As a consequence of the upcoming economic crisis triggered by the Covid-19 situation, US and European banks are expected to book more than $50bn of charges on bad loans in the first quarter of 2020. The accounting rules that dictate the way banks provision for loan losses are crucial because they directly affect the ability of banks to continue […]
There are only two types of companies: Those that have been hacked and those that don’t know they have been hacked.
– John T. Chambers (2018), American Businessman
The Privacy Rights Clearinghouse defines a data breach as “a security violation in which sensitive, protected or confidential data is copied, transmitted, viewed, stolen or used by an unauthorised individual.” There have been […]
In her final article at the Financial Times, business editor Sarah Gordon summarises what she learned over 20 years and concludes, “Many businesses are badly run, but business is not bad”. It is a pretty damning conclusion, supported by the large list of examples she offers. Her conclusion does not surprise me. In my past writings I have often referred […]
We examine the effect of capitalisation versus expensing on the amount of UK firms’ research and development (R&D expenditures). We focus on the years immediately before and after the UK switched from the UK Generally Accepted Accounting Practice (UK GAAP) to International Financial Reporting Standards (IFRS) in 2005. Under UK GAAP, firms had the option to capitalise or expense […]
Fixed income markets are very large. As of 31 December, 2016 there were over $12 trillion of outstanding corporate debt from companies in developed markets. Yet, despite the size of this asset class, little research has explored the role of fundamental analysis in the context of credit markets.
Default risk, i.e., the risk that a debt issuer will not make […]
When it was reported that there had been no deaths from commercial passenger jet accidents in 2017, President Trump was quick to claim credit on Twitter: “Since taking office I have been very strict on Commercial Aviation. Good news – it was just reported that there were Zero deaths in 2017, the best and safest year on record!”
But the […]
Sometimes we ask ourselves: after the damages caused by the financial crisis, what has been done to limit the misbehaviour of those who run the banks? The answer is that a huge number of regulations has been introduced, but often they are bypassed. An example for all: the loophole in bankers’ bonus cap.
A loophole in the bonus cap
Let’s take […]