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Business Insights

Whitepaper
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Best Practices for SaaS Security

This whitepaper gives an overview of the security concerns about Software as a Service (SaaS) in the banking and financial services sector and highlights best practices for technology, business culture, governance, and compliance.

October 2018

Article
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Weekly Market Outlook: Financial Market Volatility May Soon Influence Fed Policy

Free-falling share prices might soon drive the 10-year Treasury yield under 3%. The market value of U.S. common equity was recently 7.4% under its record high of August 29, 2018. In the event the equity market sinks 10% under its current zenith, the containment of inflation expectations supplies the Fed with more than enough leeway to temporarily halt its ongoing normalization of monetary policy. When monetary policy lacks precedent, flexibility is necessary. Never before has the Fed simultaneously firmed policy by both hiking fed funds and reducing its holdings of Treasury bonds and agency mortgage backed securities.

October 2018
John Lonski, Yukyung Choi, Franklin Kim, Katrina Ell, Barbara Teixeira Araujo,  Ryan Sweet, Michael Ferlez

Article
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Weekly Market Outlook: Equities Suggest Latest Climb by Treasury Yields Is Excessive

Share prices recently dropped in response to an unanticipated and possibly fundamentally overdone jump by Treasury bond yields. Nevertheless, the market value of U.S. common equity may need to drop by at least 5% from its current record high if a flight from risk is to prompt a flight to quality that is capable of lowering Treasury yields in a lasting manner. A convincing fundamental justification for the latest ascent by Treasury yields is elusive. U.S. consumer price inflation remains well contained. August 2018's PCE price index rose by merely 0.1% from July as its year-to-year increase dipped from July's 2.3 to 2.2%. More importantly, the core PCE price index, which excludes often volatile food and energy prices, was unchanged from the prior month, which left its yearly increase at 2.0% for fourth consecutive month.

October 2018
John Lonski, Yukyung Choi, Franklin Kim, Katrina Ell, Barbara Teixeira Araujo, Reka Sulyok,  Ryan Sweet, Michael Ferlez

Webinar-on-Demand
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Identifying At-Risk Firms in Your Private Firm Portfolio

Identifying At-Risk Firms in Your Private Firm Portfolio

October 2018
Dr. Douglas Dwyer, Gustavo Jimenez , Ziyi Sun

Article
Business People DIscussion Brainstorming Teamwork Concept

Weekly Market Outlook: Profits Determine Effect of High Corporate Debt to GDP Ratio

Profits Determine Effect of High Corporate Debt to GDP Ratio: As of 2018's second quarter, the gross debt of U.S. nonfinancial corporate businesses was at an unprecedented 45.8% of GDP, where the ratio is a moving yearlong average. Data from the “Financial Accounts of the United States,” formerly known as the “Flow of Funds Accounts,” is best viewed from the perspective of a moving yearlong average mostly because the quarterly data are frequently subject to substantial revisions, where even the moving yearlong averages can be altered considerably.

September 2018
John Lonski, Yukyung Choi, Franklin Kim, Katrina Ell, Barbara Teixeira Araujo,  Ryan Sweet, Michael Ferlez

Article
Stock Market Graph and Bar Chart

CECL: Credit Cards and Lifetime Estimation - A Reasonable Approach

Many institutions are struggling to apply the CECL standard as it pertains to credit cards, and in particular determining the lifetime value for credit card portfolios. In this paper, we explore the different approaches to evaluating lifetime estimates for the credit card portfolio.

September 2018

Webinar-on-Demand
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Improve Your Lending with Scores from RiskCalc™ Small Business

Moody's Analytics recently released the RiskCalc™ Small Business solution as part of our ongoing efforts to help lenders better understand and serve their small business clients.

September 2018
Dinesh Bacham, Lucia Yang

Article
Business People DIscussion Brainstorming Teamwork Concept

Weekly Market Outlook: Higher Interest Rates Suppress Corporate Borrowing

An abatement of tariff-related fears reduced the uncertainty surrounding a positive outlook for US corporate earnings. In response, the market value of US common stock quickly approached its record high of August 29, 2018. Moreover, high-yield bonds rallied from already richly-priced levels. In turn, a recent composite high-yield bond spread was thinner than 340 basis points (bp) for the first time since the middle of April 2018.

September 2018
John Lonski, Franklin Kim, Yukyung Choi,  Ryan Sweet, Barbara Teixeira Araujo, Reka Sulyok, Katrina Ell, Faraz Syed

Presentation
Chess pawns in a circle

Improve Your Lending with Scores from RiskCalc™ Small Business

Improve Your Lending with Scores from RiskCalc™ Small Business

September 2018
Dinesh Bacham, Lucia Yang

Article
Stopping the domino effect concept for business solution, strategy and successful intervention

Weekly Market Outlook: Middling Ratio of Net Corporate Debt to GDP Disputes Record Ratio of Corporate Debt to GDP

First-quarter 2018's record ratio of U.S. nonfinancial-corporate debt to GDP has been cited as the harbinger of a steep upswing by corporate credit defaults once profits shrink materially again. However, first-quarter 2018's ratio of net nonfinancial-corporate debt to GDP supplies a far less ominous outlook, mostly because the liquid assets of nonfinancial corporations have been outpacing the accompanying growth of corporate debt. In terms of moving yearlong averages as of March 2018, the 11.4% annual increase by liquid assets outran the accompanying increases of 6.0% for corporate debt and 4.3% for nominal GDP.

September 2018
John Lonski, Yukyung Choi,  Ryan Sweet, Barbara Teixeira Araujo, Reka Sulyok, Katrina Ell

Article
Arrow head with Financial chart and graphs on city background

Weekly Market Outlook: There's No Place Like Home for U.S. Investors

The U.S. economy and financial markets have been pulling away from the rest of the world. Of special importance is the lagging performance of emerging market economies, which, not too long ago, had been the primary driver of world economic growth. The combination of higher U.S. interest rates and the relatively stronger performance of the U.S. economy has triggered a notable and potentially destabilizing appreciation of the dollar versus a host of emerging market currencies.

September 2018
John Lonski, Njundu Sanneh, Yukyung Choi,  Ryan Sweet, Barbara Teixeira Araujo, Reka Sulyok, Katrina Ell

Article
Modern empty interior office facing city skyline

Weekly Market Outlook: Significant Differences, Eerie Similarities

The U.S. business cycle has entered its boom phase. This is a period that typically comes closer to the end of the cycle, just prior to a recession. It is characterized by robust economic growth, tightening labor and product markets, intensifying wage and price pressures, monetary tightening, and higher interest rates. Another feature of the boom phase of a business cycle is excessive risk-taking somewhere in the financial system. This fuels the boom and is eventually at the center of the subsequent bust. Subprime mortgage loans were the obvious culprit a decade ago, runaway internet stocks that pumped up a stock market bubble were the problem in the early-2000s recession, and the savings and loan crisis incited the early 1990s downturn.

August 2018
John Lonski, Yukyung Choi, Njundu Sanneh, Mark Zandi,  Ryan Sweet, Barbara Teixeira Araujo, Katrina Ell, Faraz Syed