiss Financial Market Supervisory Authority (FINMA) offer a stark warning to the global banking sector. The comprehensive FINMA report, which details severe organizational failures and risk blind spots within Credit Suisse Asset Management (CSAM), raises a fundamental question: should large…
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Could Recent Developments in Aberdeen’s Q3 House View Trigger Rating Agency Reactions?
Aberdeen Investments’ latest Q3 House View presents a cautiously optimistic outlook amid mounting geopolitical and economic uncertainty. But while investors are adjusting their strategies, a key question arises: Could these developments be significant enough to provoke a reassessment by credit rating agencies? Trade Policy and “US Exceptionalism” Under Scrutiny One of the report’s central themes…
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European Investment Banking and Capital Markets Activity Slows in H1 2025: Implications for Rating Agencies
According to data from LSEG Deals Intelligence, investment banking fees (more precisely, commissions) in Europe totaled an estimated US$13.4 billion in the first half of 2025. This marks an 11% year-over-year decline, though still higher than the levels recorded in the first half of 2023 and 2022. Debt capital markets (DCM) underwriting commissions reached US$5.8 billion,…
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Chile’s Financial Market Deepens as Moody’s Acquires ICR Chile
Chile’s financial market has long been one of the more stable and transparent systems in Latin America, marked by strong institutions and a deepening domestic capital market. In a move that underscores both Chile’s rising significance and the international appetite for quality credit information, Moody’s Corporation announced it has fully acquired ICR Chile, one of…
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Profit Participation Plan of Moody’s Corporation: Perspectives of Shareholders and Plan Beneficiaries
For shareholders, the Profit Participation Plan offers several advantages that justify its implementation. First and foremost, it acts as a talent magnet and retention mechanism. In an industry where skilled labor is highly competitive, offering a robust retirement plan enhances Moody’s appeal as an employer. This stability in human resources can translate into consistent performance…
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Interpreting UBP’s Outlook Amid Policy Shifts and Market Volatility
Disclaimer: The following interpretations are based on an analysis published by Union Bancaire Privée (UBP). They reflect possible implications and not definitive outcomes. These developments carry several implications for credit ratings across asset classes and regions. Macroeconomic Stability and Sovereign Ratings The stabilization of U.S. economic data and the subsiding recession risks may offer short-term…
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Surprising U.S. Inflation Data for May Signals Limited Price Pressure
In a notable development for financial markets and monetary policy, U.S. consumer prices rose by just 0.1% in May, significantly below expectations. As a result, the annual inflation rate edged up only slightly, from 2.3% to 2.4%, while the core inflation rate—which excludes volatile food and energy prices—remained stable at 2.8%. These numbers highlight a…
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Convertible Bonds: Stability and Credit Quality in Volatile Markets
In a market marked by volatility, global convertible bonds have outperformed both equities and traditional bonds in the first quarter of 2025, offering a unique blend of downside protection and growth potential.
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Cyber Resilience, AI, and Growth: Shaping the Next Generation of Banking
The 20th annual conference of the Frankfurt School Forum brought together influential leaders, academics, and technology experts to explore the transformation of financial services in an era of unprecedented digital, geopolitical, and regulatory challenges. Under the banner “Next-Generation Financial Services 25: Cybersecurity, Threat Intelligence, Gen AI, Resilience,” the event highlighted critical success factors for resilient,…
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Potential Consequences for Scope Ratings if Greensill Bank Allegations Are Confirmed
If the serious allegations surrounding the collapse of Greensill Bank are confirmed, significant consequences could loom for the Berlin-based credit rating agency Scope Ratings. As the agency to have provided Greensill Bank with a credit rating prior to its dramatic collapse in March 2021, Scope may face legal, reputational, and regulatory fallout. Legal Risks: Exposure…
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MSCI and Moody’s Forge Strategic Alliance to Enhance Private Credit Risk Assessment
In a significant move to bolster transparency and consistency in the private credit market, MSCI Inc. (NYSE: MSCI) and Moody’s Corporation (NYSE: MCO) have announced a strategic partnership aimed at delivering independent risk assessments for private credit investments at scale. “As the private credit market continues to evolve and grow, the need for consistent standards…
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ESMA Imposes Fine on Modefinance S.r.l. for Misleading Use of Its Name
The European Securities and Markets Authority (ESMA) has fined the Italian credit rating agency Modefinance S.r.l. EUR 420,000 for breaching the Credit Rating Agencies Regulation (CRA Regulation). The penalty was imposed after the company was found to have misleadingly used ESMA’s name in statements regarding its credit rating activities. Misuse of ESMA’s Name According to…
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Stable Credit Ratings Ahead, Amid Trade Tariffs: A Clear Framework for Negotiations
In response to the newly announced international trade tariffs, Johanna Kyrklund, Group Chief Investment Officer at Schroders, and George Brown, Economist at Schroders, provide insight into the economic implications, including potential effects on growth, inflation, and the most affected countries. While initial reactions have been negative, a closer analysis suggests that these developments may support…
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The Issue of Implied State Support and the New BaFin Circular 06/2025 (BA) on the Exercise of the Option under Article 495e CRR
The topic of implied state support in financial regulations has been a matter of discussion for years, particularly in relation to credit assessments and risk-weighted assets under the Capital Requirements Regulation (CRR). The Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) has recently issued Circular 06/2025 (BA), which provides clarity on the exercise of the option under Article 495e…
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European Investors Reassess US Equities as Bond Inflows Surge
European investors are rethinking their approach to US equities as the latest data from LSEG Lipper suggests a shift in sentiment. While 2024 saw strong inflows into the European fund industry—pushing assets under management (AUM) beyond €15.5 trillion—early 2025 has brought signs of caution. In particular, US equity ETFs experienced significant outflows of €1.44 billion…
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Analysis of the FiDA Proposal from a Credit Rating Agency Perspective
The proposed Financial Data Access Regulation (FiDA) aims to enhance competition and innovation in the European financial market by facilitating data sharing. However, the Deutsche Kreditwirtschaft (DK) has raised significant concerns regarding its implementation, arguing that it imposes excessive burdens on financial institutions and lacks a well-defined scope. From the perspective of a credit rating…
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Deutsche Bank’s 2024 Annual Report: Liquidity and Credit Ratings in Focus
The Deutsche Bank recently released its 2024 Annual Report, providing insights into its liquidity and capital management, as well as its credit ratings from major rating agencies. The report highlights the bank’s progress in strengthening its financial position, despite a dynamic economic and geopolitical environment. Liquidity and Capital Management The bank’s liquidity risk management is…
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Regulatory Update: The Exercise of the Discretionary Right Under Article 495e CRR
The German Federal Financial Supervisory Authority (BaFin) has recently issued a draft circular (xx/2025 BA) concerning the exercise of the discretionary right under Article 495e of the Capital Requirements Regulation (CRR). This document provides guidelines for certain financial institutions on the continued use of External Credit Assessment Institution (ECAI) ratings that assume implicit government support…
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Implications for Credit Ratings: Japan’s Market Transformation and Corporate Reform
Japan’s stock market is undergoing a fundamental transformation that goes beyond short-term cyclical trends, according to June-Yon Kim, Lead Portfolio Manager for Japanese equities at Lazard Asset Management. For decades, Japan’s equity market had been weighed down by deflation and structural inefficiencies. However, this has been followed by a prolonged phase of remarkable transformation, including…
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Navigating the Fixed Income Landscape in 2025: A Strategic Perspective
The year 2025 has begun with volatility in fixed income markets, largely driven by fluctuations in 10-year Treasury yields. Inflation concerns and uncertainty regarding trade policy and the Federal Reserve’s monetary strategy have contributed to the unpredictable landscape. According to UBP, “The Fed remains cautious about further rate cuts due to persistent inflation, leading to…
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Moody’s Margin Development: 2024 Performance and 2025 Outlook
Moody’s Corporation demonstrated strong margin expansion in 2024, driven by revenue growth, cost efficiency measures, and disciplined execution. The company’s operating margin increased from 36.1% in 2023 to 40.6% in 2024, reflecting higher revenue across both Moody’s Investors Service (MIS) and Moody’s Analytics (MA). Adjusted operating margin saw an even stronger improvement, rising from 43.9%…
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Powering Financial Markets: The Pivotal Role of S&P Global Ratings
S&P Global Inc. (SPGI) has solidified its position as a leader in financial intelligence and analytics, with its Ratings business playing a crucial role in its sustained growth and profitability. As one of the world’s foremost credit rating agencies, S&P Global Ratings provides essential insights into credit risk, helping investors and institutions make informed decisions.…
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Industrial Real Estate Market Outlook 2025: Key Trends and Insights
The industrial real estate sector continues to evolve amidst changing market conditions. The IndustrialPort Observer 2025 survey gathered insights from industry experts, including property owners, asset managers, and appraisers, to assess the market sentiment and forecast trends for the coming year. Market Sentiment: A Shift Towards Caution The survey indicates a shift towards a more…
