SVB and Interest Rate Risk Basics
The collapse of SVB is a sobering reminder of a risk that lay mostly dormant for the past decade - interest rate risk. This risk is fundamental to all fixed income portfolios, and it's important to understand how to measure and mitigate it for institutions of all sizes.
Fixed Income ETFs: Empowering New Managers to Succeed
New regulation has spurred greater competition and innovation in the fixed income ETF marketplace by lowering barriers to entry. At the same time that the rule created new opportunities, it also introduced challenges and complexities that have kept some prospective issuers on the sidelines and prevented others from reaching their full potential. Fortunately, these challenges can be overcome with the right set of tools.
Mr. Goldman’s Hat
One of the reasons that Decameron Technologies came into existence is that my co-founders and I saw an opportunity to democratize access to some very powerful tools, applying them to challenges faced by new entrants into the lending and investing markets. As financial conditions change rapidly, the solutions we provide have shifted from “nice-to-have for a rainy day” to “necessary for survival.”
LIBOR Transition Part 1.5: SOFR and the Debt Ceiling
The recent battle over the debt ceiling provides a timely distillation of the problems that can arise when the transition from Libor to SOFR forces market participants to swap credit sensitivity for repo rate sensitivity.
ESG Bonds: New Tools Needed for Investors and Stakeholders
Much work has been done in pricing ESG risk in issuer credit analysis or stock-valuation analysis, but we are just at the beginning stages of thinking through all the issues facing the valuation of ESG bonds. As such, investors will need proper modeling tools to evaluate ESG bonds to understand how they stack up against the rest of their fixed income portfolios.
LIBOR Transition: The Tide is High
One of the most pressing things happening in rates markets is the imminent discontinuation of Libor. Understandably, much of the discussion over the past few years has centered on the operational, “Y2K”-style issues of the transition. However, the real story is in the market risk implications of the change.
Bank Stress Tests: Overbuilding the Bridge
The requirements of stress testing places significant burden on banks, making it tempting to apply overly simple and conservative models. This satisfies the testing regime, but leads to exaggerated capital requirements and unnecessary restrictions on the scope of business.