In both the United States and Europe, debt levels are climbing due to the peaking of private-equity activity. Low rates have encouraged leveraged transactions, for which the level of debt has increased with the rise in prices that investors are ready to pay.
American Apollo Global Management LLC, the world’s second-largest fund manager, broke the record for the largest fund in the history of private equity in July: it raised the largest ever private equity fund since 2007’s financial crisis, with $24.6 billion. Apollo plans to invest in North America and Western Europe.
According to the recently published report from the Organisation for Economic Co-operation and Development (OECD) titled “OECD Business and Finance Outlook 2017”, equity initial public offerings (IPOs) have fallen off since the financial crisis as fees taken from the companies by investment banks have increased.
The European Markets in Financial Instruments Directive (MiFID II) will enter into force in January 2018. Presented as a single regulatory framework for European financial institutions after a period marked by conflicts of interest, it intends to strengthen investor protection, transparency, product standardization and stability of financial markets.
In February, a delegation from the financial centres of Paris and the Paris region took a trip to London to meet with leaders of international financial companies based in the United Kingdom to discuss post-Brexit.
One key advantage of developed economies lies in voting power and representation. They have either a right of veto or the possibility of a minority blockage within the Bretton Woods Agreement institutions—the International Monetary Fund and the World Bank.
The Barack Obama Administration in the United States passed the Dodd-Frank legislation in 2010. It was supposed to be the foundation for the regulation of finance, put in place in the aftermath of the 2008 financial crisis to rectify the excesses of markets and financial institutions.
The US Department of Justice wants Deutsche Bank to pay $14 billion to settle various probes relating to poorly underwritten mortgage securities sold by the bank during the financial crisis.