"hybrids could offer a helpful solution to accelerate the exit of government support schemes and support smaller corporates struggling to access capital markets,” (/)
(h/t @jeuasommenulle )
(h/t @jeuasommenulle )
https://twitter.com/weberalexander/status/1351431638073401344
Yet, as the article hints at, the problem is not the guise the money goes into the companies: it's how and where the money comes FROM, or rather, who decides that(/)
We have had a decade of relentless regulatory push towards a more intermediated market, where the playing field for savers and "institutional investor" (i.e., the companies and banks acting as gatekeepers between savers and investments) has been progressively skewed.(/)
High minimum denominations, "reserved to institutional" corporate issuance, MIFID, Execution policies, have ensured that savers have less and less control and yet retain all the risk.(/)
moreover, the wealthy have materially different options, and big companies have material better funding opportunities. Also, regulatory costs for accessing markets the first time are a huge barrier to entry.(/)
That is immaterial in so far that in an "institutional led" world, new entrants have very little chance: they are small, illiquid, etc. (/)
Hybrids have another BIG defect: the financial system is bank-based, and it's hinged on a rigid limitation on retail bank hybrids. Sure, the money is ultimately retail, but they must not be allowed to hold them directly and have an hand in pricing them through supply/demand.(/)
So, I really can't see a world where the #EU would allow competition to banks to enter again through a window after having spent so much time and effort to kick it out of the door. @bondstrategist @nglinsman @RudyHavenstein @amlivemon @DiMartinoBooth @pietercleppe
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