Why International Banks Struggle to Innovate in a Strict Ratings Market. The last time credit ratings probably played a major role in your life—if in fact they ever did—was during the 2008 Financial Crisis. As the canonical story goes, crediting institutions packaged subprime loans, often at B or C level confidence, as reliable A level bonds so that banks could extend their lending power.
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BRB Columnists were invited to a World Financial Group (WFG) branch where they learned about “paying it forward,” the Exchange Principle, company-wide trips to Vegas, and everything it takes to make it rich by selling life insurance—all while our recruiter tried to sell us an insurance policy, hundreds of dollars of license fees, and the opportunity of a lifetime. Continue Reading

The inception and evolution of Hong Kong’s system of legal frameworks and institutions form the cornerstone of the city’s international and economic identity. Although they, along with the city’s economic system, have helped connect China economically to the rest of the world, the tensions and contradictions inherent in the post-handover system have been laid bare by recent socio-political turmoil and challenges to the rule of law. Hong Kong’s judiciary and legal sector are at a crucial crossroads – with not just the system itself, but with the semi-autonomous city’s economy, people, and future all at stake.Continue Reading

“Freedom from poverty is not free. The poor are willing and capable to pay the cost,” concluded a 1999 Reserve Bank of India taskforce on finance reforms. While that analysis might seem more at home in a Gilded Age drawing room than a modern boardroom, it reflects the core theory behind international economic development’s golden child: microfinance.Continue Reading

Over the past twenty years, there has been a tremendous increase in the utilizable and interpretable data available to companies. This has led to an arms race amongst investors to gain an informational edge. Business managers have started using collection software and data analysis techniques to look beyond the purely-financial data and gain deeper insights about their customers and business. While many investors are aware of using social media and web scraping to gauge customers’ views on businesses and their products, hedge funds and asset managers have also started using alternative data such as credit card receipts and geolocation because of its potential to achieving higher alpha. So what is alternative data and does it really provide investors with an advantage when making investing decisions?
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