Crisis

Rethink monetary policy and its objectives, reform our accounting and prudential environment, review the return on equity standards, regulate the prices of certain assets...

The fall-out from the Lehman default in 2008 should remind everybody that a negative feedback mechanism into other parts of the financial system and the real economy can create a negative-sum game for all parties involved.

The credit default swap market is pricing in a 65% probability of a default within the next five years.

The statistical assumption of normal (log-normal) distribution of stock returns (prices) is not that strong and tail events’ occurrence is largely undervalued. Nevertheless, this modeling framework has been widely used for strong reasons.

According to Mandarine Gestion, current valuation levels in the banking sector constitute opportunities rarely seen over a medium-term horizon. However, over the short term, investors are preferring to focus on two factors while at the same time exaggerating in our view their consequences and therefore provoking excesses: sovereign debt and liquidity levels.