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Global Credit Research - 15 Nov 2012
New York, November 15, 2012 -- Banks around the world issued 15% less unsecured, long-term
debt over the past 12 months, compared with the year-ago
period, as euro area banks face sustained market funding pressures,
says Moody's Investors Service in its new special comment "Moody's
Global Bank Debt Report: Issuance Declines, Driven by Euro
Unsecured long-term debt issued by Moody's-rated banks
amounted to $1.18 trillion over the 12 months ended 30 September
2012, a 15% decline from the same year-ago period.
Global debt issuance is now at approximately half the level recorded at
the peak, during 2007, before the ongoing period of financial
"The global decline has largely been driven by euro area banks,
while issuance has decreased less for banks in most other regions and
many Asian banks are even seeing robust growth," said Tobias
Moerschen, a Moody's Vice President. "Looking
forward, we expect banks in mature markets to rely less on confidence-sensitive
market funds than in the past."
Banks in the euro area experienced a sharp year-on-year
drop (26%) in unsecured, long-term debt issuance tracked
by Moody's for the 12 months ending 30 September 2012 (in US dollar
terms). Moody's notes, however, that euro area
banks saw improved debt issuance in third-quarter 2012 which could
signal a degree of stabilization. Meanwhile, North American
banks saw a 10% decline in issuance during the 12 months ending
30 September 2012, while Asia was the only major region to see a
broad-based increase in bank debt issuance.
Moody's expects that banks in mature markets will shift toward more
stable funding sources over time, because increased investor risk
perceptions restrict demand for unsecured bank debt. The transition
to more stable funding profiles will be particularly difficult for banks
that are affected by the ongoing euro area crisis and for those that have
relied heavily on market funds to date. Actions taken by banks
to alleviate funding pressures include seeking to increase deposits,
raising more covered bonds, and in some cases restricting new lending
and shedding assets.
The new report analyzes unsecured bank debt issuance and balance sheet
data for Moody's-rated banks which account for the vast majority
of all global banking assets. The report provides issuance data
for banks globally, as well as for eight major regions and 26 individual
banking systems. The data is also available in Excel format.
Moody's research subscribers can access this report at http://www.moodys.com/research/Moodys-Global-Bank-Debt-Report-Issuance-Declines-Driven-by-Euro--PBC_145871
And related Excel data at: http://www.moodys.com/research/Moodys-Global-Bank-Debt-Report-Issuance-Declines-Driven-by-Euro--PBC_147183
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Financial Institutions Group
250 Greenwich Street
New York, NY 10007
Vice President - Senior Analyst
Moody's: Global bank debt issuance drops, driven by euro crisis
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
No Related Data.
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