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Moody's Analytics Insights

Article
illuminated charts and graphs

Weekly Market Outlook: Stepped Up Use of Loan Debt May Yet Swell Defaults

Credit quality benefits to the degree a borrower has locked in continued access to debt capital and has capped the interest expense of outstanding debt. Basically, long-term debt having a fixed interest rate is preferred to short-term debt having a variable interest rate. Through the first nine months of 2018, U.S. corporate bond issuance incurred year-over-year setbacks of 21% for investment-grade (to $698.9 billion) and 25% for high-yield (to $151.5 billion).

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

Whitepaper
insight default image

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

Webinar-on-Demand
Business and financial report

Webinar: Australia's Economic Outlook Amidst the Housing Slowdown

In this webinar, Moody's Analytics economists discuss Australia's macro and regional economic outlook and the impact on the housing market.

October 2018
Moody's Analytics

Article
Beijing Financial Street image

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

Whitepaper
Image of possible yield curve and equity evolution

Fast Projection of Reserve and Capital Requirements with Proxy Functions

An emerging business requirement for North American insurers is the ability to project forward stochastic reserve and capital requirements under various planning scenarios to a specific future date. In this paper we consider applying proxy functions to this task, using function fitting techniques described in our previous research paper Fitting Proxy Functions for Conditional Tail Expectation: Comparison of Methods.

October 2018
Aubrey Clayton,  Dr. Steven Morrison

Article
illuminated charts and graphs

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
Red pencil standing out from crowd of identical black pencils

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
Double exposure of city and graph on rows of coins for finance and banking concept

Webinar: Auto Lease Pricing Under Economic Uncertainty

Join us as Lead Auto Economist, Michael Vogan examines the recent performance of the used car market and lease residuals portfolios.

September 2018

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