Today’s post previews a forthcoming article by this author that is due to be published in the Journal of Business Law . The article is available in its pre-published format here . The aim of the article is to assess the new development within the global credit rating arena, in that China has allowed Standard & Poor’s entry, as a stand-alone entity, into its marketplace for the very first time. The move to allow the largest global credit rating agency into the Chinese market , without having to be aligned to a domestic agency, is unprecedented. Considering that Moody’s has apparently set up a stand-alone entity and is in the process of applying for the licence to operate within China, the article discusses the environment that the agencies are entering, whether there is a need for them at all, and if so then why. The article starts by analysing the development of the credit markets in China, which naturally leads to the development of the internal credit rating market. Throug...

In today’s post we will preview an article by this author that is due to be published soon in the Journal of Money Laundering Control . The article is available in its pre-published format here . In this post we will review the underlying premise of the article, and present the target of the article which is a new venture in the anti-money laundering arena – Sigma Ratings . The article aims to introduce the new venture to the literature and examine its potential against the backdrop of the anti-money laundering (AML) arena, and also against the experiences of its model-sharing cousins, the credit rating agencies. For clarity, Sigma Ratings is essentially a mixture of the two worlds and seeks to bring the credit rating model into the AML arena, with the hope being that the agency will enable the world to ‘ transact with confidence ’. To achieve this aim, the article presents a number of different contexts. The first context presented is that of the AML world and some of the compe...

This post reviews a recent article in the Wall Street Journal , written by Cezary Podkul and Gunjan Banerji, entitled Inflated Bond Ratings Helped Spur the Financial Crisis. They’re Back . Regular readers will know that the credit rating agencies and their performances over the past two decades have been reviewed extensively and critically here in Financial Regulation Matters on account of the author’s specialism. However, whilst there has been repeated criticism of the agencies themselves, the regulators and their post-Crisis attempts to constrain the industry deserve more attention. The WSJ article suggests that post-Crisis regulatory endeavours have failed and this falls in line with a thesis of this author who has suggested that regulators are regulating imagined, or idealised entities rather than the agencies and the industry as it actually exists . Therefore, we will review the article and ask what its findings mean for post-Crisis regulation in the credit rating arena. T...

With the rise in sustainable and, to a point, ethical investing recently, there is now concerted pressure being placed upon the large tobacco companies from investors and policymakers. In today’s post we will look at this pressure and how it is building, and also in what direction the industry may move once the inevitable move from cigarettes and cigars takes place. There are suggestions that the traditional tobacco companies may move into vaping industries in a much more concerted way, but there are a number of potential issues awaiting them if they choose to do that. A British governmental report this year proudly stated that there is an ‘ ambition to go “smoke-free” in England by 2030 ’. This was accompanied by ‘an ultimatum for industry to make smoked tobacco obsolete by 2030, with smokers quitting or moving to reduced risk products like e-cigarettes’. This policy movement is being witnesses against a financial movement which is seeing the largest traditional tobacco compani...

In April 2017 we reviewed the story of Karen Millen , who had built her fashion brand into a 130-store chain before being declared bankrupt because of an unpaid tax bill . The brand, which was bought from Millen in 2004 by an Icelandic company before being transferred to Aurora Fashions in 2011, has been long regarded as a quality outlet on the British high street. However, with the seemingly-relentless demise of the traditional British high street, it appears there are about to be two more casualties. In 2018 Karen Millen, owned by Aurora – who are ultimately owned by the Icelandic Kaupthing Bank – acquired certain parts of Coast , a competing fashion retailer who were launched in 1996 and grew to have almost 20 stand-alone stores in the UK. As Coast were in administration, Karen Millen were able to acquire certain parts of the Coast’s concession and online portfolio, saving 600 jobs in the process. However, it was confirmed this week that Karen Millen and Coast have been put i...