The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.
OPINION

Inside Investment: Crisis aftershocks

The credit crunch and recession will reshape finance and markets in some surprising ways.

andrewcapon.gif

The law of unintended consequences is right up there with the diktat of sod and gravity as among the ineluctable forces of the universe. The credit crunch and attendant economic crisis have wrought chaos. Some of this has been completely predictable. Did anyone really believe that house prices could only ever rise, credit was a limitless free good or that CDO-squared was an important financial innovation?

However, some of the collateral damage has been inflicted in surprising places.

1. De-equitization Do you remember when the fashion for share buybacks and private equity buyouts had commentators burbling on about de-equitization? For a fleeting moment the phenomenon was real. In 2006, US companies raised $41 billion through initial public offerings, less than half the $97 billion of public-to-privates. UK companies raised $19 billion, but $27 billion of equity capital left the market.

So far this year, equity capital raisings have hit $136 billion in Europe and $100 billion in the US. There will be more to come. The peak year for European equity capital-raisings following the last recession was 1993. That was after the economy bottomed and growth had resumed.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree