The 20th Bond Investors Congress
Tue 05 - Wed 06 Mar 2013 - The Brewery, London
The 20th Euromoney Bond Investors Congress is now avaialble for viewing on Euromoney Online Channels.
Financial markets, particularly in Europe, have been severely put to the test. Quantitative easing and other forms of extraordinary monetary policy have transformed the risk/reward equation for bond buyers. The complex relationship between public and private debt burdens has made it much harder for investors to work out where contingent liabilities lie.
The 20th Euromoney Bond Investors Congress gathered together more than 450 investors and 50 panellists who shared their thoughts and insights through a series of panels and workshops over the two days. The aim was to Find Growth Strategies in Fixed Income – did we manage to find some?
Andrew Bailey, Deputy Governor, Bank of England and Head of Prudential Regulation Authority, FSA opened the congress stating that the banking crisis has entered a new phase. It has moved on from being a prudential one in nature to focusing more on the conduct of bank business, both domestic and international - with Libor being the most obvious example. According to Mr Bailey improving the standards of the industry cannot be achieved by a rules only system. New rules will require higher standards of compliance and should be accompanied by a judgment based approach.
The Bond Buying in Crisis panel kick-started the conference discussions on a positive note, with our panellists grading the outlook between 6 and 9 (out of 10). The panellists highlighted the concerns that continue to haunt the Eurozone and pointed out that the weakest economies are those that cannot expand fiscally or are able to devalue their currencies.
Christian Eckert, Head of European Fixed Income, Lazard Asset Management and Cosimo Marasciulo, Head of European Government Bonds and FX, Pioneer Investments, both recommended investing in Italian and Spanish government debt this year. While Glenn Hadden, Global Head of Interest Rates, Morgan Stanley favoured investing in the policy of the ECB.
“The event was well attended, providing the perfect opportunity to meet many talented and experienced market participants from a number of different backgrounds. It was excellently managed, creating the right environment for an open and enriching panel discussion.”
Cosimo Marasciulo, Head of European Government Bonds and FX, Pioneer Investments
Another highlight of the first day’s sessions was the presentation on In Pursuit of Financial Repression from Vincent Reinhart, Chief US Economist and Co-Head of the Global Economics Team, Morgan Stanley, who said that episodes of financial repression that end quickly tend to end badly. He hopes that it doesn’t come to that and that developed-world policymakers will still be pursuing financial repression as a way to contain the consequences for years to come.
On the second day, the opening Sovereign Borrowers panel brought together some of the world’s biggest issuers, who surprisingly seemed fairly calm about the future!
In January, the Italian inconclusive elections pushed borrowing costs up, threatening the nation’s control over its debt and re-igniting Europe’s financial crisis. However Maria Cannata, Director General, Public Debt Management, Italian Ministry of Economics and Finance was confident a good solution could be found and assured the audience that demand for Italian bonds was still strong.
Ignacio Fernández-Palomero Morales, Deputy Head of the Treasury, Head of Funding and Debt Management, Spanish Ministry of Economy and Finance, said that Italy’s problems have had little impact on Spanish debt.
Robert Stheeman, Chief Executive, UK Debt Management Office played down Moody’s downgrade of the UK’s credit worthiness and James Clark, Deputy Assistant Secretary for Federal Finance, US Treasury said that US was in a fortunate position because they are able to react.
"Gatherings such as this are critical to understanding the market and policy-related dynamics that drive global financial markets."
James Clark, Deputy Assistant Secretary for Federal Finance, US Treasury
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