NEWSLETTER of April 10, 2020

The following content has been added at finexpert:

Morgan Stanley / Oliver Wyman

STEERING THROUGH THE NEXT CYCLE

This year's edition of the Wholesale Banking Report, which we prepared in cooperation with Morgan Stanley, outlines three scenarios for the development of the COVID 19 pandemic and its economic impact. The scenarios range from a rapid recovery to a global recession and also examine the medium-term impact on the corporate and investment banking business. >more

PwC

BLOCKCHAIN SURVEY 2020

The financial industry considers block chain technology important, but does not invest. This is the result of the Blockchain Survey, which the auditing and consulting firm PricewaterhouseCoopers conducted for the third time among banks, insurance companies and asset managers. The results clearly show that all 302 respondents state that they have at least a basic understanding of blockchain, even if only 2 percent attribute a profound expertise to themselves. The mood among the managers surveyed is predominantly positive. A full 75 percent are convinced of the potential of the technology. >more

Deutsche Bank Research

EUROPEAN BANKS IN THE CORONA CRISIS

The banking industry in Europe is entering the corona recession with strong capital levels and ample liquidity, though still only moderate profitability. Revenues will come under substantial pressure this year, loan loss provisions will jump and net income will fall materially – many banks may well make losses. However, there is likewise massive support from the public sector, with governments propping up the real economy, central banks the financial markets and supervisors relaxing rules for banks. This should mitigate the hit. Nevertheless, the risks are profound and a prolonged shutdown could even trigger a renewed banking crisis. >more

I-Advise

STUDIE ZUR UNTERNEHMENSBEWERTUNG BEI GESELLSCHAFTSRECHTLICHEN BEWERTUNGSANLÄSSEN

The sixth edition of the study on the valuation of companies for valuation purposes under company law has been extended to include expert opinions with a valuation date in 2019 and shows the development of valuation practice in squeeze-outs, control and profit transfer agreements, mergers and changes in legal form in the years since 2010. Although the absolute number of cases has increased again compared to the previous year, it should be noted that the majority of cases involved relatively smaller companies. Only two of the companies evaluated were listed on the stock exchange. In two thirds of the cases in 2019, the squeeze-out was preceded by a delisting. >more

CEO INCENTIVE CONTRACTS AND THE GENDER DIVERSE BOARDROOM

Vikram K. Nanda, Andrew K. Prevost, and Arun Upadhyay
2020
Do preferences of gender-diverse US boards manifest in their corporate policies? Since boards use executive compensation to affect firm policies, we focus on the relation between gender diversity and CEO incentive-pay. Consistent with goals of moderating risk and boosting long-term survival, gender-diverse boards offer pay packages with higher debt-like components. These effects are stronger when women directors serve on compensation committees and/or have non-corporate backgrounds. Compensation spillovers occur as gender-diverse boards choose peers with similar characteristics. IV-tests and exogenous director departures indicate effects are plausibly exogenous. Bond and stock prices increase around female director appointment announcements, especially for high-yield issuers. >more

THE CONTAGION EFFECTS OF THE COVID-19 PANDEMIC: EVIDENCE FROM GOLD AND CRYPTOCURRENCIES

Shaen Corbet, Charles James Larkin, and Brian M. Lucey
2020
At the beginning of the 2020 global COVID-2019 pandemic, Chinese financial markets acted as the epicentre of both physical and financial contagion. Our results indicate that a number of characteristics expected during a "flight to safety" were present during the period analysed. The volatility relationship between the main Chinese stock markets and Bitcoin evolved significantly during this period of enormous financial stress. We provide a number of observations as to why this situation occurred. Such dynamic correlations during periods of stress present further evidence to cautiously support the validity of the development of this new financial product within mainstream portfolio design through the diversification benefits provided. >more