Macaskill on markets: Cutting credit corners won’t sustain commodities boom

There is a near consensus that 2010 will be a banner year for commodities trading. Energy analysts are hard pressed to see anywhere for prices to go but up. TV ads urge householders to cash in their gold to exploit the boom. And banks of all types are scrambling to win a share of the commodities revenue that was once largely the preserve of investment banks led by Goldman Sachs and Morgan Stanley.


Jon Macaskill is one of the leading capital markets and derivatives journalists, with over 20 years’ experience covering financial markets from London and New York. Most recently he worked at one of the biggest global investment banks

But concern is mounting among industry veterans that the latest commodities rush bears one of the hallmarks of other bubbles that ended in disaster for banks: a willingness to cut credit valuation corners in order to win business. Established players say that banks looking to break into commodities dealing are increasingly mispricing the counterparty credit component of derivatives trades with clients.

Macaskill on markets: Cutting credit corners won’t sustain commodities boom

Thanks for your interest in Euromoney!
To unlock this article:

Rebuilding banks from the inside out in the digital age

Eastward bound: Why Gulf banks are tapping Asia’s capital markets

The flat-pricing revolution for inclusive SME finance in Asia

Culture and code: rewiring corporate banking for the digital age

Macaskill on markets: Cutting credit corners won’t sustain commodities boom

Thanks for your interest in Euromoney!To unlock this article:

Rebuilding banks from the inside out in the digital age

Eastward bound: Why Gulf banks are tapping Asia’s capital markets

The flat-pricing revolution for inclusive SME finance in Asia

Culture and code: rewiring corporate banking for the digital age

Thanks for your interest in Euromoney!
To unlock this article: