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Behind blue eyes: Simon Taylor's blog. Behind blue eyes: Simon Taylor's blog.

sovereigns

Why markets ignore sovereign debt ratings for the US
2 Aug 2023

Why markets ignore sovereign debt ratings for the US

by Simon Taylor | posted in: Economics, Finance sector, Key finance concepts | 0

Debt rating agencies have no particular expertise or special information on sovereign debt, especially for developed economies, so their views don’t matter * News that Fitch downgraded the US sovereign debt rating from AAA (the highest rating) to AA+ (the … Continued

credit, debt, risk, sovereigns, USA
When should we forgive debts?
16 Aug 2015

When should we forgive debts?

by Simon Taylor | posted in: Course material, Finance sector, International affairs | 7

Debt is a contract but sometimes contracts must be broken, either in the mutual interests of the contracting parties or in the interests of justice. But it’s hard to come up with general rules for this. The long-running arguments about … Continued

contracts, debt, sovereigns
Greece repays IMF using the IMF’s own “currency”
13 May 2015

Greece repays IMF using the IMF’s own “currency”

by Simon Taylor | posted in: China, Course material, Finance sector, International affairs | 1

Greece this week repaid €750m to the International Monetary Fund (IMF) which it funded by drawing on its SDR account at the IMF. This legitimate but unusual move caught many commentators by surprise and drew attention to the little known … Continued

debt, IMF, SDR, sovereigns
Barriers to negotiating mutually beneficial outcomes: the example of Greece
17 Feb 2015

Barriers to negotiating mutually beneficial outcomes: the example of Greece

by Simon Taylor | posted in: Economics, International affairs | 0

The current stand off in talks to renegotiate the Greek debt bailout shows the difficulty of achieving an outcome that could be good for both sides. * Why lenders sometimes rationally forgive part of a loan There is plenty of … Continued

asymmetric information, debt, Greece, sovereigns
The accidental trillionaire
4 Dec 2014

The accidental trillionaire

by Simon Taylor | posted in: China, Economics, Finance sector, International affairs | 0

China’s $3.9 trillion foreign exchange reserves were not planned but arose as a side effect of a strategy, now ended, of keeping the RMB exchange rate lower than the market would have set it. * Last week I visited the … Continued

China, foreign reserves, SAFE, sovereigns
US government bonds no longer have to be fixed income
9 May 2014

US government bonds no longer have to be fixed income

by Simon Taylor | posted in: Course material, Financial products | 1

Bonds, which are debt securities, are often known as “fixed income” investments. This is mostly correct but not strictly accurate. A typical bond pays a fixed coupon, which is an amount of money normally paid twice a year, for a … Continued

bonds, interest rates, sovereigns
What has gone wrong with India?
30 Aug 2013

What has gone wrong with India?

by Simon Taylor | posted in: Course material, Finance sector, International affairs | 2

The fall in the Indian rupee in the last few weeks is a result of three things: i) a current account deficit that made the country vulnerable to a sudden exit of funds; ii) the inherent volatility and instability of … Continued

development, India, sovereigns
What is a sovereign wealth fund?
21 Mar 2013

What is a sovereign wealth fund?

by Simon Taylor | posted in: China, Course material, Finance sector | 7

A sovereign wealth fund (SWF) is an organisation that manages financial and other assets on behalf of a government or nation. But what about the holdings of foreign exchange reserves by central banks? These assets, often much larger in size, … Continued

asset management, foreign reserves, sovereigns
Is the US government hiding its true level of debt?
4 Oct 2012

Is the US government hiding its true level of debt?

by Simon Taylor | posted in: Course material, Economics, Finance sector | 1

Yesterday in class a question arose as to whether the Federal Reserve (the US central bank) is keeping US government interest rates down by buying government bonds in the market. By adding to the demand for bonds, relative to a … Continued

debt, sovereigns, US
Financial repression: China versus India
12 Sep 2012

Financial repression: China versus India

by Simon Taylor | posted in: China, Course material, Economics, Finance sector | 1

Financial repression is a term used by economists which means the government taking ordinary people’s savings to achieve some goal, typically to pay for the government itself, by exploiting imperfections in the financial system. It is an indirect form of … Continued

China, financial repression, India, sovereigns

About

Simon is a member of the finance faculty group at Cambridge Judge Business School. From 2008-18 he was the first Director of the University of Cambridge Master of Finance (MFin) degree, and he is now Director of the University's Global Executive MBA. An economist and former equities analyst at JPMorgan and Citigroup, he teaches on financial markets and institutions, infrastructure finance and the world financial system. He is a Fellow in Economics at St. Catharine's College, Cambridge. His book on nuclear power in the UK was published in March 2016.

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