Sales of green bonds have increased nearly 20% this year in Europe, reaching €40 billion, as issuers focus on environmental instruments and sustainability. Irish developer Societe du Grand Paris and auto lessor ALD are among companies that plan to issue green notes, while Mitsubishi UFJ Financial Group is preparing a second issuance in 2018.
Steven Maijoor, chairman of the European Securities and Markets Authority, says regulators must strike a balance between risks and opportunities posed by technological innovation. Artificial intelligence lets regulators exert greater control and lets firms comply more efficiently with requirements, Maijoor says in a conference address.
European Central Bank President Mario Draghi urges eurozone banks to reduce nonperforming loans to revitalise lending and to promote industry consolidation. "Low profitability and uncertainty regarding the valuation of legacy assets reduce the appeal of cross-border" mergers and acquisitions, he says.
The Bank of Japan, which has voted to retain a negative short-term interest rate and a long-term rate of about 0%, is the only major central bank left with vigorous quantitative easing. Exiting the strategy could be challenging, with economists saying the central bank could struggle to manage debt, Henry Hoenig and Chloe Whiteaker write.
The Hindenburg Omen, an indicator that emerges when certain negative criteria are recorded on stock charts and that suggests an imminent correction, has appeared at the New York Stock Exchange. However, technical analyst JC O'Hara, CMT, says that the omen is not invariably accurate and that the incidence might have stemmed from poor performance of foreign entities.
The UK's FTSE 100 index has turned to the downside, prompting concerns it is oversold, technical analyst John Burford writes. Elliott Wave analysis confirms the index is in correction but indicates it will resume ascent imminently, with decline likely in the long term, Burford writes.
The debt of companies, governments and households worldwide exceeds levels before the collapse of Lehman Brothers, says Hyun Song Shin, research chief at the Bank for International Settlements. Asset managers have responded to low interest rates by pursuing higher returns from leveraged loans to businesses already carrying substantial debt, he says.
European Central Bank policymaker and Bank of France Governor Francois Villeroy de Galhau urges agreement on a backstop for a proposed bank-resolution fund by year-end. The EU agreed in June to let the fund lend to ailing banks, but Villeroy de Galhau says that details are unresolved and that swift decision-making is necessary so the fund acts effectively.
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