Credit & Risk

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Made in China No More: How the coronavirus is forcing a rethink of the global tech supply chain

6 min readThe global tech supply chain is about to be turned upside down. Tensions between the U.S. and China, heightened in a two-year-long trade war, were already instigating conversations regarding relocating and reconstructing the supply chain. Now that the coronavirus has further exposed the limited geographic diversity and concentration levels in the supply chain, it is…

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Powell’s Got the Power: How the Fed Brought Funding Markets Back from the Dead

5 min readFunding markets are back from the dead. A little over two months ago, liquidity in short-term markets all but dissipated amidst a broader market panic in reaction to COVID-19. But fast action by the Fed prevented what might have turned into a full-blown liquidity freeze reminiscent of the one that helped precipitate the 2008 financial…

How to Navigate COVID-19 Credit and Interest Rate Risks

2 min readTrillions of dollars of support from the Fed have helped keep financial markets open. Trillions more from Congress are supporting consumers. But what will the next phase of the COVID-19 crisis bring? And what does it mean for institutional cash managers? You can find many of the answers in our latest research report, Institutional Cash…

Corporate Leverage: Par for the Course or Harbinger of an Upcoming Crisis?

Corporate Leverage: Par for the Course or Harbinger of an Upcoming Crisis?

20 min readDOWNLOAD FULL REPORT Abstract As the post-recession credit cycle matures and a period of historically low interest rates ends, investors are paying increased attention to the rise of corporate leverage. Companies have borrowed heavily in the past decade to fund M&A activity and investor payouts. This has resulted in significant growth in BBB-rated debt for…

Cautious Cash Investors Eye Burgeoning Corporate Debt

2 min readRemember CDO’s, those collateralized debt obligations at the center of the massive mortgage meltdown in 2008? These days, you can expect to start hearing about CLO’s, collateralized loan obligations, that are at the tip of a rapidly growing iceberg of leveraged corporate debt. The recent growth of CLO’s is only one of many warning signs…

Beyond Bank Deposits and Money Market Funds

2 min readEver since reforms inspired by the financial crisis required prime money market funds to float their net asset values, institutional cash investors have been searching for alternatives that will provide the same type of dollar-in, dollar-out liquidity, safety of principal and yield that the old prime funds offered. And now that the Fed’s interest-rate hikes…

The Yield Curve as a Recession Indicator and its Effect on Bank Credit Quality

The Yield Curve as a Recession Indicator and its Effect on Bank Credit Quality

6 min readIs an inverted yield curve still a reliable predictor of an impending recession? And will the recent flattening yield curve affect bank credit quality? Currently, with the narrowest spread between the 2-Year U.S. Treasury bill and the 10-Year U.S. Treasury note since the 2007 recession, both those questions are on the minds of treasury professionals…

A Decade After 2008, Counterparty Risk is a Growing Concern

2 min readOne of the great lessons we learned from the 2008 financial crisis was that the world is not as safe as we often think. That’s as true today as it was then, even after extensive industry and regulatory efforts aimed at the financial system. Corporate cash investors are confronting a financial landscape that’s even more…

Counterparty Risk Management for Corporate Treasury Functions

Counterparty Risk Management for Corporate Treasury Functions

11 min readAbstract Experience has taught us that counterparties can fail with little warning. Counterparty risk management has become more challenging in recent decades due to concentrated exposures, complex financial instruments and evolving bank credit. Corporate and treasury organizations should manage this risk proactively, have an integrated risk policy across business lines, diversify risk by setting exposure…