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Sunday, 22 October 2017

IFR Review of the Year 2016

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Foreword

It’s normally fair to say that bankers grumbling about the state of the markets deserve the same sympathy as farmers moaning about the weather. It goes with the territory. And it is up to them to simply get on with it.

And yet they had more than enough to whinge about in 2016.

The year was bookended by two crises. It began with panic in the bank capital market and a vicious sell-off in Additional Tier 1 bonds. The worries turned out (for the moment, at least) to be overdone.

And, as this Review of the Year goes to press, a crisis in Italian banking looms. Will those worries turn out to be overdone, too? We might not have to wait long to find out.

It is no coincidence that both squeaky bum moments centred on Europe’s still wounded banking system. Some eight years after the financial crisis, too little progress has been made in getting the continent’s financial system back on a sound footing.

Against that background, it is no surprise that IFR’s Bank of the Year award has gone to a US institution. Indeed, the gap between the power, profitability and stability of the banking systems on either side of the Atlantic should be a major concern for European regulators and politicians.

In between those moments of panic at the start and end of the year, there was no shortage of other dramas, including the (likely) self-harm of the Brexit and Trump votes and the (guaranteed) self-harm of buying negative-yielding bonds.

And yet it was still a year of extraordinary deals – all the more impressive given the turmoil. We highlight the best of the best here.

IFR sends its congratulations to all those clever people involved in constructing these transactions.

But before you all get too carried away, a word of caution may be wise: brilliant though many of the dealmakers honoured here are, it’s really got to help that the world’s central banks are handing out free money hand over fist and buying up large chunks of the markets.

To return to those farmers: the wise ones know that they grew a bumper crop because conditions – sun and rain at the right times – worked in their favour.

Similarly, sensible bankers know that for all the volatility of 2016, they’ve been acting with a strong wind behind their backs.

To see the digital version of this review, please click here.

To purchase printed copies or a PDF of this review, please email gloria.balbastro@tr.com

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