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BCM International Regulatory Analytics's Blog

The Risk Telescope — IMF Firewalls and Political Math

April 22, 2012 Comments (0)

​Today’s issue of The Risk Telescope focuses on the political math supporting the IMF’s expanded firewall facilities, relying heavily on pie charts and tables.  The conclusion is that the firewall is neither as large nor as solid as initial media and official statements suggest.  Moreover, by potentially over-reaching on the rhetoric in order to generate good headlines, the process may be raising expectations about the capacity of the IMF or the euro area to meet near-term needs...


April 19, 2012 Comments (0)

Six months ago, clients and subscribers to The Risk Telescope were alerted to building centrifugal forces placing pressure on global and euro area economic integration that took generations to build.  Six months ago as well, clients and subscribers to The Risk Telescope were alerted to looming supply and demand pressures in the high-rated sovereign bond sector.  At the end of the year, The Risk Telescope dubbed 2012 as the “year of living dangerously” and explained why.  Yesterday,...

The Risk Telescope — Delhi, Copenhagen & DC

March 30, 2012 Comments (0)

On opposite sides of the world in the last 24 hours global leaders laid out their respective visions for the trajectory of global economic policy.  Leaders from Brazil, Russia, India, China and South Africa met in New Delhi yesterday and issued the “Delhi Declaration.”  EU and eurozone leaders (and their finance ministers) met in Copenhagen, and Eurozone leaders issued a statement today.  In between, physically and philosophically, sit the International Monetary Fund (IMF) and the United...

The Risk Telescope — The Day After

March 11, 2012 Comments (0)

A collective sigh of relief is nearly audible this weekend.  At least one set of contractual obligations (credit default swaps) will be honored on time, in full, and in the manner anticipated when the contracts were written.  The months-long anticipation of this event, paired with generous (3-year) bank liquidity support by the European Central Bank and the direction of official sector support for European banks through the second bailout for Greece, means that paying out on these contracts...

The Risk Telescope — Mexico City Ministerial Outcomes

February 26, 2012 Comments (0)

One day, when the history of the G20 is written, the G20’s first Mexico ministerial will be remembered as the meeting when the emerging markets stood with the United States to ask Europe please to stand behind the eurozone construct with real money, not guarantees or promises or endless talks.  But today and tomorrow the headlines will largely focus on practical reality: no real decisions have been taken.  Decisions have been delay until mid-March, mid-April (after crucial decisions on Greece’s...

The Risk Telescope — G20 Preview

February 23, 2012 Comments (0)

Once upon a time, the G20’s ambitions were expansive.  The London, Pittsburgh, Toronto, and Seoul summits were premised on a belief that a second Bretton Woods moment had appeared.  Policymakers united in fear found consensus on reform measures relatively easily. How the world has change.  2012 opens with the world’s major economies increasingly on divergent pathways and with starkly different economic growth prospects. Consensus is harder to reach.  Implementation momentum is waning. This...

The Risk Telescope — Credit Rating Agency Regulation

January 24, 2012 Comments (0)

Finance is filled with informational asymmetries.  Lenders have more information about their borrowers than outsiders (assuming the lenders have done their due diligence).  Regulators have more information about the banks they oversee than outsiders (including shareholders).  Periodic abuses of those informational asymmetries over the decades has led to a range of regulatory requirements designed to increase transparency and level the playing field among different types of agents that require...

The Risk Telescope — The Great Schism Part II

December 31, 2011 Comments (0)

Earlier this month, The Risk Telescope dissected The Great Schism in Brussels.  It suggested that persistent bickering between the U.K. and its EU partners on technical financial services issues seemed likely and that the latest eurozone plan seemed destined to fall short. Since then, various key financial regulations have failed to complete the EU legislative process due to lack of agreement with the UK.  The donation package for the IMF has failed to reach its stated target funding amount,...

The Risk Telescope

December 11, 2011 Comments (0)

For the last two and a half years, the eurozone crisis has been mostly a regional affair.  The great questions of the day revolved around: (i) whether (and then when and under what conditions) fiscal union might occur; (ii) which countries might be most likely to exit; and (iii) what kind of financial resources Europe would be willing to devote to resolve its deepening crisis. Part I of this publication (issued today) focuses on the political and economic dynamics in Europe.  It analyzes the...

The Risk Telescope — The IMF and the Eurozone

December 4, 2011 Comments (0)

We stand today at the threshold of a massive event horizon.  The decisions taken by policymakers internationally before year-end will define the scale and scope of the fallout from the Eurozone.  They will also lay the foundations for how financial systems (e.g., risk pricing formulas; risk management systems; regulatory oversight functions) will operate in the future. We do not yet know exactly how the Eurozone sovereign bond crisis and fiscal union arrangements will be resolved.  The details...