NEWSLETTER of October 14, 2022

The following content has been added at finexpert:

Creditreform
WIRTSCHAFTSLAGE UND FINANZIERUNG IM MITTELSTAND, HERBST 2022
German SMEs are facing a tough winter. The energy crisis, war and inflation are having a significant impact on business sentiment. The latest analysis shows a sharp drop in the business climate index from plus 25.2 points last year to plus 3.1 points at present. >more

PwC
EMISSIONSMARKT DEUTSCHLAND: Q3 2022
In "Issuance Market Germany," PwC analyzes all new share issues and capital increases on the Frankfurt Stock Exchange on a quarterly basis. In addition, new issues of corporate bonds by German issuers are recorded. The data on capital increases are based on information from Thomson Reuters and include transactions up to and including September 30, 2022. >more

Mazars | DICE Consult
FUNKTIONSDEFIZITE AUF DEM WIRTSCHAFTSPRÜFUNGSMARKT
The Wirecard case has revealed deficits in a market whose participants bear a great deal of responsibility. Those who audit listed companies have an influence on the stability of the financial system. The problem is that the audit market is highly concentrated and regulated in the segment of public interest entities. What do market concentration and barriers to entry mean for competition? Can a market function like this at all? Or is this market failure? If so, how do we achieve market diversity, audit quality and financial market stability? >more

Bank for International Settlements
BIS QUARTERLY REVIEW: SEPTEMBER 2022
Market swings reflected investors' evolving perception of the outlook for inflation and monetary policy during the period under review, the Bank for International Settlements says in the September 2022 BIS Quarterly Review. News about inflation, and investors' views of the policy response, drove markets while the growth outlook deteriorated on fallout from the war in Ukraine and further weakness in China. From mid-June to end-July, equity and credit markets rallied on expectations that the path for policy rates would flatten after aggressive hikes. In August, risky asset markets reversed course and yields climbed amid a more forceful policy response to higher inflation. >more

CDP | Oliver Wyman
MISSING THE MARK: 2022 ANALYSIS OF GLOBAL CDP TEMPERATURE RATINGS
As we approach COP27, this report uses CDP’s latest temperature ratings to assess whether current corporate emissions reduction targets are ambitious enough to meet the Paris Agreement’s 1.5°Celsius goal. CDP temperature ratings compare our comprehensive dataset of publicly disclosed corporate emissions target disclosures, covering more than 4,000 companies globally, with science-based global warming trajectories. The report was prepared in partnership with Oliver Wyman. >more

THE POLITICAL POLARIZATION OF CORPORATE AMERICA
Elisabeth Kempf, Vyacheslav Fos, and Margarita Tsoutsoura
2022
Executive teams in U.S. firms are becoming increasingly partisan. We establish this new fact using political affiliations from voter registration records for top executives of S&P 1500 firms between 2008 and 2020. The new fact is explained by both an increasing share of Republican executives and increased assortative matching by executives on political affiliation. Departures of politically misaligned executives are value-destroying for shareholders, implying the increasing political polarization of corporate America may not be in the financial interest of shareholders. >more

RATING AGENCY FEES: PAY TO PLAY IN PUBLIC FINANCE?
Jess Cornaggia, Kimberly Cornaggia, and Ryan D. Israelsen
2022
We examine the relationship between credit rating levels and rating agency fees in a public finance market where rating agencies earn lower fees and face higher disclosure requirements relative to corporate bond and structured finance markets. Controlling for variation in the complexity of credit analysis at the issue level, we find evidence that rating agency conflicts of interest distort credit ratings in the municipal bond market. Our results also suggest a substitution effect between certification agents in the muni market. The relationship between credit ratings and rating agency fees is driven by issuers who lose access to AAA insurance. >more