Regular readers know that since the beginning of the financial crisis in 2007, market participants have been unable to determine which banks are solvent and which banks are not. As a result, the unsecured bank debt market is effectively frozen and the secured bank debt market is slowly freezing over.
Bond issuance by banks is at its lowest level in a decade...
Global debt issuance by banks stands at $1.26 trillion – the lowest since 2002 – according to figures from Dealogic, the data provider.
The amount of senior unsecured debt, a mainstay of bank funding, is at its lowest since 2003.
Issuance of covered bonds – debt secured against pools of loans that carries an additional bank guarantee – has also fallen, and the total raised via asset-backed securities continues to be a fraction of pre-subprime crisis levels....
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