Accounting & Financial Analysis

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Sovereign and financial crises: Europe and the U.S.

January 18, 2012

Analysis by: GLG Expert Contributor

This is not the first time that sovereign and financial crises have occurred concurrently. There are, however, important differences between Europe and the U.S.. In the U.S., the financial crisis was the primary source of the crisis and extra government spending tamed it by supporting imperilled banks. In  Europe, banks absorbed government debt. What if the likely recession increases that debt burden?  As the S&P downgrading explicitely stated, fiscal discipline will not be enough.

How much longer can the Japanese Yen be a "haven currency"?

December 13, 2011

Analysis by: GLG Expert Contributor

The Japanese Yen has strengthened against other currencies and is currently considered a “haven currency.” This status has been underpinned by Japan’s positive trade and current account balance, which contrasts with pronounced weakness in most of the country’s other economic fundamentals. Japan’s trade and payment fundamentals are changing due to both structural and cyclical causes. This points out that the yen’s status as a haven currency has limitations. Therefore, the yen could and likely will reverse its trend of recent years and weaken in the near to medium term against currencies with stronger economic fundamentals.

Not all bank tech vendors are equal

December 12, 2011

Analysis by:Art Gillis, President,

FIS, Fiserv, Jack Henry and Harland Financial Solutions are in the same business and sell similar products and services to the same financial institutions.  That's where the similarities end.

Eksportfinans downgrade surprises investors

December 5, 2011

Analysis by: GLG Expert Contributor

At a time of financial and economic uncertainty, the decision of Norway to stop official export credit business done by Eksportfinans on behalf of the state has resulted in a seven notch downgrade for the company  by Moody's and a five notch downgrade by S&P, the former to Ba1 and the latter to BBB+. Both raters have the company on negative watch.

Why wasn't Italy's situation spotted earlier? And what's next?

November 22, 2011

Analysis by: GLG Expert Contributor

Contagion is a remarkable phenomenon, transmitting itself with deadly stealth of the plague. One minute you’re fit and well, the next you’re dead. Financial contagion works in a similar way. In trying to understand why Italy has suddenly become the epicenter of such contagion we need to understand what left it so exposed.