North America

Direct lenders to risky borrowers take comfort from their seniority in the creditor hierarchy. But stressed borrowers could jeopardise this as they struggle to attract new funding.

A private credit market growing so fast, away from the oversight of bank regulators, may be a new source of systemic risk. With smaller investors taking greater exposure to an asset class whose high returns and low losses look almost too good to be true, there could be trouble ahead.

Junior bankers should relax about the threat to their jobs from AI and lean into opportunities to bluff their way to Wall Street glory.

A move back up in rates is creating a PR battle among Wall Street banks. JPMorgan was punished for a cautious outlook, Goldman Sachs promoted strong fixed income trading results and Bank of America projected a Zen approach to rate moves.

There almost certainly won’t be a Truss/Kwarteng-style meltdown in the US Treasury market – just persistent inflation, high rates, volatility and likely some form of monetary financing.

The decision by the US SEC to drop mandatory Scope 3 reporting weakens global emissions reporting standards. However, many corporate issuers are already using Scope 3 performance targets on sustainability-linked transactions for non-regulatory reasons. Are the debt and equities markets leading companies onto ESG ground upon which regulators fear to tread?

Asset managers and industry regulators face operational challenges around the tokenization of private assets.

The Basel committee is shocked – shocked! – that some banks might be reporting inflated leverage ratios.

The Fed chair has made a remarkable, virtually unconditional surrender to opponents of his plan for Basel III implementation in the US. The tactical withdrawal is embarrassing, but it makes strategic sense.

Luring star bankers from rivals – like Citi’s appointment of JPMorgan veteran Viswas Raghavan – can bring hidden costs beyond the expense of replacing stock options for the lucky new hire.

Leading commercial banks are focusing on their approach to relationship management to reassure corporate customers that they are being listened to.

Chief executive Jane Fraser has been true to her promise of a marquee hire to run Citi’s banking division, with the appointment today of JPMorgan veteran Viswas Raghavan. He brings a wealth of both transactional and operational management experience, but the symbolism of his arrival may be just as important.

Even after the rally on its latest restructuring plan, investors still value the UK bank at such a wide discount to book that management must consider radical action.

Direct lenders commanded generous terms on leveraged buyout financing last year, but volumes were low and, now that they show signs of revival, the banks are competing once more.

One of the first edicts handed down by Citi’s wealth head is to tell all private bankers to track and record client calls. It has ruffled feathers at the US lender, but if it transforms the unit into the powerhouse CEO Jane Fraser wants it to be, then so be it.

Corporates continue to exhibit worrying levels of complacency when it comes to the implications of rate rises for their bottom line.

Former bank examiner Alessandro DiNello stresses resiliency of deposits as NYCB strives to build capital after higher provisions and ratings downgrades.

Investors will be hoping that the fall in the value of Bitcoin since US regulators approved the listing and trading of spot Bitcoin exchange-traded products is not a sign of things to come.

After a dire couple of years, the hope had been that the only way was up for US regional bank M&A. But this week’s trauma at New York Community Bank has demonstrated some of the problems that can catch out the unwary as expansion takes them into new regulatory territory.

Losses on commercial real-estate loans at US regional banks should surprise no one; risk at the heart of the US financial system thanks to weak regulation should shock us all.

Trade-receivables securitization transactions are flourishing as corporates seek more affordable access to long-term financing.

Management changes expand the responsibilities of Marianne Lake and Jennifer Piepszak, lead candidates to one day head JPMorgan, but there is another contender.

The SEC wants us to be thinking about special purpose acquisition companies again.

Wall Street bankers tempted to pick a fight with the Federal Reserve should take a lesson from the insider trading plea deal by investor Joe Lewis.

Opposition to the proposed Basel III endgame for US banks is now so widespread that a climb down by the Federal Reserve is likely. Wall Street bankers like Jamie Dimon can stop crying wolf about increased capital requirements and think carefully about publicly threatening their regulators.

While the world’s biggest markets are still preparing for T+1 settlement, talk is growing of the next step – but going any faster would mean a total reworking of how markets function.

It is not hard to find short-term worries over global markets’ state of readiness for the US’s transition to one-day settlement in late May. But even if the UK, Europe and those Asian markets still using two-day settlement can adapt to the shift in the longer term, they will also face intense pressure to lessen their dislocation from the US cycle by copying its move. Many also fear the ultimate end-game of same-day or even instant settlement.

Corporates are adopting a variety of approaches to mitigate the impact of uncertainty in foreign exchange markets caused by divergence in economic policy and performance.

They already dominate the investment banking business in Europe, and now the leading US banks have their eyes on an even bigger prize. They see their vast investments in the digital technology transforming payments and transaction services and their retained global presences as the keys to winning even greater revenues from Europe’s midsize corporates.

Regulators are making more mileage out of their settlement with Morgan Stanley than the outcome really deserves.