A hard landing in China remains a looming threat to the global economy and especially to the rest of Asia. This paper considers the consequences of a China debt crisis for the Chinese and global economies, with a special focus on Southeast Asia and emerging markets.
The importance of accurate and timely data on household credit conditions became clear during the global financial crisis. Quickly rising delinquencies and foreclosures should have been a warning to lenders and regulators to significantly tighten the spigot on new lending that was wide open during the pre-crisis boom. However, partially due to data limitations, many financial institutions were surprised by the weakening of household balance sheets. By the time they realized the severity of the problem, it was too late to act.
The latest rally by Treasury bonds drove Moody's long-term industrial company bond yields down to new 63-year lows. On August 14, the single-A industrial company bond yield closed at 3.30% and the Baa industrial yield ended at 4.08%.
The global economy is navigating troubled waters. The unresolved and significant geopolitical risks plaguing the global economy are exacerbating the slowdown in demand.
More than a decade after the financial crisis that was caused in significant part by debt-burdened households, there is no indication that household debt will be at the center of the next economic recession.
The industry is currently a hive of CECL-related activity. Many banks are busily testing their systems or finalizing their preparations for the go-live date, which is either in January 2020 or somewhat later, depending on the organization. Some are still making plans for implementation, and the rest are worried that they should be.
With many of the larger SEC filers well ahead in their CECL preparations and gearing up for validation, we examine how the requirements of an R&S forecast and reversion may be interpreted.
It was a tumultuous week. Volatility will lurk until trade issues are resolved. Perhaps the best markets can hope for on the trade front is a long-lived truce.
We demonstrate how the pattern of trade and the rules that have governed trade have changed dramatically over the past two years from a system that was set up shortly after World War II and that more or less thrived until the current trade war.
The US-China trade war has gone down a darker path. The trade war has escalated beyond expectations and the stakes are high for the global economy.
Since 1984, there have been seven distinct series of Fed rate cuts. Four of the seven rate cut episodes occurred amid a mature business cycle upturn and managed to stave off a recession. They happened in 1985, 1987, 1995, and 1998.
Forecasts of a prolonged depreciation of the dollar exchange rate may be overlooking to the increased importance of U.S. spending as a driver of global economic growth.
Regulatory reporting has emerged in recent years as a critical business function that needs to be managed accurately, efficiently and transparently, even though it is an area where capital markets firms tend not to be able to leverage as a competitive differentiator.
The release of second quarter corporate earnings is moving into full gear and investors are not entirely happy with the results.
The theory that banks are now safer because of CCAR, though, has not yet been tested.
Baa3-grade issuers constitute the bottom rung of the investment-grade ratings ladder. Once a Baa3 rating is subject to a “fallen angel” downgrade to speculative-grade, investors who are mandated to hold only investment-grade obligations must sell the now high-yield debt.
Based on an update of the economy's structural variables, the Central Bank of Chile relaxed monetary conditions in June. Using statistical methods, we arrived at the same conclusion in terms of Chile's potential output; however, the estimation of monetary neutrality changes significantly with the new methodology to compute inflation and with the change in expectations of the monetary policy rate. The high sensitivity of estimates of non observable variables––such as potential output and neutral interest rate––can lead to monetary decisions that may become inconsistent.
Rate cut or not, the Federal Reserve's easing bias is a relief for the region.
We examine the physical risk and quantify the economic costs of climate change using the Moody's Analytics Global Macroeconomic Model.
Sequential declines by the Bureau of Economic Analysis' quarterly estimate of nonfinancial-corporate profits from current production, or core pretax profits, often reveal little about the current or future states of the business and credit cycles.
Stress‑testing plays an important role in enhancing risk management practices. However, it requires significant co‑ordination and participation, and banks must optimise their resources, technology and data to ensure they can respond quickly to management and regulatory requests.
The credit loss and impairment analysis demanded by the International Financial Reporting Standard (IFRS) 9 and Current Expected Credit Loss (CECL) accounting standards requires appropriate data, risk parameters and models, and a platform to perform the calculations in an automated manner.
As financial markets become more complex and integrated, understanding linkages requires a multidisciplinary perspective. Moody's Analytics' RiskConfidence enterprise system offers integrated asset‑ liability management (ALM), funds transfer pricing (FTP), liquidity risk management, and business and regulatory reporting
Accounting and regulatory requirements for financial institutions demand transparency in credit risk metric calculations, adequate data quality and robust model development data often spanning full credit cycles.
The Moody's Analytics suite of wholesale credit scoring models and solutions cover the market from small businesses to large private and public companies, to commercial real estate and project finance. Applications include pre‑qualification, origination, counterparty risk assessment, benchmarking,
Both the corporate bond and equity markets responded positively to the latest drop by Treasury bond yields and the likelihood of at least two reductions of the federal funds rate during the remainder of 2019.
Loan-loss provisioning models must take a variety of economic and client factors into account, but, with the right approach, banks can develop sensible loss forecasts that are more accurate and less susceptible to volatility.
This paper explores the CECL standard's background, the choices community banks, regional banks, and credit unions face, and some suggested approaches for dealing with these challenges.
According to the Federal Reserve's “Financial Accounts of the United States”, first-quarter 2019's outstanding debt of U.S. nonfinancial corporations advanced by 8.1% year-over-year to a new record high of $9.926 trillion.
The policy rate was cut based on a new estimation of the output gap.