April 2019

Leafing through how the industry has changed this past half century.

April 2019

This month, Euromoney’s 50th anniversary coverage comes to the global capital markets.

Few things age as ungracefully as technology, and the pages of Euromoney’s archives are a treasure trove of the weird and wonderful gizmos that banking has embraced.

Leveraged finance has contributed to plenty of crises over the last 50 years, and the market is bigger and deeper than it has ever been – does that make it more disciplined or more dangerous?

When the newspapers of the day refused to publish prices from the new international bond market growing up at the end of the 1960s, Euromoney was founded to report on the business. The rise of international capital markets since has been astonishing, a driver of growth and development across the world but also a source of periodic crises. Euromoney has reported on market failures and resurgences, on great deals and disasters, and on pioneers and villains. Now, as markets still struggle to cope with the aftermath of 2008, we look forward with hope and anxiety to what might come next.

Euromoney has covered every twist and turn of the capital markets since it was launched 50 years ago. Our archive serves as a history lesson for all practitioners in the market today.

Capital markets bankers have spent much of the last five decades dreaming up products to help clients and themselves make money, but is process, which has largely taken a back seat, now becoming the battleground?

Capital markets banks are investing heavily in technology, partly in response to the threat from fintech disruptors but also just to keep their businesses running. As their revenues come under pressure, they are starting to think about adding a new stream – selling technology.

Pricing new issues on intuition and market feel is ancient history – artificial intelligence and algorithms are setting the market price for credit, using factors and correlations humans can guess but not follow. Is AI the latest black box risk that will bring illiquid credit markets low or could it make them more efficient?

The LDC crisis, Black Monday, LTCM, the GFC – the past 50 years in global finance have been defined by disasters rather than successes. Why do banks and investment banks lurch from crisis to crisis – and will it ever change?

Market veterans discuss how innovation in derivatives helped to open debt markets, hedge risk and tailor investments, before threatening the stability of the system during the global financial crisis of 2008. Can that early spirit of creativity be harnessed for today’s markets?

Big pools of private capital, led by sovereign wealth funds, private equity sponsors and family offices, now dominate capital formation in the key growth industry sectors of technology and biotech and the expanding markets of Asia. New tech will let networks of private investors connect and exchange it more easily.

In business school they teach you that rising equity markets drive increased mergers and acquisitions activity, but perhaps it is really the debt markets that have driven the booms and busts in M&A. Some of the smartest practitioners in financial advisory look back over their careers.

After so long, private bank clients and even retail investors are no longer happy with the returns from government bonds; instead, they are searching for yield and pushing up the value of risk assets.

Firms are funding social and environmental projects on the one hand and fossil fuels on the other – it’s time to show they care.

Germany may conduct a strange experiment in state-sponsored investment banking if a merger between Deutsche Bank and Commerzbank proceeds.

The news that Garth Ritchie, head of investment banking at Deutsche Bank, is being paid €250,000 a month for extra responsibility 'in connection with the implications of Brexit' has been condemned in Germany, where politicians and union leaders are preparing to oppose a potential merger with Commerzbank and associated job cuts.

The sharp sell-off in credit in December and rapid recovery in the first quarter is a worrying sign of market dysfunction.

However the situation plays out, it might be the smaller firm that ends up in the stronger position.

JPMorgan's JD is still down the pay scale compared with Christianity's JC.

Barclays doesn’t want Tim Throsby’s exit to be about Tim Throsby, but it is.

Little confidence profit warning relates to one-off; cost cuts not enough to compensate.

New chief executive says ‘smart simplicity’ hold key to success for Russia’s largest privately owned bank.

Russia's Lebedev goes with his gut feeling when it comes to gifts.

From Deutsche Bank to Santander or ING, banks in Europe need to change with the times and accept accountability to a wider public, represented by their governments: as with weak capital, deficient ethics will only entail greater state control.

Thursday’s announcement by Commonwealth Bank of Australia (CBA) that it is suspending the sale of its wealth business may trigger similar turnarounds by other big four banks. They have unexpected latitude after the Royal Commission.

The performance of the share price in Sea was unusually strong; part of the reason is the magic name Tencent on the shareholder register.

Andrea Enria must open up the European Central Bank’s (ECB) bank data and supervision to scrutiny, but he faces resistance, and not just from banks.