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Charting the Future: Unveiling the Strategic Insights of ‘Big Picture: 2025’
The FERI Cognitive Finance Institute (FCFI) has recently published its groundbreaking study, “Big Picture: 2025,” offering an unprecedentedly comprehensive and multifaceted analysis of the key global trends that are set to shape the near future. This publication, rooted in the Institute’s innovative Cognitive Finance methodology, brings together 35 core scenarios from six interconnected domains: politics,…
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Moody’s Acquisition of CAPE Analytics: A Timely Response to Rising Climate Risks Amid California Wildfires
The announcement of Moody’s acquisition of CAPE Analytics comes at a highly relevant moment, as the devastating wildfires in California dominate media headlines and bring heightened awareness to the risks posed by natural disasters. This timely move underscores the growing importance of sophisticated risk analytics in addressing the escalating financial and environmental challenges associated with…
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Strong Debt Issuance Volumes Drive Higher Ratings Revenue Forecasts
The recent Goldman Sachs study highlights an impressive growth in global debt issuance volumes during the fourth quarter of 2024, which has significantly impacted ratings revenue forecasts for major players such as S&P Global (SPGI) and Moody’s Corporation (MCO). This development underscores the resilience of the financial markets and provides a promising outlook for 2025.…
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The Development of Scope Ratings’ Market Share 2024
Scope Ratings GmbH, a European credit rating agency (CRA), has shown a consistent, albeit modest, increase in market share over recent years. According to the 2024 CRA Market Share Report published by the European Securities and Markets Authority (ESMA), Scope Ratings’ market share grew to 1.83% according to the 2024 report, compared to 1.72% in…
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Strategic Shift Towards Bonds in apoBank’s Capital Market Outlook 2025
The Deutsche Apotheker- und Ärztebank (apoBank) has announced a significant shift in its capital market strategy for 2025. Germany’s largest cooperative primary bank is adopting a more defensive investment approach, moving from a “neutral” stance on equities to an “underweight” position. Simultaneously, apoBank is increasing its allocation to bonds, shifting to an “overweight” stance. “The…
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Moody’s Acquisition of Numerated: Implications for the Credit Rating and Lending Industry
Moody’s Corporation (NYSE: MCO) has announced the acquisition of Numerated Growth Technologies (Numerated), a cutting-edge loan origination platform tailored for financial institutions. This move strengthens Moody’s Lending Suite capabilities, offering banking clients a comprehensive, end-to-end solution for loan origination and monitoring. The acquisition, which builds on a partnership initiated in early 2024, marks a significant…
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Stability and Continuity: Implications of China’s Approach for Corporate Credit Ratings
In an era defined by uncertainty, businesses and investors are increasingly seeking stability and continuity as key indicators of creditworthiness. This theme was underscored during Yiyang Huang’s address at the 10th China Day, held as part of the 27th Euro Finance Week. Representing the Consulate General of the People’s Republic of China, Huang highlighted China’s…
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Trump’s Victory: Implications for Global Corporate Credit Ratings Across Sectors and Regions
The election of Donald Trump, as discussed by Prof. Dr. Jan Viebig of ODDO BHF SE, carries significant implications for the credit ratings of companies across different countries and sectors. His policies, characterized by a shift toward protectionism, corporate tax cuts, and deregulation, are likely to have distinct effects on credit stability, particularly impacting European…
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Landmark Ruling Strengthens Rating Agencies’ Role in Assessing Bank Creditworthiness
The recent judgment by the Federal Court of Justice (Bundesgerichtshof, BGH) in the case surrounding Greensill Bank underscores the significance of rating agencies in assessing a bank’s creditworthiness. The case, involving a municipality’s lost investment, highlighted the role of financial service providers and affirmed the reliance on ratings from established agencies as primary indicators of…
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Moody’s Reports Record-Breaking Third Quarter 2024 with Strong Revenue Growth and Raised Earnings Outlook
Moody’s Corporation delivered outstanding results for the third quarter of 2024, highlighting the company’s resilience and ability to capitalize on favorable market conditions. Revenue for the quarter surged by 23% compared to the same period in 2023, reaching an impressive $1.8 billion. This growth was driven largely by the stellar performance of Moody’s Investors Service…
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Moldova Receives ‘B+’ Rating with Stable Outlook from Fitch Ratings
Fitch Ratings has assigned the Republic of Moldova a Long-Term Foreign-Currency Issuer Default Rating (IDR) of ‘B+’ with a Stable Outlook. This rating highlights the country’s steady commitment to maintaining macroeconomic and financial stability through prudent fiscal policies, a credible inflation-targeting framework, and a flexible exchange rate regime. These factors, combined with a resilient banking…
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