Thien-Loc Nguyen

BNP Paribas is cutting off #Oil & #Gas financing to please non profit "green" organizations that are not even significant shareholders. It is not very reassuring to see that BNP get its strategy dictated by NGO ! Lets keep in mind that similar well intentioned NGO shutdown the German #Nuclear industry (and nearly killed the French) to push "Green" Russian Gas. For consumer this is bad news as consumer price will increase. But investors can take solace that small and medium sized energy companies are paying very attractive spread to get financing. https://lnkd.in/eeEPe6Jz

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YEN : SAME OLD STORY ? Short positions back to levels seen before recent MOF moves! Yen speculators ramped up bets on declines for the currency as of last Week, CFTC data show… The overall net short is back within a whisker of the near-record level reached April 23… Leveraged funds have gone in even harder, increasing their shorts to a record… The message seems to be clear ; No one sees a sustained yen rebound until and unless the BOJ/MOF act decisively… Or the Fed puts rate cuts on the table… #japan #jpy #forex #fx #currencies #boj #mof #fed #rates #markets #trading #finance #economy

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In the latest Markets Weekly podcast, my colleague Julien Lafargue provides some fascinating insights on the French and UK elections and the possible implications for investors. He also covers the US labour market, the outlook for the manufacturing sector and the upcoming corporate earnings season. Listen here: https://lnkd.in/eCpEttcg #BarclaysPrivateBank #BarclaysMarketsWeekly #Podcast #Investors

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As we all know, banks have an inherently asymmetric risk profile because of the liquidity mismatch between assets and liabilities: limited upside and unlimited downside in case of a bank run, as it recently materialized in the case of Credit Suisse or Silicon Valley Bank. The impact of such asymmetric risk is obviously exacerbated by consolidating the banking sector thereby concentrating the risk. As in many cases, it is not the probability of an adverse event, such as a bank run, but the magnitude of the impact that determines the risk. And here comes Macron proposing the consolidation of the European banking sector, reducing the number of banks, increasing the size of the remaining banks, too big to fail and too big to manage. What can possibly go wrong? 

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Profit and loss attribution (PLA) is a critical component of FRTB’s internal models approach (IMA), ensuring alignment between Front Office (FO) and Risk models. The consequences of a PLA test failure can be severe, with desks forced to use the more punitive standardised approach (SA), resulting in a considerable increase in capital charges. The introduction of the PLA test has sparked controversy as it appears to disincentivise the use of hedging. Well-hedged portfolios, which reduce risk and variability in a portfolio's P&L, often find it more challenging to pass the PLA test compared to riskier, unhedged portfolios.   In this article, we dig deeper into the issues surrounding hedging with the PLA test and provide solutions to help improve the chances of passing the test. 

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