Moody's Analytics Articles
Markets are trying to “price-in” an event for which there is no readily known precedent. Volatility will rule until COVID-19-related risks reverse course.
Soon after its launch, it proved to be popular amongst a number of insurers on both sides of the Atlantic.
Solvency II came into life on 1 January 2016, bringing major changes to how insurers in the European Economic Area manage risk and capital, and how they report on their business.
Economic scenario generators (ESGs) are critical to insurers' risk and capital management processes and demands for greater innovation in these offerings is intensifying.
In an era where all eyes are on compliance, regulatory reporting remains one of the most demanding areas for insurers.
End-to-end risk modelling solutions have developed from a need among insurers to have a quick, accurate and reliable understanding of their enterprise risk and solvency positions.
The initial intent of the CECL guidelines was to make loan-loss allowances more reactive to the credit environment. By setting aside greater allowances, organizations would be better prepared for a default.
While bankers are increasingly managing risks related to changes in policy and technology (also known as transition risk), physical risks are not necessarily an obvious set of primary factors for banks' commercial credit portfolio managers originating credit with maturities of three to seven years.
The market value of U.S. common stock has been setting new record highs with regularity. The market appears to be supremely confident of two things.
Highly Commended for Best Fixed Income Paper in the 2019 Savvy Investor Awards, this paper tests the early warning power of the CreditEdge Deterioration Probability (DP) metric for Fallen Angel downgrades.
At the end of 1999, the $510 billion of Baa-rated bonds approximated 24% of the $2.098 trillion of outstanding investment-grade bond obligations of U.S. corporations.
All else the same, the market value of U.S. common equity needs to rise by another 28% before it matches the severity of its gross overvaluation of 1999-2000.
The coronavirus is a serious mounting threat to the fragile Chinese and global economies. It is hard to handicap how broadly the virus will ultimately spread and how virulent it will be, but it has already become highly disruptive to China and increasingly to the rest of Asia. The U.S. will not be immune to its ill effects.
A coronavirus pandemic would be even more of a “black swan” than the global financial crisis and Great Recession of 2008-2009.
This paper examines the change in U.S. imports from China and the rest of the world in the wake of the trade war and attempts to quantify the extent of trade diversion that has taken place because of higher U.S. tariffs on China since 2018.
Highly leveraged corporate balance sheets have often been cited as one of the greater threats to both the most richly valued U.S. equity market since 2000 and a record-long business cycle upturn.
The use of analytics to make decisions has grown increasingly sophisticated over the last few years, with the incorporation of machine learning and artificial intelligence playing a major part. Moody's Analytics gives firms the tools they need to make better, faster decisions.
After shrinking by 0.6% year over year during January-September 2019, yearlong 2019's core after-tax profits may be unchanged annually, at best.
Recent CECL impact disclosures point directly to credit cards as the largest driver of the allowance. We can confirm those recent disclosures by looking at the consumer default volumes chart in Figure 1,which clearly point to the credit card segment as being one of the largest contributors of loss today.
One benefit CECL will bring to the accounting space is moving away from the complicated and burdensome accounting for Purchase Credit Impaired (PCI) assets.
The impending Phase One trade agreement between the U.S. and China has delivered more questions than answers. The Office of the U.S. Trade Representative posted a two-page fact sheet on December 13 detailing the pending agreement in general terms but provided few details.
An overvalued equity market increases the risk of a deep sell-off of equities that will damage corporate credit.
Asia as a region has attracted the largest share of global FDI flows since 2017 and despite the ongoing U.S.-China trade war, the region is well positioned to continue being the top destination for foreign investments in the years ahead.
High-yield bonds have rallied mightily despite the lack of any observable broad-based acceleration of either business sales or corporate earnings
Moody's Analytics' RiskIntegrity Suite is an end-to-end regulatory risk and solvency solution with out-of-the box Solvency II standard formula and internal model capabilities.
Some recent public disclosures by institutions indicate that some lenders are evaluating electing fair value accounting, also known as the fair value option, or FVO, in lieu of applying the Current Expected Credit Losses standard.
Following Jerome Powell's testimony of December 11, Moody's long-term Baa industrial company bond yield fell to 3.98%, which was its lowest close since the 3.95% of August 28, 2019.
Using multiple scenarios in CECL can temper some of the volatility in the economic forecasts – the part that results from our inability to forecast the economy with complete precision.
More than 20% of the European Union's population is at least 65 years of age. Partly because of an unprecedented aging of the EU's slowly growing population, the average annual rate of economic growth for the EU has slowed from the 2.7% of 2004-2007 to the projected 1.2% of 2019-2020.
Auto retention values were not immune to the slowdown in the U.S. economy in the third quarter. Wholesale used-vehicle value retention dropped 1.7% in September on a year-over year basis. This at a time when U.S. economic growth slowed from 3% a year earlier to about 2%