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Opinion

Off the record

October 2021

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"Getting regulated takes time and this is a new product. While we went through regulatory approval, we toned down some of our activities. But now we have the licence we are looking to really push forward again”

Crypto products may be new, but the ex-banker running this firm suggests some things never change


“Covenants don’t work unless they actually have security. You can have all the covenants in place, but if you can’t reach the asset you’re in a bind. The reality is, this has been a known risk for 10 years” 

A high-yield banker in Hong Kong looking at the fallout from Evergrande says investors shouldn’t bother looking to covenants for help


“Loss-crystallization will not be homogenously distributed across creditors” 

Another analyst struggles to find a polite way to tell those same investors they are going to lose their shirts


“Banks have a lot of smart people around, so while they won’t say it publicly I’m sure one question internally is not ‘how can we game the system’, but ‘how can we do something that we have been doing for decades, which is arbitraging the regulators’”

This analyst doesn’t think leopards are going to change their spots when it comes to climate stress tests




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