May Macro Risk Report

Counterparty macro risk

Every month JCAP look at the issues that may affect depositor risk in the UK, US and Europe and publish a risk report.

For May 2019, we have focused on:

  • Barclay’s Q1 profits fall in ‘tough market conditions’
  • Metro considers selling troubled loans as depositors withdraw deposits
  • HSBC pledges to cut costs after Q1 profit beats expectations
  • ABN Amro announces the sale of Channel Islands operation
  • BOE keeps rates on hold but Carney warns markets not to underestimate potential interest rate increases as BOE increases growth estimates


For a copy of our latest report contact 

Moody’s puts HSBC and Barclays ratings on review for downgrade

Moody’s Investors Service, (Moody’s) placed the long-term ratings, the baseline credit assessment (BCA) and the long-term counterparty risk assessment (CRA) of HSBC Bank plc (HSBC Bank) on review for downgrade. The review for downgrade reflects Moody’s view of the likely impact on the bank of the UK’s so-called ring-fencing legislation.

Barclays Bank PLC’s baa2 standalone credit assessment, long- and short-term debt and deposit ratings also placed on review for downgrade

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Moody’s updates methodology and re-rates several banks

London, 27 September 2017 — Moody’s Investors Service,

Moody’s has set out its approach to incorporating future changes in a bank’s balance sheet within its advanced loss given failure (LGF) analysis. These methodological changes will better enable Moody’s to anticipate changes to the credit risk of banks’ debt and deposits given.


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Confidence Crisis in European Banks


Since the start of 2016, shares in European banks have been affected by a crisis of confidence which in the last month has seen lower share prices and higher Credit Default Swap prices. But have the recent movements affected risk for depositors?



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SOUTH Africa’s private sector is in a state of extreme distress

SOUTH Africa’South Africa Market conditionss private sector is in a state of extreme distress amid poor market conditions and a lack of demand. February 3rd 2016


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JCAP Treasury Services appoints two new Treasury Analysts

We are delighted to welcome Paul Smith and Sam Elliott to JCAP, we welcome their enthusiasm and ambition and look forward to utilising their specialist skills to augment our services to our clients

Paul Smith and Sam Elliott, JCAP Treasury Services

Sam 22, who studied at Victoria College, started his career at Canaccord Genuity Wealth Management where he spent 3 years on the treasury desk as a trainee treasury dealer. He gained experience working initially as an FX trader successfully passed his ACI dealing certificate, and then in the Investment Management department before making the move to JCAP.

Paul 28, obtained a First Class Honours degree in Mathematics from the University of Strathclyde in 2010 and went on to study for his doctorate. As a doctoral candidate Paul worked within the numerical analysis group focusing on the mathematical modelling of geotechnical problems. Prior to relocating to Jersey, Paul worked with HSBC Security Services in Edinburgh and since joining JCAP has relished working in an environment where he can use his problem solving and analytical skills.

JCAP market overview of interest rates March/April 2015

boe_rates_1668342cThe minutes from the Bank of England’s most recent policy meeting released on the 22nd of April showed that the Monetary Policy Committee voted unanimously to keep rates on hold and its quantitative-easing program unchanged.

The minutes showed all nine members were in favour of leaving the key interest rate at 0.5% and making no changes to the £375 billion asset-purchase program.

According to the minutes, two members saw the decision as “finely balanced”, while all members agreed that the next rate move is likely be an increase…………

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Standard and Poor’s puts systemically important banks on ratings credit watch following review of government support

LONDON (Standard & Poor’s) Feb. 3, 2015-Standard & Poor’s Ratings Services announced that it has taken various rating actions on certain U.K., German, Austrian, and Swiss banks following a review of government support.


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Which banks have exposure to the Russia crisis?

Major banks across Europe, as well as the UK, US, and Japan, are at risk should the Russian economy default, according to a study by Capital Economics published on 17th December 2014 (Russia Today, 2014).


Many Russian companies borrow money from European and American banks, but now the value of their domestic currency has decreased by more than 50 percent against the dollar, so the cost of the loans has doubled in rouble terms.

However, according to Macro Advisory in Moscow the Russian Central Bank, flush with foreign cash reserves, can help these companies out. It believes that the Russian economy is nowhere near default as the Central Bank has more than $400 billion in foreign currency reserves, unlike the last time when they defaulted in 1998, when they only had $16 billion……..

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JCAP market overview of interest rates 2014


Having initially formed its forward guidance on interest rates around unemployment, the Bank of England switched tack when the fall in unemployment happened far faster than expected.

Forward guidance mark 2 arrived in February this year when the BOE turned its focus on to the concept of slack in the economy as one of the deciding factors on when rates would start to rise. It identified that there was spare capacity in the economy, thus indicating that the economy could grow at a faster rate without requiring an increase in rates.

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